Upstream access is usually through competitive bidding rounds for onshore or offshore blocks, leading to a production sharing contract with the government and Petrobangla. Companies may also join existing contracts through farm-ins, acquire interests from current holders with the necessary consents, or provide services to Petrobangla or its subsidiaries. Eligibility, financial capability, technical experience and bid requirements are set out in the tender documents for each round. We review the documents, advise on consortium structures and help bidders understand which terms are negotiable before committing to a bid in the Bangladesh energy sector. Early review exposes unusual terms.

A production sharing contract typically sets out the exploration period and minimum work programme, the contractor's obligation to fund operations, how costs are recovered from production, how remaining profit petroleum is shared, gas pricing and marketing, Petrobangla's rights to participate or purchase, relinquishment of acreage, decommissioning, fiscal terms, local content and employment, stabilisation, termination and dispute resolution, often through international arbitration. Model contracts are revised from time to time to attract investment. We help companies understand the commercial impact of each provision and negotiate clarifications where the tender permits, focusing on the long life of energy investments.

Policy is set by the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources. Petrobangla and its subsidiaries are central to exploration, production, transmission and distribution of gas, and the Bangladesh Petroleum Corporation handles much of the petroleum products sector. BERC issues licences for many energy activities and is involved in tariff determination. The Department of Explosives licenses storage and handling of petroleum and LPG, and the Department of Environment grants environmental clearance. Other agencies, including Invest Bangladesh, may be relevant depending on the project. We help clients identify which approvals sit where.

An LNG terminal, pipeline or storage project usually needs a mix of approvals, including agreements with Petrobangla or its subsidiaries, licensing by BERC where the activity requires it, environmental clearance from the Department of Environment, explosives and safety licences, land or seabed rights, port and maritime permissions, and foreign investment registration and incentives through Invest Bangladesh. The list depends on the asset, location and procurement route. We prepare an approval map early, because these approvals often depend on each other and on the timetable of the wider energy project. Applying out of order can stall projects.

Gas prices for end-user categories are set or approved through regulatory processes involving BERC and the government, and they have changed significantly in recent years as imported LNG has become a larger part of supply. Prices paid to upstream producers are set by their production sharing contracts, while LNG prices follow the formulas in supply contracts. These different price levels create financial pressures across the gas chain, which can affect payment performance by state-owned buyers. We help energy investors understand pricing mechanisms and negotiate payment security provisions that reflect this risk. Price review clauses deserve close attention in long-term contracts.

Foreign investment in downstream businesses such as LPG import, storage and distribution is possible, subject to licensing requirements, safety rules and current investment policy. Investors usually establish a Bangladeshi company, register the investment with Invest Bangladesh and obtain licences from BERC and the Department of Explosives, along with environmental, fire and local authority approvals for facilities. Some petroleum product segments remain dominated by state-owned entities. We advise on the structure, approvals and contracts needed to operate, and on how to manage regulatory inspections and compliance in this part of the energy market. Keep licence and safety records inspection-ready.

Production sharing contracts and many international supply and service contracts provide for international arbitration, often under major institutional rules or UNCITRAL Rules with a neutral seat, sometimes with expert determination for technical or accounting issues. Domestic contracts may provide for arbitration in Bangladesh under the Arbitration Act 2001 or for court proceedings, where the Commercial Courts Act 2026 may apply. Bangladesh is a party to the New York Convention, so foreign awards can generally be enforced. Disputes with state entities raise additional questions about approvals, immunity and enforcement against assets, which we assess at an early stage.

Tax issues include the fiscal regime in the production sharing contract, corporate income tax, withholding tax on payments to contractors and non-residents, VAT and customs on imported equipment and services, and treaty relief where available. The Finance Act 2026 reduced withholding on interest paid to non-residents from 20% to 10%, which affects financing costs. Tax provisions in energy contracts and their interaction with general tax law can be complex, so we work with tax advisers to review structures, gross-up clauses and payment flows before transactions are signed and to support clients in later reviews or disputes.