Chevron Corporation, the US oil giant has finally declared that it is going to sell its assets in Bangladesh to a Chinese company named Himalaya Energy Company Limited. Therefore, if it gets finalized, the top 3 gas fields of the country will be maintained by the Chinese.
Chevron Corp on Monday announced that, its wholly-owned subsidiary, Chevron Global Ventures Ltd., has entered into an agreement to sell the shares of its wholly-owned indirect subsidiaries operating in Bangladesh to Himalaya Energy Co. Ltd.
According to a few international news portals, Chevron started wrapping up its business from around October of the last year in Bangladesh after the militant attack of Holey Artisan Bakery at the capital. However, Chevron then informed Energybangla that, it was on commercial discussion with a Chinese state-owned firm named ZhenHua Oil. The spokesman of Zhenhua Oil, Zhang Xiaodi then also informed the international news agency Reuters that, the Chevron’s claim on commercial discussion with Zhenhua was right. However, Bangladesh’s state-run Petrobangla, who is also a partner of the gas fields that Chevron is attempting to sell out has not yet given any reaction regarding this agreement.
Chevron Bangladesh’s external communications manager Shaikh Jahidur Rahman informed Energy Bangla that, Petrobangla is a valued partner of Chevron in Bangladesh and Chevron informed the Petrobangla about the progress and developments of the selling procedure of their assets in Bangladesh in due time.
Meanwhile, the state minister for Power, Energy and Mineral Resources Nasrul Hamid said to Reuters that, the government is still assessing the viability of the assets that Chevron is offering to sell out to determine whether buying chevron resources will be beneficial for Bangladesh. The British energy consulting firm named Wood Mackenzie is conducting the assessment; the government can’t take any snap decision on buying the assets of Chevron before getting the assessment report, he said. “So, we need some time as we have not got the assessment report yet and we hope Chevron will consider it”, he added.
Chevron, the second-largest oil company in the United States and the world’s fourth-largest publicly traded oil company is also one of the largest foreign investors in Bangladesh’s energy sector. The company has been operating three gas fields in this country and solely responsible for about half of the country’s total gas production. Himalaya is owned by a consortium comprising state-owned China ZhenHua Oil and investment firm CNIC Corp it is going to buy the three gas fields of Bibiyana, Jalalabad and Moulavi Bazar which jointly produces about half of the country’s total gas production.
Chevron currently sells all their production to Petrobangla under the Production Sharing Contract (PSC). According to the PSC Chevron has right to sell out its share to any international company but it requires an approval from Petrobangla as well. However, the government couldn’t progress much in buying the assets of Chevron after all Petrobangla should get priority in buying according to the terms.
Earlier on October of the last year, Chevron informed that it would sell out its assets by 2017 roughly worth $10 billion in Bangladesh, Indonesia and Thailand to cover the losses that were incurred by the global slump in energy prices in the recent years. The slump in global oil price caused a record loss in July, 2016 since the year 2001.
According to the sources of Petrobangla, Chevron sold gas worth 4 thousand and 600 crore taka to Petrobangla in the fiscal year of 2014-15, which dropped to 4 thousand crore taka in the fiscal year of 2015-16. The production of Chevron has dropped in the last 2 consecutive years. Chevron also lessened its investment by 19 percent which worth around $220.89 million in these three gas fields in the last 2 years.
Bangladesh and China are already on the way to jointly install a coal-fired power plant having a capacity of 1,320 MW. If china can manage to buy the assets of Chevron in Bangladesh at last, it will be one of the biggest investment of China in Bangladesh’s energy sector after the Chinese President’s visit to Bangladesh. It suggests that, China is likely to be a big partner of the country’s energy and power sector.