Boost in gas production unlikely before 2025

The initiatives of Bangladesh Oil, Gas and Mineral Corporation, mostly known as Petrobangla, to explore oil and gas are progressing very slowly despite the ongoing energy crisis in the country due to a lack of funds.

Even though some steps have been taken to increase gas production, Petrobangla and its subsidiary Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) will likely not be able to improve the situation before 2025, according to officials.

Experts believe the global energy situation is unlikely to become better by 2026. In line with that forecast, even if Petrobangla and BAPEX are successful, Bangladesh will still face an extreme energy crisis in the next two and a half years.

However, Petrobangla does not know how to meet the country’s energy demand for the next decade. Even right now, all of Petrobangla’s plans are revolving around the import of liquefied natural gas (LNG).

Meanwhile, Bangladesh Power Development Board also plans to build 10 new LNG-fired high-capacity power plants, when there is a gas production-and-import shortage.

The prime minister’s energy adviser Dr Tawfiq-e-Elahi Chowdhury recently said that the country had no alternative to LNG import at the moment. But Petrobangla officials say they do not have the necessary infrastructure and the financial capacity to import high-priced LNG now.

Apart from the subsidy from the government, the state-run corporation has also been expecting loans from the private sector to tackle its financial crisis, say sources.

Even after 2030, the global political situation will still be unstable. So, the import-dependent plan of Petrobangla and Energy Division will be suicidal for the country’s energy future, said a former managing director of Rupantarita Prakritik Gas Company Limited (RPGCL) on condition of anonymity.

No money for exploration

Despite the energy crisis, Petrobangla and BAPEX are not going for large gas exploration initiatives due to the lack of funds, officials told The Business Post.

Importing LNG since 2018 has already depleted Petrobangla’s own funds. The state-owned corporation is currently importing LNG with subsidy from the Finance Division.

However, gas consumers have been paying a certain amount to Petrobangla that is meant to go to the Gas Development Fund (GDF), set up by Bangladesh Energy Regulatory Commission (BERC) in 2009, for oil and gas exploration. Tk 14,000 crore was deposited for the running year, according to Petrobangla’s accounts department.

In line with BERC regulation, GDF money should be given to BAPEX for oil and gas explorations only but Petrobangla has already taken almost all the money from the fund for LNG import.

“Petrobangla now has no option but to sit and watch the crisis get bigger and bigger. It takes at least Tk 100 crore to drill an exploration well, where will this money come from?” said an official of the company.

BERC Member (gas) Maqbul-E-Elahi Chowdhury said the money from GDF by law belongs to the people. “This money can only be used for exploration but the Finance Ministry broke the law and gave it to Petrobangla to buy LNG.”

Target 700 MMcf/d

However, according to Petrobangla officials, three state-run gas production companies have jointly set a target to increase production and pump 700 million cubic feet of gas per day (MMcf/d) to the national grid by 2025 following the workover and development of a number of wells.

Although the companies have been talking about taking initiatives to make this happen for a long time, there has been no major outcome yet.

Sylhet Gas Fields Limited (SGFL) Managing Director Mizanur Rahman told The Business Post, “We will workover 10 wells and 15 MMcf/d gas will be added by December. We [SGFL] expect to add 90 MMcf/d gas to the national grid in total by 2025.”

BAPEX Managing Director (MD) Mohammad Ali said, “By 2025, we will be able to produce almost the equal of LNG amount being imported. The workover, exploration and development of wells are underway in the existing fields.”

Besides, to increase gas explorations, a 3-D seismic survey is ongoing in Sylhet’s Zakiganj and a 2-D seismic survey from Feni to Cox’s Bazar coast is ongoing, Ali added.

However, a Petrobangla official claimed BAPEX and SGFL are exaggerating to extend their tenures.

No exploration in CHT

US-based oil, gas, and mining consulting firm Gustavson Associates conducted a study in 2010, which said the potential gas reserves in Bangladesh’s undiscovered fields are over 38 trillion cubic feet (Tcf) and probable reserves are around 63.19 Tcf.

In 2001, a joint survey conducted by the United States Geological Survey (USGS) and Petrobangla identified 32 Tcf of undiscovered gas reserves.

Energy experts say Petrobangla and BAPEX have not yet explored oil and gas in two-thirds of high potential areas around the country. The most potential area is the Chattogram Hill Tracts (CHT), where the Indo-Bangla Petroleum Company first started oil and gas exploration in 1908.

Petrobangla says exploration attempts in this hilly region were postponed multiple times in the past due to various reasons, including strategic, political and technical challenges.

Officials claimed several attempts were made to give the lease to international oil companies (IOC) but Petrobangla and BAPEX had to back out due to the heated condition of local politics.

A former Petrobangla director told The Business Post that the three hilly districts — Bandarban, Rangamati and Khagrachhari — have a high potential of having petroleum reserves but BAPEX is not capable of tackling the technical challenges.

Due to that, Petrobangla had taken several initiatives to give the job to China’s Sinopec Group but was forced to withdraw later because of the unstable political situation in the hills, he said.

BAPEX MD Ali said five companies have shown interest after an international tender for oil and gas exploration in CHT was floated. “A decision will be made very soon after verifications.”

Meanwhile, former Petrobangla chairman Dr Hossain Mansur claimed the gas reserve potentiality in that region is nearly zero and extracting what is there will not be commercially profitable.

But energy expert and Dhaka University’s retired geology professor Dr Badrul Imam strongly disagrees.

He said the deltaic zones around the world, such as the Niger Delta, Indonesian Delta, the US Gulf coast, etc., have great oil and gas potential, Bangladesh is also located in such a zone and all international surveys have said the country has a lot of gas reserves.

“If someone says there is no gas without exploration, it is misleading,” added the mining expert.