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Bangladesh - 4 weeks ago

Petrobangla invests poor to explore gas

Zarif Mahmud: In 23 years, the investment of state-owned companies in exploration and drilling of gas wells is only Tk 7 thousand crores.
The three state-owned gas companies drilled a total of 59 gas wells in the country during the 23 years from 2000 to 2023 and has invested Tk 6,832 crores. Gas has been found in only 50 percent of the exploratory wells drilled in this limited sense. While foreign oil and gas exploration companies (IOCs) investing nine times more than that, the success rate is only 25 percent. The issue has come up in Petrobangla’s data on the production, supply situation, gas well drilling and future plans of the gas sector.
Bangladesh Petroleum Exploration and Production Company Limited (Bapex), Bangladesh Gas Fields Company Limited (BGFCL) and Sylhet Gas Fields Limited (SGFL) are extracting gas in the country. A total of 18 exploratory gas wells have been drilled under NOC in about two years. Gas has been found in nine of them. In this case, the success rate is 50 percent. On the other hand, foreign oil and gas exploration companies drilled a total of eight exploratory wells in the country during the same period. Only two of them got gas.
Accordingly, the success rate of foreign companies is half that of state-owned companies, 25 percent.
Those related to the energy sector say that the investment made by the state-owned companies to increase the gas reserves and supply in the country is negligible. However, in the last six years, at least Tk 1 lakh 20 thousand crore have been spent on the import of liquefied natural gas (LNG). At least half of this huge LNG import expenditure would have been better spent on increasing gas exploration and production in the country.
According to the financial report of Petrobangla, in the financial year 2018-19, the company spent Tk 11 thousand 812 crore 52 lakhs on LNG import including regasification charges. Petrobangla imported a total of 66 cargoes in the country in the financial year 2019-20. The company has to spentTk 17 thousand 502 crore 62 lakh to import these LNG cargoes. In the financial year 2020-21, against the import of 72 long-term cargoes, Petrobangla spent more than Tk 17,500 crore. And in the fiscal year 2021-22, Petrobangla’s expenditure on importing energy products is about Tk 39 thousand crores. In the financial year 2022-23, the cost to import the product is about Tk 35 thousand crore.
A total of 59 gas wells have been drilled in the last 23 years under three state-owned companies. Petrobangla i.e. Energy department invested Tk 6,832 crore in drilling this amount of wells. And the sales of the gas obtained by drilling the wells have generated a total income of Tk 33,288 crores. The extracting companies have made a profit of 387 percent in this sector, this is what has emerged in the data of Petrobangla. On the other hand, at the same time, IOC has invested Tk 56,545 crores and drilled a total of 54 gas wells. By selling the gas obtained from there, it earned Tk 1 lakh 58 thousand 961 crores in the relevant period.
Energy expert and geologist Prof. Badrul Imam said, “We have been saying for a long time to increase investment in gas exploration without increasing import dependence in the gas sector. The amount of investment made through state-owned companies in the country has been met with success. But over the past two decades, not enough wells have been drilled to increase supply to the gas sector. If that was done, there was a strong possibility of discovering larger reserves of gas. The activity and planning that is now seen in gas exploration, it was necessary to do it much earlier.
The amount of investment made in the gas sector in the last two decades, the success of which has also come out in the data of Petrobangla. A total of seven gas fields were discovered in the country during the corresponding period, six of which were discovered by the state-owned oil and gas exploration company BAPEX. Another gas field was discovered by foreign company Tallo. A total of 1,854 BCF gas reserves have been found in these gas fields. Among the gas fields discovered by BAPEX was the discovery of Sundalpur in 2011, where Petrobangla estimates 35 billion cubic feet (Bcf) of gas reserves. Srikail gas field was discovered in 2012, with gas reserves of 161 BCF; Bhola North-1 was discovered in 2018, with gas reserves of 435 bcf; Jokiganj gas field was discovered in 2021, 53 Bcf of gas was found. The Elisha gas field was recently discovered in the middle of last year, where gas reserves are found to be 140 Bcf. Besides, the foreign company Tallow discovered the Bangura gas field, where 714 Bcf of gas reserves are estimated.
Bapex has drilled most of the wells under local gas extraction companies. However, there is a long-standing criticism of this government agency for not giving sufficient investment, keeping it under the pretext of technical and skilled manpower shortage, and importing LNG without exploring and exploiting local gas.
When asked, the former managing director of Bapex, Mortuza Ahmad Farooq Chishti told, “It is true that the government was averse to local gas exploration for a long time. But there are many reasons behind it. At one time there was a shortage of foreign currency in drilling gas wells. World Bank and Asian Development Bank (ADB) money had to be depended on then. Besides, the technical capacity of BAPEX was not sufficient. At the same time, it was a challenge for the gas extraction companies to keep efficient manpower due to the low allocation for well drilling projects.
The former managing director of Bapex also said, ‘It is not enough to invest, Bapex has no experience of working in remote and sea areas except on land. In addition, despite the success of the gas wells in BAPEX activities, gas reserves have been found to be less. This reality must also be accepted. Besides, there was an attempt to fix the gas supply management by importing LNG. That’s why it was a challenge to get enough money to dig enough wells in the financial crisis to import gas.
Petrobangla is continuing gas exploration and extraction activities with the local company Bapex to increase gas supply in the country. At present 46 wells are being drilled. The company has taken the initiative to dig the remaining 100 wells. Petrobangla will dig these 100 wells by 2028. However, in the wells that are currently being drilled and the wells that will be drilled in the future, foreign companies will work alongside Bapex. At present, foreign companies will work in partnership with local companies on land. Meanwhile, foreign companies are in the process of signing contracts to drill various onshore wells.
When asked if there is any plan to increase the investment of state-owned companies in drilling gas wells, a top official of Petrobangla told on the condition of anonymity, “The state-owned company Bapex is being used to the maximum extent in drilling gas wells in the country.” Apart from this, foreign companies will also work on drilling wells. Because of the gap between demand and supply of gas, the supply needs to be increased quickly. BAPEX has been assigned to drill wells. But maybe more or less happened.

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