The main route upstream is a production sharing contract with the government and Petrobangla, typically awarded through a bidding round or, in some cases, direct negotiation where the law and policy allow. International companies may also participate by farming into existing contracts, providing drilling and technical services, supplying equipment, or building and operating midstream and downstream facilities under contract with state entities. Each route requires a Bangladesh presence of some kind, approvals and careful tax and foreign exchange planning. We explain the available routes, approvals and practical risks for the particular project and investor. We also explain likely approval timelines.

Important terms include the exploration period and minimum work programme, cost recovery limits and the definition of recoverable costs, profit gas and oil sharing, the gas price and its adjustment mechanism, domestic supply and marketing rights, the right to export where relevant, fiscal provisions, relinquishment, decommissioning obligations, assignment and change of control, force majeure, stabilisation and dispute resolution. Many of these follow a model contract, but there is often room to clarify definitions and procedures. We review the model and proposed amendments, and advise on how disputes over each term are usually argued. Clear definitions reduce later arguments.

Commentators have pointed to several factors, including limited seismic data for deepwater areas, gas pricing terms, fiscal conditions, global capital allocation by oil companies, payment concerns and policy uncertainty. Model contracts have been revised to address some of these issues. For an investor, the practical question is whether a particular block's terms, data and risk profile justify investment, and what protections can be negotiated. We review bid documents and model contract terms, explain how Bangladesh law affects key protections, and help prepare clarification requests and bid submissions for offshore and onshore gas projects. We flag points to raise early.

Payment delays have been a concern in the energy sector, particularly when foreign exchange was scarce and when state budgets were under pressure. Contractors can reduce risk through clear payment milestones, interest on late payment, advance payment and retention guarantees on fair terms, suspension rights, letters of credit where obtainable, and well-drafted dispute clauses. Checking the state counterparty's budget approval and authority to sign is also important. If invoices remain unpaid, we advise on formal notices, negotiation, claims and enforcement, choosing a route that protects both the claim and the long-term relationship with the state client.

Typical approvals include project approval within the state sector where public funds or state entities are involved, land acquisition or right-of-way arrangements, environmental clearance from the Department of Environment, safety and explosives-related licences, approvals for river or road crossings, and connection agreements with transmission and distribution companies. Tariff matters may involve the Bangladesh Energy Regulatory Commission. Projects financed by development finance institutions also need to meet their environmental and social standards. We prepare an approvals map for the specific route and facility, and coordinate the legal work alongside technical consultants. Early planning prevents costly delays to gas projects.

The Bangladesh Energy Regulatory Commission determines gas tariffs and certain energy prices following its procedures, including public hearings, and issues licences for specified activities in the energy sector. Its decisions affect the revenue of distribution companies and the cost of gas for power and industry, and so indirectly affect the economics of upstream and midstream projects. Government subsidy decisions and policy directions also play a role. We advise clients on participating in hearings, preparing submissions, understanding tariff orders and, where justified, challenging decisions through the available legal routes, including judicial review. Tariff risk should be reflected in project models.

The repeal of the special provisions law in late 2024 did not automatically cancel contracts signed under it, but it removed the legal shield that limited challenges to them and was followed by reviews of earlier awards. Contractors and investors with existing contracts should check how their contract was procured, whether any review has been initiated, and what protections the contract and Bangladesh law give if the state seeks renegotiation or termination. We review contract histories, advise on likely risks and negotiate amendments, while keeping arbitration and treaty options in view where appropriate. Timing matters, so act early.

International production sharing contracts and major service contracts typically provide for negotiation, expert determination for technical issues, and arbitration under international rules with a seat outside Bangladesh. Local contracts may refer disputes to arbitration under the Arbitration Act 2001 or to the courts. Bangladesh is a party to the New York Convention, so foreign awards can be enforced through the Bangladesh courts, though the process can take time. Investment treaties may offer additional protection to foreign investors. We plan dispute strategy early, preserve evidence and notices, and coordinate arbitration and enforcement. Early notices often preserve important rights.