All licences in Bangladesh are governed by production sharing contracts (PSCs) of several vintages. We base our analysis on the most recent 2012 Model PSC terms. Contracts are awarded through licensing rounds and direct negotiations. National oil company, Petrobangla, does not have mandatory interests in the blocks. Cost recovery ceilings ranging from 55% to 70% and production bonuses up to US$6 million are set in the PSC. Various fees, corporate income tax of 25% for companies listed on Bangladesh exchange and 35% for non-listed companies are also payable. Bonuses, profit splits based on production rates (indicatively from 20% to 55% for the contractor) and domestic supply obligation (up to 80% of contractor's profit oil) are negotiable. For deepwater areas a higher cost recovery ceiling is applicable, and Petrobangla pays income tax on behalf of the contractor.