The government had earlier been preparing itself to sign an offshore joint venture exploration deal between Thai government oil and gas agency PTTEP and Petrobangla on the basis of an unsolicited negotiation.

But due to political and other reasons, including that the deal would violate the country's energy policy, the government finally decided to sign a cooperation MoU.

Thailand had proposed that the PTTEP be awarded contracts for offshore blocks 18-A, 19-A and 19-B where it will give Petrobangla 30 percent stake without any investment till any discovery is made. After discovery of oil or gas, Petrobangla will have to invest for development of the oil or gas field. The PTTEP is open to increasing Petrobangla's stake and will pay it a signature bonus.

A team of PTTEP executives made this proposal during their visit on August 20-22. It was then said the Thai energy minister will visit Dhaka next month (September) and participate in the signing of the MoU on the proposal. But soon after reviewing the proposal, Petrobangla forwarded it to the energy ministry asking it to sign a MoU.

"Firstly, this is an unsolicited proposal. This is not unattractive. But if we float an open tender, there is a chance that we might get better offers from other international companies, private or national oil agencies," noted an official.

"Secondly, the energy ministry last month finalised the new map of off-shore blocks that will be open for the third round block bidding for oil and gas exploration. So, we cannot give away some of these blocks to PTTEP without any competition or before we conclude this international block bidding," he added.

Besides, the political governments of both Thailand and Bangladesh are now at the end of their tenure. Both the countries are preparing for elections. "Therefore, it is not a good time for striking an investment deal," he pointed out.

The MoU to be signed between the two countries will focus on broad-based cooperation. Sources however said the draft of the MoU has not yet been finalised.

Thailand had been holding dialogues on energy sector cooperation from March last year. A high-level team of PTTEP officials had met the energy minister, Petrobangla and Bapex chiefs and later sent a proposal for Thai scholarship on reservoir engineering and geo-science studies, visit of Bangladeshi oil and gas executives to Thai oil and gas facilities and review of off-shore geological and seismic data of Bangladesh from Bangladesh Data Centre.

As a follow up, Bangladesh sent two officials from Bapex and Bangladesh Gas Field Company Ltd to Thailand under the scholarship programme late last year. In March this year, high officials of the energy ministry Petrobangla and Bapex visited Thai oil and gas facilities.

The PTTEP team on its August 20-22 visit was supposed to be accompanied by the Thai energy minister. But the minister cancelled his visit as he was busy in electioneering and decided to come to Dhaka this month.

Earlier, the Thai prime minister and foreign minister during their visits to Bangladesh had emphasised energy sector cooperation between the two countries.