25-Year energy economy: Bay of Bengal holds major potential
Bangladesh’s rising demand for energy in power generation, industries and transport has increased its dependence on imported LNG, fuel oil and coal. Higher global prices are putting additional pressure on government spending, subsidies and foreign exchange reserves.
Experts say the country cannot ensure long-term energy security through imports alone and must explore the potential of the Bay of Bengal.
The government has opened bidding for oil and gas exploration in 26 offshore blocks, including 11 shallow-water and 15 deep-water blocks, under the new Offshore Model Production Sharing Contract (PSC) 2026. The new terms aim to attract international investment by making exploration more competitive.
Finance Minister Amir Khosru Mahmud Chowdhury has described energy security as a government priority. He said Bangladesh cannot continue relying on expensive imported energy for a long period and needs greater domestic oil and gas exploration, diversified import sources and a long-term energy security plan.
Electricity and Energy Minister Iqbal Hasan Mahmud Tuku said Bangladesh has suffered from becoming import-dependent instead of exploring domestic energy resources. “If we can extract oil and gas from the sea, it will play an important role in the country’s energy security,” he said, stressing the need to increase exploration both onshore and offshore.
The need is highlighted by rising LNG costs. In March, amid conflict in the Middle East, the cost of one LNG cargo reportedly rose from around Tk436 crore to Tk908 crore.
Sakif Shamim, chairman of the Centre for Strategic and Economic Research (CSER) and managing director of Labaid Hospital Group, said the Bay of Bengal should be viewed as part of a broader Blue Economy, rather than simply a source of gas.
“The sea is not only about fish, ports or tourism. Marine energy, renewable power, shipping, tourism and technology together can create a large economic zone,” he said.
Shamim also stressed the potential of solar and wind power, saying Bangladesh needs policy stability, financing, infrastructure and stronger public-private coordination to develop renewable energy.
He said a major offshore gas discovery could significantly change Bangladesh’s economic outlook.
“If we find gas, the economic equation will change,” Shamim said, adding that increased domestic gas supply would reduce LNG imports, improve industrial gas availability and lower production costs for fertilizer, power, ceramics, textiles and steel industries.
He said lower dollar-denominated energy imports would also ease pressure on foreign exchange. “A major gas field can simultaneously affect energy security, industrial competitiveness, foreign exchange savings, investment and employment,” he said.
Shamim cautioned that Bangladesh should not view the Bay of Bengal only as a gas source over the next 25 years. “We must also assess the potential of offshore wind power,” he said.
Mohammad Saiful Islam, chairman of Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX), stressed the need for greater domestic exploration. He said new wells and gas-field development could reduce dependence on imports, adding that increasing domestic gas supply is one of the main ways to ensure energy security.
According to Shamim’s analysis, Bangladesh spent about $3.88 billion on 109 LNG cargoes in 2025, compared with around $3.02 billion in 2024. He said growing industrialisation will further increase electricity demand, making domestic exploration, renewable energy, energy efficiency, storage, transmission infrastructure and regional cooperation essential.
The country’s offshore resources remain largely unexplored. The Offshore Bidding Round 2026 is therefore considered an important opportunity, but the real success will depend on how quickly exploration begins, how many wells are drilled, the technology used and how quickly discovered resources can be brought into economic use.
Shamim proposed a long-term National Offshore Energy Strategy, including modern 2D and 3D seismic surveys, geological modelling, exploratory drilling, competitive PSC terms, faster approvals, development of a domestic offshore service industry and pilot projects for offshore renewable energy.
He also called for greater private investment and public-private partnerships, saying the scale of investment required over the next 25 years cannot be met solely through government financing.
“The goal should not be to privatise the energy sector, but to make the private sector a partner in development and investment while retaining the state’s policy-making and regulatory role,” Shamim said.
He further warned that offshore gas could bring risks if Bangladesh becomes excessively dependent on natural resources. He suggested a transparent offshore revenue management framework, with part of the revenue invested in energy infrastructure, human resources and technology and another portion preserved for future generations through a sovereign or national resource fund.
Looking ahead to 2051, Shamim envisions a Bangladesh where offshore gas exists alongside solar and wind power, energy storage, an advanced grid, greater industrial efficiency and stronger regional energy cooperation.
The Bay of Bengal, he said, could become a major productive part of the national economy. “Our goal should be to create economic value from gas, not simply sell gas,” he said.
Ultimately, Bangladesh’s challenge will not simply be discovering resources beneath the sea, but turning them into greater industrial production, exports, employment and foreign exchange earnings. The success of the 2026 offshore bidding round could therefore become a major test of the country’s energy strategy for the next 25 years.