Search for hydrocarbon moves at a snail’s pace
Shahiduzzaman Khan
Bangladesh’s hydrocarbon reserve is depleting fast. It is likely to face acute energy crisis after 2015 if no new reserve is found immediately. The situation has gone to such an extent that all concerned appear to have accepted the likely devastating effect of the gas supply crunch on the country’s economy as a fait accompli.
According to a conservative estimate, the national demand will be around 50,000 mmcf by 2020, if the target of 7.0 per cent growth in GDP is to be met. For that reason, around 24 trillion cubic feet (TCF) hydrocarbon resources need to be discovered by 2025. Very recently Petrobangla said that supplying gas to the industries was creating a gas crisis of around 250 mmcf in the country. Even after gas rationing in the CNG filling stations and the fertilizer factories, the situation is not improving.
With the current reserve being at around 15 TCF in the country, the national demand can be met until 2025 without providing it to the industries. However, if the industries continue to be supplied with gas, half of this stock will reportedly be finished within four years. In fact, the entire reserve of gas will be entirely consumed by 2019 if it goes on like this. The situation may aggravate further as gas demand is rising while production remains the same.
It’s a fact that the country has failed to undertake new gas exploration drive over the last couple of years, except taking up some initiatives to increase gas production from the existing fields on a fast tract basis. On the contrary, the government is serious about power sector and has already awarded contracts to generate more than 2,500 megawatts (mw) electricity. The search for discovering hydrocarbon by Petrobangla and its subsidiary organisations has been moving at a snail’s pace since long.
The government is now importing Liquefied Natural Gas (LNG) from Qatar to meet the gas supply shortage. A project to build an LNG terminal has also been taken to receive LNG containers and transmit gas to the national pipeline. It is scheduled to be completed by next year. Yet all indications suggest that 100-kilometre pipeline to transmit the processed gas to the national grid would not be ready within the stipulated timeframe.
Indeed gas crisis is creating a ripple effect on the country’s economy, as hundreds of factories could not go into operation and many power plants still remain idle, hindering its industrial growth. Fertiliser production is being jeopardised as many producing units are failing to operate due to gas supply crunch. Compressed National Gas (CNG) filling stations are being forced to remain closed for four hours daily to divert gas to such factories. Six-hour shutdown will be in force during the month of Ramadan. Still the situation is unlikely to improve.
Lack of adequate pipelines to transmit the available gas is a stumbling block to streamlining its supply countrywide. Early last year, some contracts were reportedly awarded to transmit gas to the country’s gas-deprived western zone. Until now, construction of these pipelines is going on at a snail’s pace. It was scheduled to be completed by now.
The country signed an agreement with US oil giant ConocoPhillips for offshore hydrocarbon exploration. Another IOC, Santos, has started work to drill three wells in the Bay from October next. It has awarded Seadrill a contract for jack-up drilling rig ‘offshore resolute,’ to conduct drilling programme in the offshore gas structures. There is also a move to award several deep-sea blocks and a shallow water block to foreign oil companies. But the process of awarding the blocks is yet to gain momentum.
Geologists believe that the Bangladesh territory in the Bay holds the biggest oil and gas prospect. Apparently, the country is now exposed to a regional oil and gas politics. However, according to foreign ministry source, the maritime boundary is expected to be fixed by next year. Country’s move to mark its maritime boundary has so far been limited to ‘plans’ to take expert help from the US, the UK and Australia for the job.
Both Myanmar and India began oil and gas exploration in their offshore zones in the Bay several years ago and both succeeded in discovering large gas fields. Bangladesh remains miles away in the race and failed to find its deep sea emerging as a new frontier. Nevertheless, fixing maritime boundary is a tricky matter as the coasts of India, Bangladesh and Myanmar follow a curve, which implies overlapping of territory. As per the international practice in such a case, the neighbours should inform each other and reach a mutual understanding before exploring such areas.
More than 97 per cent of the country’s total gas output comes from the onshore gas fields while only 3.0 per cent comes from the lone offshore gas field Sangu. Production in Sangu is depleting fast. International Oil Companies (IOCs) were awarded 12 hydrocarbon blocks, both offshore and onshore, since gas exploration began in the country in late ’90s. But they now hold only six blocks after recently giving up rights on the rest.
All IOCs operating in Bangladesh sell their gas output to Petrobangla, which later sells it to public and private companies through state-owned distribution firms. Recently Santos won the right to sell gas to private companies. On the ground of poor gas reserves in Sangu and lower price, it got the rights to sell gas directly to the private parties. Allowing such right to the IOCs may prove disastrous if all IOCs demand similar facilities. The activities of BAPEX and its subsidiary organisations may be severely constrained then. However, as most of the renowned IOCs are reluctant to take part in hydrocarbon bidding at a large scale, the government has little option to go for alternative in this connection.
Unless BAPEX makes major stride for exploring gas in Netrokona-Sunamganj belt early next year, chances of overcoming the gas crisis within 2014 are very slim, according to experts. Magnama and Hatiya structures have reportedly a large presence of gas which was evident after conducting a 3D survey there. Gas exploration in most of the country’s 46 onshore blocks remained frozen since 1998 after the High Court injunctions.
At a recent roundtable, the energy adviser was upbeat about tapping the coal and gas resources in the country. Besides, he said the government is planning to acquire some coal and gas fields abroad to ensure long-term energy security. As the country is planning to generate 30,000 to 50,000 megawatts of power in the next two decades, the government is contemplating acquiring assets in other countries.
There is no denying that Bangladesh reels under severe energy crisis. The present government has already passed its half of its term. Many gigantic tasks have to be accomplished during the rest of the period. When the country’s domestic energy resources are yet to be tapped to their full potentials, how far is it logical to go for exploiting energy resources abroad? It is really unwise to acquire gas and coal fields abroad without fully exploiting the country’s own underground resources.
The situation demands extensive exploration on both onshore and offshore blocks in the wake of soaring gas crunch, caused mainly by lack of drilling in prospective fields. Harnessing gas along with power is of crucial importance at this critical time of huge energy crunch.
https://www.thefinancialexpress-bd.com/more.php?news_id=143067&date=2011-07-17
