Prof. Dr. Md. Hussain Monsur:
Bangladesh territory, being one of the largest deltas of the world, kicked off its indigenous oil and gas exploration efforts a century years back to cover its onshore and offshore areas. In 1908, the Indian Petroleum Prospecting Company first attempted exploration activities in Sitakund and conducted first exploration drilling there in 1910 with no commercial gas/oil discovery. During 1923-31, Burmah Oil Company (BOC) drilled two shallow wells in Patharia with no discovery. Thereafter, oil and gas exploration activities commenced in 1951 after promulgation of the then Pakistan Petroleum Act 1948. Some reputed international oil companies (IOCs) namely STANVAC of USA, PPL (a Burmah Oil Company affiliate), and world giant PSOC (Pakistan Shell Oil Company) took up concessions to carry out exploration till the end of the sixties. Various wells were drilled during that period and indigenous gas was first discovered in Haripur (Sylhet) in the year 1955 and then in Chhattak in the year 1959. PSOC was the most successful company and discovered the 5 major gas fields at Titas, Habiganj, Rashidpur, Kailashtila and Bakhrabad.
Immediately after independence of Bangladesh, the sovereign government under the leadership of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman established the constitutional ownership and rights of the nation to the sub-surface indigenous natural resources, including oil and gas. He promulgated the Bangladesh Industrial Enterprises (Nationalization) Order 1972 and the Bangladesh Petroleum Act-1974 and procured these five gas fields at a nominal price of 4.40 million Pound Sterling on August, 09, 1975, as well as nationalized its institutional assets and infrastructures. Only because of his farsighted visionary decision all these five gas fields and onward discovered gas fields including the gas fields under PSC (Production Sharing Contracts) with International Oil Companies (IOCs) gas fields are now producing and mitigating the lion share of our national gas producers. But, his energy sector’s efforts could not be continued and nourished with due priority thereafter.
Even until recently the past tenure of this government, the nation had been facing the prevailing and persisting energy crisis whereas energy is the prime mover of the economy. But in Bangladesh still indigenous natural gas is almost the mono supplier primary energy. As a result, natural gas supply to the power, industry, fertilizer, commercial, domestic and other sectors had been facing severe energy supply shortages and was anxiously looking for the gas abundance to meet their near and far future demands. The consequential awaiting impacts were such that if no enhanced gas reserve is ensured through exploration and development, the sustenance and further expansion of all these gas dependent sectors would either be stagnant or to be bound to find alternative primary energy sources. But, country’s indigenous alternative primary energy resources are still undeveloped. In such case, the option is left to importing primary energy sources like LNG and/or other liquid fuels. It is evident that these importing costs are much higher than the domestic gas price resulting to have negative impact on the gas consuming sectors and the economy of the country. Such resulting consequences of price hikes would be and shall have to be borne by the country’s end users who are the general public. The present government, while received the landslide victory in the national election of the year 2008, it inherited the status of proven gas reserve not enough to sustain long. Therefore, having so diversified challenges, the government then started its journey based on its Energy Security Vision 2021 as was declared in the Election Manifestos. During last tenure the government achieved remarkable progresses and as a result it has allayed the prevailing frustration in the power, industry, fertilizer, commercial, domestic and other sectors. As a result unprecedented progresses have been achieved over the last five years (2009-13) and have been being continuing even in the present tenure of the government.
• Gas production has been increased by 958 million cubic feet daily by drilling/work over/production increased up to May 2014.
• Due to production capacity depletion/decrease and/or suspension of some old producing wells on technical ground about 355 MMCFD gas was supplemented . Upon supplementation, net about 603 MMCFD gas production has been increased over the last five and a half years period.
• By FY 2015-16 overall gas demand in the country has been estimated to be 3800 million cubic feet per day. Although it may not be possible to meet this demand fully from the production of existing gas fields. However, tremendous programs have been taken up so that the as maximum as possible increasing gas demand could be met through indigenous natural gas production augmentation. Alongside, tremendous exploration efforts have been continuing with the view to increase gas reserves through new gas field discoveries. Upon successful completion of the presently undertaken gas field development Projects about 765 million cubic feet gas per day is expected to be added within the FY 2015-16.
Present Sector-Wise Gas Consumption
• Power (41%), Captive Power (17%), Fertilizer (7%), Industry & Tea-Estate (17%), CNG (5%), Domestic (12%) & Commercial (01%)
• Out of total 72 gas based power plants in the country, 36 power plants (31 grid and 5 non-grid) having total capacity of more than 2300 MW has been installed (newly added) during the last 5 years. As a result, presently 58% of total gas production could be consumed for Power and Captive Power generation. Now, power supply to the social life, industry, commercial and other sectors is much more comfortable and free from load shading than those of the days before last five and a half years’.
