Bangladesh is taking steps to strengthen domestic energy security by reviving the state-owned Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) and expanding gas exploration activities aimed at reducing the country’s reliance on imported fuel.
Speaking at a post-budget press conference in Dhaka, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood said the government is prioritising domestic resource development after years of increasing dependence on imported energy.
“The energy sector became heavily import-dependent over the past 17 years despite significant untapped exploration opportunities both onshore and offshore,” the minister said.
As part of the government’s strategy, BAPEX will be strengthened through enhanced operational capacity and new investments in exploration infrastructure. Mahmood noted that the company has a proven track record in gas discovery but had remained underutilised in recent years.
To support expanded exploration efforts, the government plans to procure five additional drilling rigs, enabling BAPEX to increase onshore drilling activities and accelerate the search for new gas reserves.
While domestic exploration remains a priority, Bangladesh is also moving forward with offshore exploration initiatives through partnerships with international oil companies (IOCs). The minister explained that offshore exploration requires specialised expertise and technology that BAPEX currently lacks.
“We have invited international oil companies to participate in offshore exploration activities. The bidding process has already been initiated, and negotiations with successful bidders will begin once the evaluation process is completed,” he said.
Mahmood acknowledged that Bangladesh will continue to rely on imported fuel in the near term while domestic exploration projects progress. He noted that the government has already spent approximately $2.5 billion on fuel imports to ensure uninterrupted energy supplies.
Referring to recent global energy market disruptions linked to tensions around the Strait of Hormuz, the minister said Bangladesh successfully maintained fuel supply stability despite some suppliers invoking force majeure clauses.
On the power sector, Mahmood highlighted ongoing financial challenges resulting from subsidy obligations and inherited liabilities. He stated that the government currently purchases electricity from private power producers at higher rates and sells it to consumers at subsidised prices, creating a substantial fiscal burden.
The minister also revealed that the government inherited approximately Tk56,000 crore in unpaid liabilities within the power sector, adding pressure on public finances.
Addressing concerns over capacity payments to independent power producers (IPPs), Mahmood said the issue remains legally complex due to contractual commitments. The government has sought legal opinions regarding possible future actions while balancing investor confidence and energy security requirements.
The renewed focus on BAPEX and domestic gas exploration reflects Bangladesh’s broader effort to strengthen energy resilience, diversify supply sources, and reduce vulnerability to international energy market volatility.
