In a serious drive to access domestic resources the government has of late undertaken a move to frame a maiden policy to expedite countrywide hydrocarbon explorations with the intention of easing the growing reliance on imported fuels. The Energy and Mineral Resources Division under the Ministry of the Power, Energy and Mineral Resources has already drafted the policy.
Energy ministry feels it urgent to accelerate local hydrocarbon explorations against the backdrop of the leanest-ever discoveries in the last one decade. The 'lower-than-expected' explorations prompted the government to initiate the import of 'expensive' liquefied natural gas (LNG) since April 2018.
According to what the government has in mind, a geological survey will spot potential areas first, followed by a two-dimensional seismic survey to delineate prospective hydrocarbon reserves. A three-dimensional survey and subsequent drilling will be carried in the potential areas thereafter.
The national oil and gas exploration companies will have to apply a standard exploration and operational procedure to ensure a better success. The state-owned Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) will have to formulate a detailed manual on it and ensure its execution.
Oil and gas experts say there is no alternative but to offer more contracts to international oil companies (IOCs) onshore and offshore to speed up exploration and ensure future energy security.
Welcoming the government's new initiative to frame a separate policy, oil sector experts say the government should have adopted such a policy long ago. The country discovered only four onshore gas fields with a total recoverable reserves of around 800 billion cubic feet (bcf) in last one decade. The onshore gas fields are at Bhola north, Rupganj, Srikail and Sundalpur.
Besides, Chinese energy exploration firm Sinopec recently found an onshore natural gas prospect in Shariatpur. The drilling of exploratory wells will be required to assess whether gas reserves there is commercially viable or not.
Natural gas discovery from 1997 to 2006 was around 6.18 trillion cubic feet (tcf) from two discovered gas fields-Moulvibazar and Bibiyana. This was almost eight times higher than the discoveries in the decade that followed. Bangladesh currently imports around 580 million cubic feet per day (mmcfd) equivalent of LNG (Liquefied natural gas). This is around 6.5 million tonnes of petroleum products apart from locally produced gas to the tune of 2,700 mmcfd and locally refined 1.2 million tonnes of petroleum products.
Earlier, state-owned Petrobangla shelved its plan to launch a bidding round for hydrocarbon exploration in the country's untapped offshore blocks. The oil and gas corporation deferred the planned bidding round at least for a year. A multi-client seismic survey was supposed to be conducted by TGS-Schlumberger, the Norwegian-US joint venture (JV).However, the Norwegian-US JV is expected to initiate survey to assess hydrocarbon reserve potentials in the country's territorial water by this year.
Petrobangla has already finalised the draft model PSC (production sharing contract) for awarding offshore blocks to the selected IOCs. The cabinet committee on economic affairs approved awarding the job to the TGS-Schlumberger recently after four years' delay.
The exploration period for hydrocarbon in the offshore blocks will also be reduced from the model PSC as the selected bidders would find the 2D data when they would bid for the blocks. Other terms of the model PSC will remain unchanged.
Some 22 offshore blocks - eight in shallow water and 14 in deep water -- are up for the forthcoming bidding round.
Many IOCs did not take part in the offshore bidding rounds in 2008, 2012 and 2016 on the grounds of 'inadequate' data and fiscal terms. The country currently has a total of 26 offshore blocks.
Five IOCs have active PSCs either individually or under joint venture to explore three shallow water blocks and one deep water blocks. ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are jointly exploring shallow water block SS-04 and SS-09.
The joint venture of Australian Santos and Kris Energy is exploring shallow water block SS-11. POSCO Daewoo Corporation has exploration contract to discover hydrocarbon in deep water block DS-12. The country has not offered any onshore oil and gas blocks since 1997.
With the new government's move, international oil companies (IOCs) will get a fresh chance to take part in the hydrocarbon exploration drive in Bangladesh under production-sharing contracts (PSCs). The PSCs will come up for update from time to time, if necessary, to woo the IOCs in such activities.
Other interested firms may also take part in onshore exploration under a joint venture basis. Modern technologies will be adopted and local as well as foreign expertise be utilised in discoveries. A research and development unit will be set up to boost explorations by using modern technologies.
Meanwhile, US-based Chevron has intended to carry out an 'exploration study' in 11 onshore blocks in Bangladesh fully or partially, to delineate new hydrocarbon prospects and help augment the country's overall natural gas output. It aims to find potentially drillable prospects in the unexplored areas of the blocks - 1, 2A, 2B, 3A, 3B, 8, 9, 11, 12, 13 and 14.
Among the blocks a few are still vacant, or unexplored, some owned by state-run Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Ltd (SGFL) and some owned by Chevron Bangladesh itself.
The US company wrote recently to the state-owned Petrobangla seeking approval to carry out the study, attain access to relevant data currently available with the BGFCL, SGFL and Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) and ink a confidentiality agreement. It believes it will be able to utilise its knowledge in reservoir 'stratography.'
Chevron also aims for further exploration study in the 'relinquished areas,' in all the three of its blocks, which it surrendered to Petrobangla earlier seeing 'poor' prospects there, said the official.
Petrobangla recently extended the PSC tenure for Jalalabad and Moulavi Bazar gas fields of US's Chevron Bangladesh by five years each with a provision of extending it by five more years to boost exploration by Chevron.
All said and done, what is needed right now is a prompt government decision to boost local exploration drive with all available resources. The country requires a good result out of the explorations urgently to raise overall natural gas output.
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