Authored By: Marufa Akter Simran
East West University
In 2012, Bangladesh won a maritime boundary dispute against Myanmar before the International Tribunal for the Law of the Sea (ITLOS).[1] Two years later, Bangladesh won a similar case against India.[2] Together, these two judgments gave Bangladesh sovereign rights over about 118,813 square kilometres of the Bay of Bengal, an area larger than the country’s own land territory.[3] More than ten years later, however, Bangladesh has still not produced any commercial gas from these waters. In 2025, the country’s most recent offshore tender attracted no foreign bidders at all.[4] This article argues that the ITLOS judgment in Bangladesh v Myanmar was a complete legal success, but this legal success has not turned into real economic benefit for Bangladesh. The problem is not the law itself. The problem is what Bangladesh did, and did not do, after winning the case. This article first explains why the judgment was a strong legal win. It then explains why this win has not produced economic gain. Finally, it considers the regional risk created by this delay and offers a short recommendation.
The Legal Victory
Bangladesh and Myanmar had disputed their maritime boundary in the Bay of Bengal since Bangladesh’s independence in 1971.[5] The dispute became urgent in October 2008, when a company acting under licence from Myanmar began survey work for gas in an area also claimed by Bangladesh.[6] Bangladesh responded by sending naval vessels to the area, and the two countries faced a tense stand-off for about a week.[7] After this incident, Bangladesh brought the dispute to ITLOS under Article 287 of the United Nations Convention on the Law of the Sea (UNCLOS).[8] This was the first time ITLOS had ever decided a maritime boundary case.[9]
The Tribunal had to draw three separate boundaries: the territorial sea, the exclusive economic zone (EEZ) together with the continental shelf up to 200 nautical miles, and the continental shelf beyond 200 nautical miles.[10] On the territorial sea, Myanmar argued that St Martin’s Island, a Bangladeshi island close to Myanmar’s coast, should not affect the boundary line at all.[11] The Tribunal disagreed. Because the island lies within Bangladesh’s own 12 nautical mile limit, the Tribunal gave it full effect when drawing the line.[12] This was an important outcome for Bangladesh, since the island sits in a strategically useful position.
For the EEZ and continental shelf, the Tribunal followed the usual three-step method: it drew a provisional equidistance line, then asked whether there was any reason to adjust that line, and then checked that the final result was not disproportionate to the length of each country’s coast.[13] The Tribunal found that Bangladesh’s coastline is unusually concave, so a strict equidistance line would have been unfair to Bangladesh. It therefore adjusted the boundary in Bangladesh’s favour.[14]
The most important part of the judgment, arguably, concerned the continental shelf beyond 200 nautical miles. Normally, only the UN Commission on the Limits of the Continental Shelf (CLCS) defines the outer edge of this area. ITLOS held that it could still delimit the direction of the boundary even though the CLCS had not yet completed its own recommendations.[15] This meant Bangladesh did not need to wait for the CLCS process before obtaining a clear and binding boundary with Myanmar. The judgment was also almost unanimous, with only one dissenting opinion out of twenty-two members of the Tribunal.[16]
Why the Victory Has Not Produced Economic Benefits
The Bay of Bengal is believed to hold large reserves of natural gas beneath its seabed.[17] After the ITLOS judgment, and after the 2014 arbitration with India, Bangladesh gained undisputed legal rights to explore and use this gas out to 200 nautical miles and beyond.[18] Soon after the Myanmar judgment, the government re-delineated its offshore blocks and invited international companies to bid for nine shallow-water blocks and three deep-water blocks under a new production sharing contract framework.[19] This looked like the beginning of real progress.
