Bangladesh fails to tap sea resources
Mahfuja Mukul: Despite having huge potentials of hydrocarbon in the Bay of Bengal, Bangladesh has not been able to tape the opportunity by exploring the oil and gas from the sea. Bangladesh lags behind in finding out the oil-gas in sea comparing to India and Myanmar. And since last 50 years, there is no outcome from the sea blocks for Bangladesh.
There are a total of 26 oil and gas blocks in the country’s sea limits. Among them, 11 in the shallow part and 15 in the deep sea. After the settlement of the boundary dispute, India and Myanmar quickly took effective measures to explore for oil and gas in their parts of the Bay of Bengal. Bangladesh lags behind in this regard. We do not have the ability to search for oil and gas in the sea. There are various complications in taking the cooperation of foreign companies.
As a result, even though there is oil and gas in the Bay of Bengal, Bangladesh is not able to enjoy it.
According to Petrobangla, US-based oil and gas company Conoco Phillips taken lease the deep-sea DS-10 and DS-11 blocks in the 2008 tender process. After two years of exploration work, the company abandoned block two in 2014 due to disagreements over gas price hikes.
In another international tender called in December 2012, Conoco and State Well jointly submitted bids for the three deep-sea blocks DS-12, DS-16 and DS-21. Later Conoco pulled out and the blocks could not be leased. Even if oil and gas are discovered in the sea, it takes at least five to six years to reap the benefits. Bangladesh could have benefited from the oil and gas of the Bay of Bengal in the present transitional period if the two blocks had not been released in 2014.
A contract was signed with Conoco Phillips for blocks DS-10 and 11 for deep-sea oil and gas exploration in June 2011 prior to the sea conquest with Myanmar. According to the contract, 5800 line kilometers of 2D survey was done in two blocks. At that time, Conoco Phillips proposed a gas price hike in the contract. They left Block two in 2014 as the issue was not acceptable to the government.
After sea conquest with Myanmar in 2012, under Bangladesh Offshore Bidding Round (tender) 2012, ONGC Vides Ltd. signed two contracts with Oil India Ltd. in February 2014 for blocks SS 04 and 09. 5000-line km 2D survey was done in both the blocks. After the survey they drilled a well in Block SS 04 in March 2022. But no gas was found in the well.
ONGC will drill two more wells in Block SS-04 and 09 by February 2023. Under the same bidding round, a contract was signed with Santos in March 2014 for the shallow-water block SS-11. 3 thousand 100-line kilometers 2D survey was done in this block. Despite the block’s potential, Santos exited the block in 2020 as it divested its business from Asia.
After winning the maritime boundary with India in 2016, another agreement was signed with POSCO Daewoo for Block DS-12 in March 2017. 3500-line kilometers 2D survey was done in this block. They also left the bloc in 2020 as the terms of the agreement were not favorable to their business. International bids were to be invited under the offshore model PSC (Production Sharing Contract)-2019 for oil and gas exploration through the new bidding round, but due to the Covid-19 pandemic situation, it was not possible.
As the scenario of this sector has changed internationally due to Covid, a consultancy firm has been appointed in June 2022 to modernize the offshore model PSC (Production Sharing Contract)-2019 to attract international oil companies to invest. The new offshore model PSC will be finalized after getting the consultant’s opinion. Petrobangla said that a new offshore bid round (tender) will be called.
Although India-Myanmar is ahead, why is Bangladesh lagging behind in oil and gas exploration in the Bay of Bengal? In response to such a question, a senior official of Petrobangla told that Petrobangla is not sitting still. Signed an agreement with Conoco Phillips for blocks DS-10 and 11 for deep sea oil and gas exploration before sea conquest with Myanmar. According to the agreement, 5800-line kilometers 2D survey is done in both blocks. At that time, Conoco Phillips proposed a gas price hike in the contract.
They left Block two in 2014 as the issue was not acceptable to the government. If not for this, Bangladesh could have used the oil and gas of the Bay of Bengal. Because it takes five to six years to extract oil and gas from a block after exploration. In fact, the immense potential of the Bay of Bengal should be exploited through a foreign company. Therefore, to make a contract with a foreign company, both parties have to make concessions. If not, it will not happen.
He also said, we will start working again with new enthusiasm. A new offshore bid round (tender) will be called.
Settlement of maritime boundary disputes with Myanmar and India in 2012 and 2014 established Bangladesh’s right to all fauna and flora under the seabed up to 354 nautical miles from the Chittagong coast. India and Myanmar have made significant progress in extracting gas from the sea, but Bangladesh has not. But most of the oil and gas blocks in the Bay of Bengal are within the borders of Bangladesh.
Bangladesh Oceanographic Research Institute Director General Syed Mahmud Belal Haider told, “We don’t have the ships needed for oil and gas exploration in the Bay of Bengal. We explore the Bay of Bengal in a rented dinghy. Can go maximum 20 km foreign companies rely on oil and gas exploration. Dinghy boats can only be operated offshore.
You have to come back the same day. As a result, accurate information is not available. We will buy a ship for that. It is called an ‘ocean sample collecting’ boat. Through this, you can go 100 km into the sea. At the same time, data can be collected from 10-12 days deep in the sea. As a result, I can search for the correct information.
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