The Financial Express

Bangladesh's gas crisis: A puzzling paradox

| Updated: July 28, 2022 21:21:48

Bangladesh's gas crisis: A puzzling paradox

Bangladesh has enough power- generation capacity to provide electricity to all, but a depressing reality is that load-shedding has become a daily affair. The question is why then enough power is not generated? The answer is the operators are constrained by shortage of fuels, primarily gas, to run the power plants.

Why should be gas shortage in a deltaic country that is supposed to be gas-rich? The answer is better understood than explained-there has been little exploration in last two decades. And why the nation should be lagging in exploration? One answer that comes clear from flurries of discussions these days is--the failure of the authorities to take timely decision when gas reserves started depleting.

Was it due to poor capability of the gas-exploration agencies to dig for new reserves to replete the reserves, or was it to serve vested interests through not going for large-scale exploration so that  gas import could benefit them? The excuse that the existing gas crisis and the consequent power cuts are the results of the Russia-Ukraine war is not fully acceptable. The current gas crisis in the country was not inevitable-- it occurred for not doing enough to lift the gas from under the ground. Bangladesh, one of the largest deltas in the world, is deemed rich in natural gas. The deltas are always rich in hydrocarbons. But there is a vested group opposed to exploration as their businesses will be hampered if domestic gas resources are tapped.

Internationally reputed companies have testified that there is more untapped natural gas in Bangladesh than had been extracted by it. A two-year joint study by the US Geological Survey (USGS) and Petrobangla showed that Bangladesh has undiscovered natural gas  to the tune of  about 32 trillion cubic feet. The Norwegian Petroleum Directorate (NDP) showed that Bangladesh has 42 trillion cubic feet of undiscovered gas. The NDP carried out its study in collaboration with a Bangladeshi counterpart, the Hydrocarbon Unit (HCU) under the ministry of energy and power.

 Recently, Ramboll, a European oil and gas consultant, suggested that there is about 34 trillion cubic feet of undiscovered gas in Bangladesh. As Bangladesh consumes about one trillion cubic feet of gas per year, it means that 34 trillion cubic feet would be there for at least 30 years for the nation to consume.

But Bangladesh lags behind in exploration to find and tap its reserves compared to the US, Norway and Australia. Compared to even India's Tripura state  Bangladesh has so far drilled about 100 exploratory wells while Tripura has drilled more than 150.

The authorities never explained why they drilled fewer wells in Bangladesh than Tripura.

A few years ago, the authorities announced a plan to drill 55 exploratory wells in five years, only to give up the explanation in the end, for reasons best known to them.

No wonder Bangladesh has been categorised as one of the least-explored countries in the world. Only a third of the onshore area of Bangladesh has been explored for gas, and its success of discovering gas has been much higher than the global average.

The country has a vast offshore area for gas exploration, divided into 26 exploration blocks. In order to engage international oil companies in offshore exploration, in 2015, Petrobangla initiated a plan to engage an international service company to carry out seismic survey (multiclient survey) and to produce a database which would then be used to negotiate with foreign oil companies. A national expert committee was formed to select the best qualified service company for the job. But, for reasons not known, the selection was nullified.

After the previously selected company again qualified for a second round of selection, the whole process was mysteriously abandoned. Years of inaction led to stalled offshore explorations in Bangladesh. No seismic survey has been done, and the inaction continues to cripple the country.

Currently, only one consortium of Indian oil companies owned by state- owned O and Natural Gas Corporation, better known as ONGC, is carrying out offshore explorations  in Bangladesh, drilling only one well in seven years.


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