However, the bidding process did not go well. Contemporary reporting at the time already described the response to this tender as poor.[20] More than a decade later, the pattern has not changed. A recent account of Bangladesh’s offshore sector describes how the country signed only a few shallow-water production sharing contracts and completed a new seismic survey in 2023, but these were only preparatory steps.[21] No commercial production has actually started.[22] For years, the government chose to import liquefied natural gas instead of investing seriously in its own offshore exploration, a choice that made some economic sense while global gas prices were low, but that created a long-term dependency on imports.[23]
Part of the problem is technical capacity. Bangladesh’s state agency, BAPEX, has no experience drilling in deep water, unlike the state companies of some neighbouring countries.[24] In the most recent 2025 tender round, seven foreign companies initially purchased the bidding documents, and the government even extended the deadline by three months to attract more interest, but in the end no company submitted an actual bid.[25] Around the same time, India’s ONGC, which had been drilling in Bangladeshi waters, informed the state corporation Petrobangla that it would not seek any further extension of its contract, and it began winding up its operations, marking a full suspension of offshore exploration activity in Bangladesh.[26] This happened even though the most recent draft production sharing contract had offered more attractive terms than before, including gas prices linked to global crude oil prices and a revenue-sharing model instead of the older profit-sharing arrangement.[27] According to one geologist quoted in this reporting, multinational companies invest globally, and once they saw that Bangladesh was slow to act, several of them simply moved their attention to other countries.[28]
This history shows that the ITLOS judgment gave Bangladesh a clear legal opportunity, but legal certainty alone was not enough. Weak institutional capacity, unattractive contract terms in the earlier rounds, and a decade of policy drift towards LNG imports meant that this opportunity was never properly used.
III. Regional and Strategic Implications, and a Way Forward
The Bangladesh v Myanmar case also matters outside South Asia. Some commentators have compared it to maritime disputes in the South China Sea, where disagreements over gas exploration have also caused serious tension between neighbouring states.[29] This comparison shows that peaceful, rules-based dispute settlement, of the kind Bangladesh and Myanmar used, can offer a useful example for other regions. But a good legal precedent does not, by itself, guarantee that a state will benefit economically from its own rights.
Delay also carries a strategic cost. Chinese state-owned companies have already shown clear interest in Bangladesh’s offshore bidding rounds.[30] In neighbouring Myanmar, a Chinese state company built a long pipeline from the Rakhine coast to southern China, giving Beijing a direct energy route that avoids the Malacca Strait.[31] If Chinese companies eventually come to dominate Bangladesh’s offshore sector simply because no one else showed up in time, Bangladesh may end up trading one form of dependency, on imported LNG, for another form of dependency on a single external partner.
To avoid this outcome, Bangladesh should offer internationally competitive contract terms from the start, rather than adjusting them only after repeated tender failures. It should also build a technology-transfer partnership with an experienced deepwater operator, so that BAPEX can develop the domestic capacity it currently lacks, instead of relying entirely on whichever foreign company eventually agrees to come in.
Conclusion
Bangladesh v Myanmar fully and finally settled a maritime boundary dispute that had lasted for decades. On the legal question, there is nothing left to argue: the Tribunal’s judgment was clear, and it was confirmed two years later by a similar ruling against India. But legal certainty and economic benefit are two different things. Ten years of weak tenders, unattractive early contract terms, limited technical capacity, and finally the collapse of the 2025 bidding round and the exit of ONGC all show that a legal victory does not automatically create economic value. Unless Bangladesh reforms its offshore contract terms and builds real technical capacity, the sea it won in 2012 will remain, in practical terms, a sea it has still not used.
Table of Cases
Delimitation of the Maritime Boundary between Bangladesh and Myanmar in the Bay of Bengal (Bangladesh/Myanmar) (Judgment) ITLOS Case No 16 (14 March 2012)
Bay of Bengal Maritime Boundary Arbitration (Bangladesh v India) (Award) PCA Case No 2010-16 (7 July 2014)
Table of Legislation and Treaties
United Nations Convention on the Law of the Sea (adopted 10 December 1982, entered into force 16 November 1994) 1833 UNTS 397
Bibliography
Abdullah MGS, ‘Judgment in Maritime Boundary Dispute between Bangladesh and Myanmar: Significance and Implications under International Law’ (2012) <https://brill.com/downloadpdf/book/edcoll/9789004379732/BP000004.pdf> accessed 9 July 2026
Balaram RA, ‘Case Study: The Myanmar and Bangladesh Maritime Boundary Dispute in the Bay of Bengal and Its Implications for South China Sea Claims’ (2012) 31 Contemporary Southeast Asia 396
‘The Bay of Bengal’s Energy Scramble Has Begun – But Bangladesh Is Late to the Party’ The Diplomat (25 March 2026) <https://thediplomat.com/2026/03/the-bay-of-bengals-energy-scramble-has-begun-but-bangladesh-is-late-to-the-party/> accessed 9 July 2026
‘Exploration & Exploitation of Maritime Resources of Bangladesh: Implication for National Development’ National Defence College Journal (Dhaka) <https://ndcjournal.ndc.gov.bd/ndcj/index.php/ndcj/article/download/112/101/203> accessed 9 July 2026
Herbert Smith Freehills Kramer, ‘International Tribunal for the Law of the Sea Issues Judgment in Bangladesh/Myanmar’ (26 March 2012) <https://www.hsfkramer.com/notes/arbitration/2012-03/international-tribunal-for-the-law-of-the-sea-issues-judgment-in-bangladeshmyanmar> accessed 9 July 2026
‘Hydrocarbon Potential in Offshore Bangladesh: Current Status and Future Prospects’ (BIMRAD, 2022) <https://bimradbd.org/public/storage/upload/paal/articles/221212084727-9643Hydrocarbon%20Potential%20in%20Offshore%20Bangldesh%20Current%20Status%20and%20Future%20Prospects.pdf> accessed 9 July 2026
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[1]Delimitation of the Maritime Boundary between Bangladesh and Myanmar in the Bay of Bengal (Bangladesh/Myanmar) (Judgment) ITLOS Case No 16 (14 March 2012).
