Santos International is to invest $100m in a three-well drilling programme offshore Bangladesh.

The announcement follows a recent decision by the Bangladeshi Government to allow the marketing of new offshore gas at directly negotiated prices.

Santos president John Chambers said the drilling work will begin from October 2011, and its success will provide some relief to the present gas shortages.

The drilling activities are expected to take about two years to complete and may require additional funds, reports Reuters.

Santos is operator of the Sangu hub (block 16) under a production sharing contract, and is supervised by Petrobangla.

Santos vice-president in Bangladesh Ajay Nambia said the Sangu hub is the main part of the Santos strategy in Bangladesh and is expected to deliver up to 500 million cubic feet of gas per day.