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The Russian oil-gas exploration company Gazprom starts mobilising rigs and equipment to do the drilling of three onshore gas wells in gas-rich Bhola island.
It has already taken over the sites to primarily drill Tabgi-01 onshore well within months.
The next two-Bhola North-02 and Illisha-01-will be rigged in phases.
Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) managing director Mohammad Ali said this to the FE on Saturday.
He says overseas engineers and technicians are flying in to initiate the drilling to help boost the country's overall natural gas output from local fields.
It will be a sigh of relief for the government as the latter is trying hard to source gas by importing expensive liquefied natural gas (LNG) to meet the mounting demand, adds the BAPEX top brass.
LNG price in the international spot market is now hovering an estimated $51 per million British thermal unit (MMBTU).
The import cost of LNG from long-term suppliers, however, is close to $11.5 per MMBTU.
Natural gas production cost from Gazprom's wells will be around $4.0 per MMBTU, according to sources.
The Russian state entity obtained the contract to drill three wells at a total cost of $77.18 million (Tk 6.48 billion).
The drilling cost of these wells is around 56 per cent higher than Gazprom's previous average cost of drilling onshore gas fields worth $16.48 per well.
The BAPEX discovered Bhola gas field several years back where the three onshore wells are located.
Gazprom was given the drilling job under the Speedy Supply of Power and Energy (Special Provision) (Amendment) Act-2010.
The law has a provision of immunity to those involved with a quick fix.
Gazprom has drilled a total of 17 onshore wells at different parts across the country since 2012.
Separately, Gazprom and Petrobangla, the parent company of BAPEX, inked a memorandum of understanding in January 2020 for strategic cooperation.
Energy experts term Gazprom's drilling cost 'exorbitant', 'unjustified' and 'unrealistic' given the current context of the coronavirus pandemic when international oil companies do not have much exploration work in hand.
According to market insiders, rental fees of rig, an important equipment of hydrocarbon exploration, also fell drastically overseas as most of the rigs are idle globally due to inadequate exploratory jobs.
When contacted, Consumers' Association of Bangladesh energy adviser Prof M Shamsul Alam termed the contract with Gazprom a 'massive theft'.
He accuses a vested quarter of pocketing huge money discounting the country's interests, saying that it will raise the overall cost and also slow down the growth of industrialisation.
"We are an ill-fated nation," Prof Alam lamented.
Badrul Imam, a geology professor at Dhaka University, says this will also undermine the BAPEX.
He suggests that the BAPEX be given the drilling job in Bhola, which is considered another gas hub of the country after north-eastern Sylhet region.
The BAPEX discovered gas at Shahbazpur in Bhola, thus opening up the potential of the prospective gas hub, mentioned Prof Imam.
He uttered that well drilling by Gazprom in Bangladesh has a bad track record.
Its drilling was faulty in some wells, which were later developed by the BAPEX, he said.