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America's oil-and-gas major Chevron started drilling Bibiyana-27 well in the country's largest-producing Bibiyana gas field on Wednesday, said sources.
The gas filed in the northeastern part of Bangladesh, located under block 12 in Habiganj district of Sylhet division, is currently producing natural gas of around 1,100 million cubic feet per day (mmcfd), which accounts for over half the total output from the local gas fields, according to official data of Petrobangla.
Chevron Bangladesh has planned to drill several gas wells at the newly obtained 'flank' area if the Bibiyana-27 well drilling comes out successful.
Sources said the multinational company last year obtained a 60-square-kilometre 'flank' area from Petrobangla outside its existing contract zone to the north of the Bibiyana gas field to carry out exploration afresh.
Bangladesh's state energy agency Petrobangla agreed to offer the new area as the US firm showed interest to drill three onshore wells there.
Chevron Bangladesh inked the production sharing contract (PSC) with Petrobangla in November 2004 to explore new gas in the Bibiyana field.
It started supplying natural gas commercially from the Bibiyana turf in March, 2007 with an initial production capacity of 250 mmcfd after an initial investment of US$200 million.
The firm's output was increased to around 900 mmcfd from October 2014 and raised further to around 1,200 mmcfd from March 2015.
Chevron Bangladesh is currently getting around US$2.76 per Mcf (1,000 cubic feet) from Petrobangla against gas sales from the Bibiyana field.
Discovered in 1998, the Bibiyana field was initially estimated to have 2.4 Tcf of proven recoverable gas. But follow-up studies and development of this field have confirmed that the field is much larger than the initial assessment and with the latest estimation of 2015, Bibiyana's reserves stand around 7.0 Tcf.
Petrobangla has already extended the PSC tenure for Jalalabad, Moulavi Bazar and Bibiyana gas fields of Chevron by five years each with a provision of extending it by five more years to boost exploration.
The PSC tenure of Jalalabad and Moulavi Bazar gas fields under block 13 and 14 has been extended by five years to 2029 from the previous schedule of contract expiration in 2024. And the deal could be extended further, until 2034.
The tenure of the remaining block 12 (Bibiyana) will also expire in 2034.
The country's overall natural gas output is hovering around 2,938 mmcfd including 801 mmcfd of re-gasified liquefied natural gas (LNG).
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.