Chevron decides for fresh gas exploration after dithering

America's oil-and-gas major Chevron is all set to begin next week fresh gas drilling in Bangladesh after an eight-year pause, apparently baited by the country's mounting demand amid depleting domestic reserves.

Chevron Bangladesh intends to drill Bibiyana-27 well in the country's largest producing onshore gas-field through pouring fresh investments although overdue payments to the US firm by Bangladesh have ballooned recently.

Petrobangla currently owes around US$280.72 million against gas purchase from Chevron, says a senior official of the state corporation.

"Chevron's investment decision for drilling the new well in the Bibiyana turf was, however, taken over a year ago when Bangladesh was able to clear gas bills to Chevron regularly," the official adds.

Neither any Chevron Bangladesh official nor any Petrobangla one would tell the amount of new investment the US firm will make.

Sources said the multinational last year also attained a 60-square-kilometre 'flank' area from Petrobangla outside its existing contract zone to the north of the Bibiyana gas-field in the gas-rich northeastern region to carry out exploration afresh.

Petrobangla agreed to offer the new area as the US firm showed interest in drilling  three onshore gas wells there.

After attaining the new flank area last year, Chevron also intended to develop further two onshore gas-fields and one onshore block in Bangladesh in quest of discovery of new gas zones to supply gas from those to help mitigate the country's energy crisis that compels costly LNG import.

Previously, Chevron Bangladesh had invested around US$500 million in Bibiyana expansion project during 2012-2015, which included a plant expansion, development of new wells in Bibiyana and Jalalabad gas fields, and an enhanced liquids-recovery unit, said the Petrobangla official said.

After the $500-million investment, the firm proposed to invest around $650 million more for installing a new compression station in Bibiyana and drill three more wells in Jalalabad gas-field in 2015, tagging a condition of annual tariff hike by 3.0 per cent for the Bibiyana gas.

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

Instead, it announced its exit plan through selling off its Bangladesh stakes to a Chinese joint venture, Himalaya Energy, in April 2017.

The US firm, however, reversed its sellout decision in October 2017 when Petrobangla moved to acquire its assets. It decided to stay back in Bangladesh and carry on its operations.

In its latest proposal to Petrobangla, Chevron intends to develop Rashidpur and Chhatak gas- fields and Block-11 areas to carry out necessary survey and drilling of wells to produce gas, said another Petrobangla official.

Rashidpur gas-field, owned by Petrobangla's subsidiary Sylhet Gas Fields Ltd (SGFL), is producing around 46 million cubic feet per day (mmcfd) of gas from five producing gas wells against the overall production capacity of 60 mmcfd.

Rashidpur also churns out around 38 barrels of condensate every day as spinoff.

Chhatak gas-field is still underdeveloped and now abandoned.

Two consecutive gas blowouts in 2005 at Chhatak (west) gas-field, also known as Tengratila, during drilling by Canadian company Niko Resources led to suspension of its development.

Reserves in Chhatak gas-field are under re-evaluation due to excessive seepage caused by the two consecutive blowouts 18 years back.

Onshore Block 11 is one of the two blocks that were kept ring-fenced for development by Bangladesh's lone hydrocarbon- exploration company -- Bangladesh Petroleum Exploration and Production Company Ltd, or BAPEX.

Chevron placed the investment and development proposals after carrying out 'exploration study' on 11 onshore blocks to delineate Bangladesh's 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, a few are still vacant, or unexplored.

During the study, Chevron attained access to relevant data and carried out study in reservoir 'stratography', and unconventional reservoir 'facies', Petrobangla officials said.

Chevron is currently the largest producer of natural gas in Bangladesh with its total output of around 1,286 mmcfd from three onshore fields - Bibiyana, Jalalabad and Moulvi Bazar, which are located in blocks 12, 13 and 14 respectively, according to Petrobangla statistics as on August 18, 2023.

The country's overall natural gas output is hovering around 2,920 mmcfd including 772 mmcfd of re-gasified liquefied natural gas (LNG).

The remaining 819mmcfd gas comes from remaining local gas-fields, excluding Chevron-operated ones.

Bangladesh is now struggling to cope with the mounting natural gas needs as the domestic demand is now hovering around 4,000mmcfd, according to Petrobangla.

azizjst@yahoo.com