Lack of investment hampers oil and gas search in sea

Rabiul Haque : The oil and gas search in the off shore has been suffering due to lack of investment. The government is trying to allure foreign investments by inviting international tender shortly.
Neighboring India achieved great success early this year by exploring for oil and gas in the deep sea. The country’s state-owned oil and gas exploration company Oil and Natural Gas Corporation Limited (ONGC) has discovered large reserves of fuel oil and gas in the deep sea at a distance of 35 km from the coast of the southern state of Andhra Pradesh.
According to the company, two phases of mining are currently completed. Work on the third phase is underway. When it is completed, 45 thousand barrels of fuel oil and 10 million cubic feet of gas can be extracted from here per day. In that case, the mine will contribute about 11 percent to India’s total daily oil production. And this contribution will be 15 percent to the total gas production of India.
The block is located in the Krishna-Godavari basin of the Bay of Bengal. It is now referred to in the country’s official documents as block KG-DWN-98/2. ONGC has faced technical challenges while drilling wells in the mine, ONGC said. In that case, the company had to use pipe-in-pipe technology to reach the gas level. The discovery of fuel oil in the Krishna-Godavari basin is considered very significant by the Indian media. According to them, if proper extraction starts from here, the country will save more than Rs 10000 crore annually on fuel oil import.
However, Myanmar has seen success before India in oil and gas exploration in the Bay of Bengal. In 2012, Myanmar settled its maritime boundary dispute with Bangladesh. Then in 2013, the country started extracting gas from here. The country has already extracted several trillion cubic feet of gas from Mia and Showe wells located near the sea border of Bangladesh. Apart from meeting their own needs, they are also exporting this gas to China.
14 years have passed since the settlement of Bangladesh’s maritime boundary with Myanmar. This boundary was settled with India 10 years ago. Bangladesh has not seen any success in extracting oil and gas in the deep sea during this long time. According to experts, Myanmar and India have increased their focus on deep sea energy exploration after the border settlement. Invested in various stages. As a result, foreign investment has also been received as required. And Bangladesh has wasted time in implementing the import-dependent energy policy. Despite the verbal expectation of foreign investment in deep sea oil and gas exploration within its borders, no effective initiatives have been seen in this regard. As a result, the energy resources of the vast marine areas of the country are still unexplored.
The country has 26 blocks in deep and shallow sea boundaries. In some of these blocks, contracts have been signed with foreign companies for gas exploration. These companies came forward with their own investments but later left the bloc. After that, the energy department chose import dependence to deal with the gas crisis for a long time.
However, the Energy Department says a total of six gas fields have been discovered in the country from 2009 to June 2023. During this time 132 gas wells have been dug. An initiative has been taken to dig 46 new gas wells. About 32,890 km of seismic survey have been done to discover new gas fields. About four thousand kilometers of new 2D and 3D seismic surveys are underway.
The Cabinet Committee on Economic Affairs approved the ‘Bangladesh Offshore Model Production Sharing Contract’ (PSC) in July last year for deep and shallow sea gas exploration in the country. Even after six months of approval, tenders have not been called yet. Gas exploration on land is still on a small scale.
Meanwhile, gas reserves and production discovered in the country are continuously decreasing. In the meantime, due to insufficient supply of gas, industrial, residential and power plants have suffered greatly. Due to lack of gas, industrial production is constantly being disrupted. Half capacity gas-based power plants are being installed. Despite importing liquefied natural gas (LNG) to deal with the situation, Petrobangla i.e. Energy Department is struggling to deal with the crisis.
LNG import into the country started in 2018 to deal with the gas supply crisis. LNG is currently being imported from Qatar and Oman under long-term contracts. Apart from this, Petrobangla is trying to solve the situation by buying LNG from the spot market by spending a huge amount of money.
According to the Energy Department, Petrobangla has spent Tk 1 lakh 25 thousand crore so far in importing LNG from the international market. The company is facing severe financial crisis while buying the product at high price. To deal with the situation, the company had to approach the gas development fund and sometimes international lenders.
Energy sector stakeholders blamed diversion of local level energy exploration and increase in import of LNG behind the gas sector in the country being burdened with debt. According to them, a huge amount of foreign exchange was spent in importing LNG through a diversion of exploration. Besides, the problems of the local gas sector have not been resolved but increased. Although the two neighboring countries of Bangladesh have achieved great success by investing in this matter.
Energy expert and geologist Prof. Badrul Imam told, “Myanmar got gas after the sea boundary was determined. Exporting gas. Now India is getting huge amount of fuel oil in deep sea. Also got gas. Between the two places, the water border of Bangladesh has a bright possibility of getting gas. But I can’t use this possibility. Because the continuity of search activities is very low in Bangladesh. So we should take our steps better to meet the energy crisis. If that is done, it will be possible to get out of the current situation with gas.
The investment in gas exploration, surveying, technical capacity and infrastructure in the country was not more than Tk 2 thousand crore. All its projects are land investments. According to the information of Petrobangla, in the financial year 2022-23, Petrobangla companies have invested Tk 1,818 crores in various projects. Majority of these investments in 30 projects are well renovation, workover, pipeline construction and survey activities.
Petrobangla has so far only conducted multi-client surveys in the initial phase of deep sea oil and gas exploration. In 2015, the joint venture company of Norwegian company TGS and France’s Schlumberger was selected for this work. Later, the tender was canceled due to unknown reasons. In March 2020, Petrobangla agreed to re-tender the same company. The company then surveyed an area of 8-10 km within the vast sea area of the country. The survey has heard about the strong possibility of getting fuel oil and gas, but the results have not been published yet.
ExxonMobil has offered Petrobangla to explore 15 oil and gas blocks offshore the country. No decision has been taken on that proposal yet.
Energy expert and BUET professor Tamim told, “We need big investment in deep sea oil and gas exploration. Along with that technical ability is also required. Neither could be done after demarcation of maritime boundaries with India and Myanmar. There was a big opportunity in gas exploration through negotiations with foreign oil and gas exploration companies. But no vigorous initiative was ever seen in such work. Bidding started once with Conco Phillips for oil and gas exploration but no deal was reached. If that was done, there might have been a big success.
The government has already approved PSC (Production Sharing Contract) for offshore oil and gas exploration. Petrobangla said that by increasing the share of gas, preparations can be made to invite tenders for oil and gas exploration to foreign companies under PSC.
A senior official of Petrobangla’s PSC department told on condition of anonymity, “The PSC bidding document for offshore oil and gas exploration has been approved. The government is yet to take a decision on the matter. But there is a strong possibility of calling for tenders by March. But ultimately the matter depends on the government’s decision.