Uninterrupted gas supply as a main and proven source of primary energy has become critical in line with new era of paradigm economic shift. Bangladesh is reported to have 27 TCF natural gas reserve of which proven reserve is 18 TCF and remaining is probable. This state of gas reserve and compounded demand of natural gas in Bangladesh underpinned by widespread and cross-sectional use alarms that Bangladesh is heading towards gas depletion and plunging into sever primary energy shortfall. About 2380 mmcfd gas is explored against the need of 3800 mmcfd gas every day. Daily shortage of gas production in Bangladesh was 600 mmcfd against estimated need of 3300 mmcfd gas and demand has gone up to 3800 mmcfd leading demand and supply disparity.Gas exploration status quo of Bangladesh
If BAPEX can be improved technologically, the organisation can be extended to coal exploration later
AKM Asaduzzaman Patwary
Uninterrupted gas supply as a main and proven source of primary energy has become critical in line with new era of paradigm economic shift. Bangladesh is reported to have 27 TCF natural gas reserve of which proven reserve is 18 TCF and remaining is probable. This state of gas reserve and compounded demand of natural gas in Bangladesh underpinned by widespread and cross-sectional use alarms that Bangladesh is heading towards gas depletion and plunging into sever primary energy shortfall. About 2380 mmcfd gas is explored against the need of 3800 mmcfd gas every day. Daily shortage of gas production in Bangladesh was 600 mmcfd against estimated need of 3300 mmcfd gas and demand has gone up to 3800 mmcfd leading demand and supply disparity.
Currently 21 gas fields are operational nationwide which are meeting around 63 percent of estimated natural gas need. Of the total exploration, IoCs contribute around 1700 mmcfd gas and remaining by our local companies. Upon resolving the maritime boundary dispute, Bangladesh sketched the deep water map into 28 blocs to facilitate the exploration work. The largest gas field Bibiyana is producing 1200 mmcfd and lowest is in Sylhet 8 mmcfd.
BAPEX, the forefront subsidiary company of PETROBANGLA, Bangladesh gas field and Sylhet gas field do upstrem exploration financed by PETROBANGLA. Though BAPEX has been operational almost for three decades but is yet to be well-equipped to operate. PETROBANGLA usually allocates bloc and budget. BAPEX has now seven gas fields ranging 20 to 60 mmcfd production. If these work well, the grid can be enriched by another 765 mmcfd gas. BAPEX has asked for 10 Wells on off and on shore to PETROBANGLA. PETROBANGLA has not endorsed as BPAEX has not got any proven track record of drill on its own and Salta Sylhet drilling has given unpleasant experience to Petrobangala earlier. Despite various limitations, BAPEX planned to drill about 53 gas fields, conduct 12800 KM line of 2D Survey and 2840 KM 3D survey by the year 2021.
Countrys first offshore gas field at Sangu with 10 wells located 35 km off the coast in the Bay of Bengal was one of the largest discoveries in the 1990s with Cairn, the first IoC, to start operation in Bangladesh. The Sangu produced excess of 450 bcf since production in 1998 Sangu could produce 160mmcft per day. Conoco Philips has done exploration for a certain period and left due to negotiation failure and inadequate reserve in their given 4 blocs. Now Tullow produces around 100 mmcmd.
Production Sharing Contract (PSC) of Statoil and PETROBANGLA for condensate and hydrocarbon exploration in DS 12,16 and 21 did not work out due to demand of 2 percent premium on per mmbtu gas sale rather PETROBANGLA allocated DS11, DS12, 16 nearby Myanmar to Daewoo for 2D and 3D seismic survey and exploration by 2018 at the rate of 6.5 per mmbtu. And, Australian Santos has been allocated in association with BAPEX to explore in Magnama with likely reserve of 1.5 TCF.
As experience of low and depleting reserve of gas out of previous survey by IOCs has been widespread, the IOCs are negotiating higher tariff and price premium while dealing GoB. In pursuance of reserve enrichment, meanwhile Government High Official referred 100 wells may be drilled by the year 2020.
BAPEX has now 22 wells in operational and developmental stage of which 16 are managed by the IOCs. 7 new wells have been allocated. BAPEX has so far conducted 1445 KM of 2D seismic survey, 3065 KM of 2D survey with IOCs. 2163 KM of 3D survey in collaboration with IOCs and maintains production of 2323 mmcfd gas. (petrobangla 2014)
The graph of gas production from 20 wells in the given table is as a whole frustrating with limited aspiration for improved production.
Production capacity: BAPEX has got the capacity of 2D seismic survey but to conduct the 3D survey, BAPEX is procuring equipments and equipping technical experts for 3D Survey in future. 3D survey so far has been conducted by BAPEX in joint venture with IOCs. PETROBANGLA allocates budget for exploration and determines the block allocation subsequently all exploring companies like BAPEX, Bangladesh gas field, Sylhet gas field do not usually get fund for geological survey except seismic survey. IOC dependence is escalating which is putting BAPEX and other local exploring companies backseat in capacity building.
Financing: Gas development fund (GDF) is operated by the PETROBANGLA even BERC has got no oversight on the BAPEX activities. ADP in Fiscal Year budget has got no allocation for geological survey, Well drill and gas field development. BAPEX is required to borrow from GDF and pay back with interest to PETROBANGLA. BAPEX sells per mmbtu gas at the cost of BDT.25 which results BAPEX into a losing concern. Deep water exploration is very expensive as average deepwater drilling costs more than $100 million which is in most instances unaffordable for Bangladesh and IOCs loose interest consequently.
Potential way outs may improve the position of exploration :
Amidst these challenges, BAPEX needs to be made independent from PETROBANGLA but could be run by the Ministry of energy and mineral resources; Fiscal budget allocation needs to be ensured in line with demand of gas and functional engagement, geological survey to support exploration; Technical know-how and skilled Human resource development within focused timeline is essential in collaboration with foreign training agencies to reduce external dependence in long run; Tariff of Gas sold to PETROBANGLA needs to be risen from TK 25 to TK 100 as Distribution Companies charge maximum TK 330 as tariff for same amount of gas users inflating wealth of distribution companies leaving BAPEX weak; PETROBANGLA held Gas Development fund access needs to be zero cost until making the BAPEX financially capable and independent; energy bond can be issued for large financing of BAPEX, BAPEX needs to be self- sustained to bid and lease foreign gas fields for exploration in future; Deep water blocks allocation bidding need to be expedited to engage renowned explorers; PSC needs to be a win-win deal balancing both party interests rather than being unilateral.
Aforesaid 100 new wells drill plan of GoB by 2020 had no visible effort so far. Bangladesh needs to formulate a long-term energy policy backed by inclusive and focused gas exploration policy to ease the exploration activities.
The aforementioned scenario of gas exploration is not symbolizing optimism for gas supply and complacence for diverse users of gas in near future and much talked alternative energy LNG is apparently unfeasible solution for Bangladesh in long run. If BAPEX could technologically improve, BAPEX can be extended to Coal exploration later. In crucial context of slump energy exploration, we can look into Resource Efficient and Cleaner Production (RECP) tool in cross-section of manufacturing business to reduce energy inefficiency alongside support intensive exploration engagement to steer our industry spree led socioeconomic development and targeted inclusive economic vision-being a developed economy by the year 2041.
The writer is a Research Fellow, RD, DCCI
