Santos is to start drilling block 16 in the Bay of Bengal, offshore Chittagong, Bangladesh.

The company will invest $126m in the three-well programme, which aims to explore hydrocarbons.

Bangladesh Oil, Gas & Mineral Corporation chairman Mohammad Hussain Monsur said the company has permitted Santos to sell its product from the new offshore structures directly to private buyers at market price.

Block 16 is owned by Santos, which has a 75% interest, and Halliburton, which has 25%, reports Reuters.