Hossain was also appointed as energy minister. The 1973 oil crisis began to push developing countries like Bangladesh to explore their own oil and gas reserves. There was speculation of large reserves in the Bay of Bengal. Hossain began to study the legal reforms needed for Bangladesh to launch a hydrocarbon industry. 40 foreign companies applied to explore the bay. Under Hossain's tenure in the ministry, Petrobangla was established. Hossain drafted the Bangladesh Petroleum Act after studying the laws of Malaysia and Indonesia. The new law replaced colonial laws and introduced the Production Sharing Contract for multinational energy firms in the country.