The Financial Express

Exploring offshore hydrocarbon

| Updated: November 09, 2022 20:53:10

Exploring offshore hydrocarbon

Local energy experts have long been complaining that not enough has been done to  explore the country's gas reserve, particularly that of the potential off-shore blocks. Had the authorities been serious in pursuing a policy of searching hydrocarbon as part of exploiting its blue economy in the Bay of Bengal with equal keenness it displayed to establish its rightful legal claim on the maritime boundary, energy exploration would have got the required momentum. Now that the energy crisis has hit the country hard, they have been looking desperately for the country's reserves instead of prolonging its dependence on imported fossil fuels like oil and gas in liquefied form. On the recommendation of a Scottish research and consulting group, the Petrobangla has revised the production sharing contract (PSC) with a view to luring international oil companies (IOCs) for hydrocarbon exploration in the offshore deep waters of the Bay.

According to the proposed market-based pricing formula the Petrobangla has already submitted to the Ministry of Power, Energy and Mineral Resources (MPEMR), the Bangladesh government will buy gas, if and when produced, from IOCs  at about US$ 10 per Mcf (1,000 cubic feet). This offer is 31-38 per cent higher than the offer made under the 2019 PSC. Tenders to be floated for exploration of the 15 open deep-sea blocks hopefully by the yearend therefore have a greater chance of drawing attention of IOCs. Against the global energy crunch, this reactive as against a proactive move, may still get good responses from global oil companies with proven records. There is yet another bait for the IOCs in that the Petrobangla has suggested a reduction in the government share under the PSC from a margin of 55-80 per cent to 40-70 per cent. If the oil companies find this further attractive, there is no reason why the MPEMR will not even expect a competition among the explorers and producers of gas and oil.

Reports have it that Bangladesh has been even lagging behind Myanmar in entering production-sharing contracts ---individual or joint-venture---with foreign companies. There is no question countries like Bangladesh and Myanmar at this stage can achieve the capability of  offshore ---shallow or deep-sea ---exploration for hydrocarbon. What a country like this can do is get the best deal out of collaborative or contract-sharing arrangements. Bangladesh must strike a balance between its own interests and its compulsion for finding its sources of energy, courtesy of foreign companies.

In case of contracts for onshore gas exploration and extraction from Magurchhara and Tengratila gas fields, the authorities of the time made serious blunders by hiring services of companies with dubious records. Similar mishaps should be avoided by all means. The country's interests must not be compromised at all. The PSC should be made as transparent as is humanly possible. Again, the BPC is not particularly famous for maintaining transparency and taking care of irregularities within its system. In case of blue economy, there will be huge scopes for exploiting the grey areas. Let there be a highly effective system of vigilance in plugging all cracks and loopholes.          

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