Speeding up gas well exploration  

Despite loud drumbeating about the efforts in oil and gas exploration, the government-run Bangladesh Petroleum Exploration and Production Company (Bapex) drilled 10 exploration wells during the last nine years and only three small gas fields with merely 800 billion cubic feet of gas reserves were discovered. On the other hand, international oil companies (IOCs) drilled only three exploration wells including one in the offshore, which led to no discovery over the years.

Until now, the country's annual gas consumption has reached one trillion cubic feet and it would require addition of new gas of the same volume every year to maintain the level of current supplies which is already 38 per cent short of the demand, according to official data.

The country now produces 2,750 million cubic feet of gas per day, with a shortage of more than 500 mmcfd, according to Petrobangla. At the current pace of consumption, its 13.22 trillion cubic feet of proven and probable gas reserves would last until 2030. On the other hand, Myanmar has about 10 trillion cubic feet of proven gas reserves. The country exports gas to Thailand and China. India holds at least 91 trillion cubic feet of recoverable gas reserves. On top of conventional gas reserves, it holds an estimated 63 trillion cubic feet of recoverable shale gas, according to an estimate.

In fact, the level of gas supply in Bangladesh started depleting since October 2017 and settled at 2,685 mmcfd until now from its average peak supply of 2,750 mmcfd. Inadequate supply has affected industrial production, electricity generation and household cooking. The situation may pose a serious threat to the country's energy security as the demand may have to be met with imports.

The state minister for power, energy and mineral resources, however, blamed the Energy Division for the failure in making any significant progress in oil and gas exploration in the past few years. Earlier, he appeared upbeat about some progress in the government's programme of drilling 108 wells including a good number of exploration wells as well as production wells.

Only recently, a cabinet meeting was told of striking new gas, about 32km north of the Shahbazpur Gas Field in Bhola. The reserve is estimated to be of 600 billion cubic feet of gas. Initial tests suggest that the gas field looked to be the most promising in Bangladesh. Yet details are yet to be available.

The new field's gas pressure was found to be at 5,600 PSI (pound per square inch) which is the highest among all gas fields in the country. It has the potential to become the largest reserve of natural gas in the country, surpassing Titas in Brahmanbaria. But the rest of the country might not be able to use the new-found gas because of Bhola's geographical isolation. Like now, the gas will be used in power generation and in industries of the region. Pipelines through rivers to the national gas grid will be way too expensive.

The government had earlier awarded contracts to Russia's Gazprom Corporation for drilling offshore wells. Besides, ONGC Videsh and KrisEnergy-Santos JV could make no significant progress in oil and gas exploration in three shallow sea blocks- 4, 9 and 11 after signing production sharing contracts in 2014. In 2017, Petrobangla also signed another PSC with Korean POSCO Daewoo for oil and gas exploration in deep sea block 12 which yielded no progress so far.

Failing to discover gas reserves, the government is putting emphasis on imports of expensive liquefied natural gas (LNG) as 1,000 mmcfd gas is expected to be fed to the national gas supply system pushing the average gas price by three to five times.

The government's decision to import is apparently aimed at supplying adequate gas to the industrial sector. Obviously, the authorities have the right to adopt new strategies on how gas resources could be utilised. But domestic gas problem must be resolved first with random efforts to discover indigenous gas.  A recent Titas Gas survey report indicated that the amount of gas wasted in the industrial sector every day is equal to the amount of gas provided to the residential houses in the entire country.

During the summer, which is not far off, with the daily demand reaching the peak of 3,300 million cubic feet (cft), the gas distribution companies will find it challenging to keep the consumers content with the available supply of gas. It is not possible to overcome the huge shortfall of gas in a short period of time. Only supplies from new onshore gas wells, which are inadequate, could improve the supplies to the consumers.

Entrepreneurs are in real jeopardy as they are unable to run their factories due to shortage of gas and electricity. They are operating their boilers buying gas from CNG pumps which increases the cost of production. Business leaders are demanding that the government should ensure uninterrupted supply of gas and electricity to private sector for hastening the country's industrialisation.

Nobody knows why the government is failing to make any progress in oil and gas exploration in the country's vast offshore area, approximately 120,000 square kilometres, in the past four to six years after dispute settlements of maritime boundaries with Myanmar and India.

The government even suspended its initiatives to carry out a two dimensional seismic survey in the offshore waters for at least three years leaving no progress in awarding contracts to the international oil companies for offshore exploration. It is also not known why the government is still reluctant to drill exploration wells in locations like Jaldi and Patiya in the Chittagong Hill Tracts, Teknaf in Cox's Bazar, Pabna, Bogra and Tangail, which have, according to geologists, much potential of gas reserves.

All said and done, inadequate supplies of gas and electricity as well as their frequent price hikes, coupled with the slow progress in both offshore and onshore explorations, point to the government's failure to adopt pragmatic policies in the energy sector. Such policies need revision for the greater interest of the nation.

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