Hydrocarbon Unit was established in July 1999 in the form of a project titled "Strengthening of the Hydrocarbon Unit in the Ministry of Energy and Mineral Resources" under grant financing from Norwegian Government. As there was lack of International standard expertise in the energy sector, an Institutional Co-operational Contract was signed between Norwegian Petroleum Directorate (NPD) of the Ministry of Petroleum and Energy, Norway and Hydrocarbon Unit (HCU) in the Energy and Mineral Resources Division. This institutional co-operation contract resulted in successful transfer of technology between the two countries and as a result HCU successfully implemented some National important activities of the energy sector which includes the following:

• Gas Reserves Estimates of the country.
• Resources Potential Assessment of the country.
• Optimal Gas Utilization study, which included Long-term Supply Demand Projection and Utilization of Natural Gas.
• Monitoring of Production Sharing Activities on behalf of Energy and Mineral Resources Division.
• Establishment of HCU Mini Data Bank.
• Act as Technical Arm in the Energy and Mineral Resources Division.

After successful completion of the first phase in December 2005, the second phase titled "Strengthening of the Hydrocarbon Unit (Phase-II)" in the Energy and Mineral Resources Division has been continuing since April 2006 and expected to be completed by the end of December 2012 being financed by the Royal Norwegian Government Grant and administered by Asian Development Bank.
Feeling the necessity of such activities in the first Phase, Government of Bangladesh has already set up HCU as a Permanent Footing in the Energy and Mineral Resources Division.
Energy and Mineral Resources Division entrusted the HCU with the following functions to perform:

• To impart opinions as per necessity of Energy and Mineral Resources Division prior to finalizing Production Sharing Contract.
• To advice as per requirement of Energy and Mineral Resources Division concerning negotiating Production Sharing Contract.
• To participate in Joint Management Committee (JMC) and Joint Review Committee (JRC) and accordingly submit report to Energy and Mineral Resources Division.
• Act as Technical Arm in the Energy and Mineral Resources Division.
• To carry out following responsibilities regarding Upstream Regulation:

• Formulation of exploration policy;
• Updating reserve and resource estimation of gas at regular intervals;
• Data Management;
• Top monitoring of exploration and development activities under Production Sharing Contract and accordingly report to Energy and Mineral Resources Division at regular intervals;
• Domestic and regional gas demand forecast and market analysis;
• Production and depletion management of natural gas.

• To perform any other tasks assigned upon by Energy and Mineral Resources Division.