[2]Bay of Bengal Maritime Boundary Arbitration (Bangladesh v India) (Award) PCA Case No 2010-16 (7 July 2014).
[3]‘The Bay of Bengal’s Energy Scramble Has Begun – But Bangladesh Is Late to the Party’ The Diplomat (25 March 2026) <https://thediplomat.com/2026/03/the-bay-of-bengals-energy-scramble-has-begun-but-bangladesh-is-late-to-the-party/> accessed 9 July 2026.
[4]‘Offshore Oil and Gas Exploration Comes to a Halt’ Prothom Alo (26 August 2025) <https://en.prothomalo.com/bangladesh/pjf3qrtl6d> accessed 9 July 2026.
[5]Herbert Smith Freehills Kramer, ‘International Tribunal for the Law of the Sea Issues Judgment in Bangladesh/Myanmar’ (26 March 2012) <https://www.hsfkramer.com/notes/arbitration/2012-03/international-tribunal-for-the-law-of-the-sea-issues-judgment-in-bangladeshmyanmar> accessed 9 July 2026.
[6]ibid.
[7]ibid.
[8]United Nations Convention on the Law of the Sea (adopted 10 December 1982, entered into force 16 November 1994) 1833 UNTS 397, arts 15, 74, 76, 83.
[9]Herbert Smith Freehills Kramer (n 5).
[10]UNCLOS (n 8).
[11]M Golam Sarwar Abdullah, ‘Judgment in Maritime Boundary Dispute between Bangladesh and Myanmar: Significance and Implications under International Law’ (2012) <https://brill.com/downloadpdf/book/edcoll/9789004379732/BP000004.pdf> accessed 9 July 2026.
[12]ibid.
[13]Herbert Smith Freehills Kramer (n 5).
[14]Abdullah (n 11).
[15]Herbert Smith Freehills Kramer (n 5).
[16]ibid.
[17]‘Hydrocarbon Potential in Offshore Bangladesh: Current Status and Future Prospects’ (BIMRAD, 2022) <https://bimradbd.org/public/storage/upload/paal/articles/221212084727-9643Hydrocarbon%20Potential%20in%20Offshore%20Bangldesh%20Current%20Status%20and%20Future%20Prospects.pdf> accessed 9 July 2026.
[18]ibid.
[19]‘Exploration & Exploitation of Maritime Resources of Bangladesh: Implication for National Development’ National Defence College Journal (Dhaka) <https://ndcjournal.ndc.gov.bd/ndcj/index.php/ndcj/article/download/112/101/203> accessed 9 July 2026.
[20]ibid.
[21]The Diplomat (n 3).
[22]ibid.
[23]ibid.
[24]ibid.
[25]Prothom Alo (n 4).
[26]ibid.
[27]ibid.
[28]ibid.
[29]Ravi A Balaram, ‘Case Study: The Myanmar and Bangladesh Maritime Boundary Dispute in the Bay of Bengal and Its Implications for South China Sea Claims’ (2012) 31 Contemporary Southeast Asia 396.
[30]The Diplomat (n 3).
[31]ibid.
