US oil major plans expanding hold on BD gas blocks

US oil-major Chevron bids for developing Bangladesh's onshore hydrocarbons block-11 and attain exploration rights over an extended area of block-12 to discover fresh gas to help the country mitigate energy crisis.

The oil-gas blocks are situated in gas-rich Surma Basin of the country's northeastern region that contributes much of the fossil fuel in the national

gas grid.

Chevron Bangladesh has submitted an unsolicited proposal recently to state-run Petrobangla to develop these two potential onshore areas, a senior Petrobangla official told The Financial Express Monday.

Contacted, Chevron officials wouldn't disclose anything about the price of natural gas it wants to sell to Petrobangla after production from there nor its investment plan to develop these new onshore areas.

But sources said the US company sought to link the gas price to the price of Brent Crude on the international market and demanded that the gas price should be 10 per cent of the Brent Crude price, which will be variable.

Under the current international market rate the price would be US$7.05 per cubic meter, considering the Brent Crude price at US$70.50 per barrel, which is around 135-percent higher than the price at which it sells gas to Petrobangla from the currently operational gas fields.

The gas price would be similar to the price the state corporation had offered under the latest offshore-bidding round but witnessed a zero turnout.

Chevron previously had invested around US$500 million under its Bibiyana project during 2012-2015, which included a gas-plant expansion, new development wells and an enhanced liquids- recovery unit.

The US firm could add around 350 million cubic feet per day (mmcfd) of natural gas after drilling 12 new gas wells and installing two gas- processing plants with this investment around a decade back.

Sources say the company's investment in the new onshore areas could be similar to what it had invested in Bibiyana gas-plant-expansion project.

If new gas could be found, Chevron would be able to supply natural gas within the shortest possible time using the same processing plant it uses to process Bibiyana gas, market-insiders have said.

It could ramp up natural gas production by up to 1,350mmcfd from Bibiyana and the new areas using the currently operational Bibiyana processing plant, they added.

Petrobangla has yet to take any decision on Chevron's hydrocarbons exploration and its investment plan.

Previously, the Bangladesh Oil, Gas and Mineral Corporation or Petrobangla had turned down a similar proposal from Chevron to develop onshore Rashidpur gas field, owned by the corporation's subsidiary Sylhet Gas Fields Ltd (SGFL).

Chevron had sought 10 per cent of the Brent Crude price for Rashidpur gas after development of the field and initiating production. Instead of allowing it to develop Rashidpur gas field, Petrobangla has engaged its subsidiary Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) to drill extensively over there.

The onshore block-11 is one of the several blocks that were kept ring-fenced for development by BAPEX.

Officials said Chevron placed the proposal after carrying out 'exploration study' in 11 onshore blocks, fully or partially, to delineate new hydrocarbon prospects over the past couple of years.

Among the blocks 1, 2A, 2B, 3A, 3B, 8, 9, 11, 12, 13 and 14, which were studied by Chevron, few are still vacant, or unexplored, some owned by state-run Bangladesh Gas Fields Company Ltd (BGFCL) and some owned by Sylhet Gas Fields Ltd (SGFL) and the remaining are Chevron's.

During the study, Chevron attained access to relevant data and carried out study in reservoir 'stratography', and unconventional reservoir 'farcies.'

Officials have said the US firm attained a 60-square-kilometer 'flank' area from Petrobangla outside its existing contract zone to the north of the Bibiyana gas field in the gas-rich northeastern region a couple of years back.

It also invested around US$150 million in drilling a couple of new wells BY-27 and BY-28.

Chevron has been supplying around 40mmcfd gas into national grid from BY-28 well.

The American gas-and-oil giant's another investment plan worth US$65 million to build Jalalabad compression station is now stalled due to nonpayment of around US$200 million in overdue gas bills by Petrobangla.

Chevron had approved the budget in late 2023 aiming to complete the compression-station project by 2025.

A compressor station is a facility which helps the process of transporting natural gas from one location to another.

"Chevron Bangladesh has been working with Petrobangla and the government of Bangladesh for over 30 years, supplying the nation with safe, reliable, and low-cost energy," says media and communications manager of Chevron Bangladesh Shaikh Jahidur Rahman.

While Chevron Bangladesh cannot disclose specific future plans at this time, it continues exploring opportunities in the energy sector of Bangladesh, he adds.

"As part of our ongoing efforts to support the government in maintaining uninterrupted gas supply the team is always evaluating various opportunities.

"As a matter of policy, we do not comment on specific commercial matters," Mr Rahman told the FE correspondent.

Chevron Bangladesh is currently the largest producer of natural gas in Bangladesh with its output of around 1,120 mmcfd from three of its onshore fields -- Bibiyana, Jalalabad and Moulavi Bazar, which are located in blocks 12, 13 and 14 respectively, according to official data of Petrobangla as on March 10, 2025.

The country's overall natural gas output hovers around 2,858 mmcfd, including 971 mmcfd of re-gasified liquefied natural gas (LNG) and the remaining 1,887 mmcfd from local gas fields that include the Chevron-operated fields.

Meanwhile, around a decade back in 2015, Chevron had proposed to invest around US$650 million in installing a new compression station at Bibiyana gas field and drilling three more wells at Jalalabad gas field, tagging condition of annual tariff hike by 3.0 per cent for Bibiyana gas.

The US firm later dropped the investment plan as Petrobangla rejected its plea for annual hike of natural gas tariffs.

Chevron instead announced sellout of its Bangladesh stakes to Chinese joint-venture Himalaya Energy in April 2017.

The US firm reversed its decision in October 2017 when Petrobangla moved to acquire its assets. It decided not to sell off its Bangladesh stakes but to stay in Bangladesh.

Azizjst@yahoo.com