Good news is that Chinese energy exploration firm Sinopec has found onshore natural gas prospect at Shariatpur after a 2D seismic survey. Sinopec carried out the survey in Shariatpur and 16 other districts in three onshore blocks to explore hydrocarbon prospects over the past one and a half years.
The pre-discovery sign is the latest in five years. In 2014, Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) had found gas at Rupganj. Drilling of exploratory wells at Shariatpur is required to spot and assess whether gas reserves there will be commercially viable or not. If found commercially-viable, it will be the 27th natural gas field discovered so far in the country.
Currently, the country has a total of 21 active gas fields while one remains inactive. Production of gas remains suspended in four gas fields.
The country's overall natural gas output is hovering around 3,125 million cubic feet a day (mmcfd), of which 2,539 mmcfd comes from local gas fields and the remaining 586 mmcfd comes as re-gasified LNG after imports. The entire natural gas production from local gas fields comes only from onshore gas fields.
The country discovered only four onshore gas fields with total recoverable reserves of around 800 billion cubic feet (Bcf) over the past decade. The onshore gas fields are Bhola North, Rupganj, Srikail and Sundalpur.
Recently, BAPEX fielded a 3D seismic survey team comprising some young engineers in possible gas field locations. They have discovered two oil fields and gas in new layers of the old gas fields. A new layer was found in the already discovered gas field at Srikail in Cumilla.
So far, the country is dependent on the international oil companies (IOCs) for hydrocarbon exploration. However, many IOCs in the past were reluctant to come to Bangladesh because of the dearth of sufficient data on prospective reserves. Those who came were too demanding. As their drilling and exploration costs were too high, they showed little interest in Bangladesh ventures. Many companies left Bangladesh after a brief stay, selling their stakes to others.
According to geologists, Bangladesh territory in the Bay of Bengal holds the biggest oil and gas prospect. Although the country's gas and oil sector is apparently vulnerable to regional politics, the government needs to take some prompt actions for facilitating a massive exploration drive.
If IOCs are engaged in the offshore exploration drives, the country can expect to reap some quick gains. A modest discovery of hydrocarbon in the offshore fields may usher in a new era for the country.
According to a conservative estimate, national demand for gas will be at around 50,000 mmcf next year, if the target of 7.0 per cent growth rate of the country's gross domestic product (GDP) is to be achieved. For that, around 24 trillion cubic feet (tcf) of hydrocarbon resources need to be discovered by 2025.
Titas is Bangladesh's second largest gas producing field after the Chevron-operated Bibiyana field. Titas is currently producing around 539 mmcfd of natural gas from 24 wells against an overall production capacity of 518 mmcfd. Sinopec was awarded the drilling project after a competitive bidding where Russian oil and gas major Gazprom was the only other bidder.
In another development, South Korea's Posco Daewoo Corporation is set to invest around US$112 million soon to conduct maiden hydrocarbon (HC) exploration in a deep-sea block in the Bay of Bengal under a deal signed last week. The firm's President and the Chief Executive Officer (CEO) unveiled the provisional investment plan after signing the deal on the block DS-12.
In fact, high optimism was aired on discovering new hydrocarbon in the Bangladesh's deep-sea block DS-12 located adjacent to Myanmar's AD-7 offshore block where the Korean firm is also the operator. DS-12 and AD-7 are located in similar geological structure in the Bay of Bengal. The Koreans expect a similar result from the Bangladesh gas block.
Two of the Daewoo-operated blocks -- A-1 & A-3 -- in Myanmar are currently producing around 500,000 mmcfd of natural gas. Currently, no oil-and-gas-exploration activities are being carried out in Bangladesh's deep offshore hydrocarbon turfs, much to the dismay of concerned citizens.
If hydrocarbon is discovered, Petrobangla will share profit at the range of minimum 65 per cent and maximum 90 per cent for oil or condensate and minimum 60 per cent and maximum 85 per cent for natural gas. The price of gas has been pegged to high-sulphur fuel-oil (HSFO) prices and the floor price for HSFO has been fixed at US$100 per tonne and the ceiling price at $200 per tonne. The price will be hiked by 2.0 per cent per annum with 130 per cent of the market price from the date of commercial production.
There is no denying that the country has been facing critical gas supply situation for the last few years due to the discouraging performance in exploration, exploitation and extraction of gas from its 'hidden' reserves. The recent discovery of huge gas reserves by India and Myanmar in the Bay near Bangladesh's economic zone is clearly an eye-opener to go all-out for deep-sea exploration.
In fact, a number of IOCs had earlier written to the energy ministry with a request to carry out a seismic survey in the Bay of Bengal, prior to floating tender. They had also recommended splitting the country's offshore sea territory into a number of small gas blocks to accommodate an increased number of IOCs in offshore hydrocarbon exploration. Surprisingly, the government remained silent on the issue.
The country urgently needs massive investments from international oil and gas companies given the financial and technological constraints of its own state-run firms. According to experts, investment worth over $30 billion is needed to tap the gas potential in the Bangladesh part of the Bay of Bengal.
In the circumstances, the government needs to adopt an integrated policy framework involving the private sector for accelerating drilling activities both in onshore and offshore fields. Bangladesh should also develop expertise and adequate skilled manpower for carrying out exploration work to be self-sufficient in energy.
© 2017 - All Rights with The Financial Express