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A lone international contractor hired to delineate hydrocarbons in Bangladesh's offshore blocks did little over the past two years, while the country suffers fuel shortages, sources say.
India's oil-and-gas-exploration company named ONGC Videsh Ltd (OVL) is currently the only international oil company (IOC) that has rights to explore untapped offshore in some blocks in the Bay of Bengal, says a senior Petrobangla official.
"But, after a 'failed' attempt at Kanchan gas-well under the SS-04 block in Moheshkhali Island a couple of years back, the Indian company did not move forward with its exploration works," he adds.
The tenure of its production-sharing contract (PSC) with Petrobangla is set to expire in February 2025.
Under the PSC, the oil-and-gas-exploration company has contractual obligations to drill two more wells -Titly in block SS-04 and Moitree in block SS-09.
But the OVL management has yet to engage any contractor for the drilling of Titly and Moitree wells, they said.
With only one year left from its PSC tenure, the Indian firm is not likely be able to complete drilling in the given time, said sources.
The firm has a budget of US$65 million to drill the wells, they said.
Previously, Petrobangla had extended OVL's PSC tenure until February 2025 from February 2023 at the latter's request, as it 'failed' to carry out the necessary exploration works within its previous stipulated timeframe.
It was the third extra period of time that the OVL got from the Bangladesh Oil, Gas and Mineral Corporation or Petrobangla.
The state corporation earlier had extended the company's PSC tenure by two more years until February 2023 from February 2021 in its bid to boost offshore exploration.
Meanwhile, Petrobangla signed two PSCs with OVL, the operator of shallow sea (SS) offshore blocks SS-04 and SS-09, on February 17, 2014 which was set to expire in February 2019 as per terms of the original PSC.
At Kanchan gas well, OVL had drilled beyond its targeted depth of around 4,228 metres in search of a commercially viable gas deposit. But all its efforts ended up finding only huge deposits of clay and shell-stone sequence and no sandstone, meaning there is no gas-reserve prospect there.
The Kanchan well was up for the first offshore drilling in the country's maritime territory in last six years.
Australian company Santos along with Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) in February 2017 drilled Magnama-02 well under block 16 only to find it dry.
The joint venture drilled the offshore well into a depth of around 3,200 metres, which cost BAPEX an estimated $29 million.
The country has no producing offshore gas well, and its entire natural gas output comes from onshore fields as well as import of liquefied natural gas (LNG).
OVL is the operator of blocks SS-04 and SS-09, having a participating stake of 45 per cent. Block SS-04 covers an area of 7,269 square kilometres (sq-km), while block SS-09 stretches over an area of 7,026 sq-km. Water depth of both the blocks ranges between 20 metres and 200 metres.
As per the PSC, the firm is committed to conducting 2,700 line-kilometre 2D seismic-data acquisition and processing as well as drilling one exploratory well in block SS-04.
Also, it has to do the same for another 2,700 line-km 2D seismic- data acquisition and processing as well as drill two exploratory wells in block SS-09.
The OVL owners will be allowed to operate and sell oil and gas for 20 years from an oil-field and 25 years from a gas-field under the deals. The company has already completed around 3,100 line-km 2D seismic survey for both the blocks.