Home ›› 24 Apr 2022 ›› Front
Bangladesh can drill 440 oil and gas wells with the money it spends on importing liquefied natural gas (LNG) in a year, experts say.
They say the country will again become self-sufficient in gas if it drills domestic wells instead of importing LNG.
Besides, they say it is risky to import LNG without drilling domestic wells. The gas shortage has already created volatility, with even gas price hikes and government subsidies failing to solve the crisis.
Badrul Imam, a geology professor at the University of Dhaka, told The Business Post the country’s energy policy states that four wells should be drilled every year but only 20 had been dug in the last 13 years.
“Bangladesh Petroleum Exploration and Production Company (Bapex) is now able to explore land areas for oil and gas. But the government is not giving Bapex exploration opportunities for some unknown reasons,” he said.
He also warned that 85 per cent of the domestic gas demand would have to be met through imports by 2030 if the current situation continued.
108 wells drilled in 114 years
Oil and gas exploration in Bengal and Assam started in 1908 during the British rule. Only 108 gas wells have been dug since then.
Bangladesh could not even dig a single well every year. But in just 46 years, Tripura, India’s most left-behind state, drilled 225 wells and got 11 gas fields.
Bapex says Bangladesh’s gas exploration success rate is higher than other countries. The discovery of a gas field by drilling 10 wells is considered the international standard while Bapex has been able to discover a gas field by drilling three on average.
A former managing director of Bapex told The Business Post there is a possibility of getting a huge amount of gas both in offshore and onshore areas via exploration.
He said Bapex had planned to drill 108 gas wells in land areas by 2021. “But domestic and foreign vested groups did not allow Bapex to implement the plan.”
Annual LNG import cost Tk 44,000 crore
Petrobangla says 78 per cent of the consumed gas in the country comes from domestic sources while imported LNG meets the rest of the demand.
In the current fiscal year, Petrobangla has estimated the total gas expenditure at Tk 51,000 crore. Of this, Tk 7,000 crore will be spent on domestic gas while Tk 44,000 crore will be used for LNG imports. However, Petrobangla does not have the money to buy LNG due to a lack of funds.
Professor Imam says Bapex spends less than Tk 100 crore on drilling a well and thus it is possible to dig 440 wells with the money Bangladesh spends on importing LNG in a year.
He suggested starting a massive oil and gas exploration drive in offshore and onshore areas right away, saying there should be no delay.
Petrobangla took money from GDF
Bangladesh Energy Regulatory Commission (BERC) founded the Gas Development Fund (GDF) in 2009 to speed up oil and gas exploration. Money in the fund comes from consumers’ gas bills.
BERC says more than Tk 13,000 crore has been deposited in the fund so far, but Petrobangla has taken most of the money to use in different profitable projects. Besides, Petrobangla last year paid the Energy and Mineral Resources Division Tk 3,000 crore from the GDF.
Abdul Jalil, chairman of BERC, reacted angrily to this on many occasions, saying the GDF money belongs to the people and could be spent only on oil and gas exploration.
Huge potential neglected
Petrobangla and Bapex officials agree with energy experts on the potential of oil and gas reserves in Bangladesh. Bapex says nine international oil companies (IOCs) worked to determine the potential of the country’s resources from 1981 to 2001.
Gustavson Associates of the US and Bangladesh’s Hydrocarbon Unit ran a survey in 2009. The survey report said there was potential to get up to 150 trillion cubic feet (TCF) of onshore gas.
Meanwhile, Bangladesh established its sovereign rights in the sea in 2014, but that could not be exercised. Myanmar and India are extracting a huge amount of gas from Bangladesh’s maritime boundaries.
Professor Imam said Bangladesh has ample seismic survey data as foreign companies that came in 1974 gave a lot of data. He said there was open access to this data even in the 90s.
“Overseas companies would come and analyse the data before starting their operations. But now the government has sealed the data.”
Alarming situation
Petrobangla says about 3,000 MMCFD gas used to be extracted till 2015-16, but that has now come down to 2,600 MMCFD.
Production from every well is declining. Of them, there is a big fear about Bibiyana, the largest gas field in the country. When only six wells in the field were closed on the first day of Ramadan this year, the country witnessed a massive gas shortage.
The Bibiyana field alone supplies 45 per cent of the gas used in the country. To fill the gas shortage, CNG stations are kept closed for five hours daily.
Also, gas supply to industries is suspended for four hours every day. Industry owners say this is causing severe disruptions to production.
Mohammad Tamim, pro-vice-chancellor of BRAC University, said the country could be in a serious crisis if production at Bibiyana suddenly declined.
Petrobangla Chairman Nazmul Ahsan told The Business Post there was no alternative to domestic gas exploration to address the crisis.
“To this end, the government has planned to drill 41 exploration wells and 45 development wells by 2041. By that year, the government has also planned a workover of 29 onshore wells.”