Gas Transmission Capacity Enhancement
Over the last five and a half years’ period construction of about 780 KM high pressure gas transmission pipe line inclusive of about 45 river crossings has been taken up among which more than 750 KM with respective river crossings have been laid out and a small portion is about to be completed within a very short time in different areas of the country. Among them some major pipelines like (1) Monohardi-Dhanua Elenga- East Bank of Jamuna (30” Dia, 51 Km), (2) Bonpara – Rajshahi (12”Dia, 53 Km), (3) Bakhrabad-Siddirganj (30”Dia, 60 Km), (4) Ashuganj- Bakharabad( 30”Dia, 58Km), (5) Hatikarul-Ishwardi-Beramara (30 “ Dia, 82 Km), (6) Bheramara- Khulna (20”Dia, 165 Km), and (7) Bibiyana-Dhanua (36”dia, 137 Km) will facilitate the upstream gas to the national grid, particularly gas supply to the south-south western, western and north western part of the country.
A compressor station has been installed at Muchai for boosting pressure of transmission pipe line. This has improved the pipe line pressure as well as enables the network to transmit gas from the upstream. Besides this, installation of two compressor stations at Ashuganj and Elenga will be completed soon.
Oil & Gas Exploration Activities
During the last five years 4510 line-Km (BAPEX-1445 and IOCs-3065 line- Km) 2-D seismic survey and 2163 sq km (BAPEX-1447 and IOC-716) 3-D seismic survey has been conducted. During this time 7 exploratory wells (BAPEX-4 and IOCs-3) have been drilled discovering 2 new gas fields (Sundalpur and Srikail). Presently BAPEX has under taken 3-D seismic survey over Sunetra (400 sq.km) and Shahbajpur (200 sq. km); and 2-D seismic survey project of 800 line kilometers which are progressing satisfactorily. Under Bidding Round 2008, a Production sharing contract (PSC) was signed with Conoco Philips for exploration of oil and gas two deep sea Blocks. Meanwhile they have already completed 2-D seismic survey over there and onward data processing and interpretation is now underway. Subject to the delineation of prospective structures, they will go for drilling during current FY. Under Offshore Bidding Round 2012, recently two Production Sharing Contracts have been signed with ONGC Videsh Ltd. and Oil India Ltd. for two shallow sea Blocks and with Santos and Kriss Energy for one Block. Moreover, evaluation of bid received for 3 deep sea blocks is going on.
The above mentioned progress/success to signing two PSCs for three shallow Blocks and receiving of three deep sea Blocks could have been progressed because of Resolution of Eastern Maritime Boundary. This ocean winning over Myanmar in its longstanding maritime dispute as established by the judgement of the International Tribunal for the Law of the Sea (ITLOS) on March 14, 2012 is the historic success of the present government led by Prime Minister Sheikh Hasina. Of course, this ITLOS verdict has widened the scope of oil & gas explores in the prevailing and won areas of the eastern maritime boundary of the Bay of Bengal. Similar win over dispute with India on the western maritime boundary of the Bay of Bengal is expected by June 2014 which is awaited for the verdict of the ‘Permanent Court of Arbitration’, Hague, Netherlands. It may be hoped that the verdict of the ITLOS court might have a positive impact on the remaining dispute over maritime boundary with India. However, the Government/Petrobangla has been putting it’s all out efforts to know the offshore Hydrocarbons prospects.
It may be mentioned here that the remaining proven and probable gas reserves so far discovered is not enough to meet the rapidly increasing gas demand. Even, long term continuation of meeting existing gas demand deserves further finding of new gas reserves. Exploration hunting both in land and offshore is a must to be in expeditious manner. As such BAPEX’s activities for the land territory and, because of prevailing limitations of BAPEX, both in terms of technology achievements and taking risks of funding huge finance for virgin and uncertain offshore discovery, IOCs for the offshore both Shallow and Deep Sea territory needs to be brought under special attentions. Parallel efforts is also needed to arrange and find out alternate primary energy resources including LNG import, indigenous coal resource, renewable energy etc. Government, thereby by Petrobangla, meanwhile has achieved remarkable progress. Offshore efforts have been mentioned above. Renewable energy issues are not under jurisdictions of Petrobangla. BAPEX’s Technical capacity Enhancement, Import of LNG, and Coal (Petrobangla’s part only) have been briefly described below:
Technical Capacity Enhancement of BAPEX
Three new rigs have been purchased to expand the drilling capacity of national company BAPEX. With these new rigs two new gas fields have been discovered. Additional manpower has been recruited and higher training has been given. Also, highly modernized and technologically sophisticated 3D seismic equipment has been procured with auxiliary data processing and interpretation hardware and software. Associated technical manpower has been being trained up at home and abroad. Also, they got on the job training while these were procured and operative over the native gas fields as a part of procurement contract for technology transfer to BAPEX. Alongside, they then worked as the crew members in the fields of data acquisition, processing and interpretation. Meanwhile they are much capable of using this technology as of their own.
Import of LNG
Expedited Power & Energy Supply Augmentation (special act) Act 2010, the government has taken necessary steps for installation of a Floating storage and Re-Gasification Unit (FSRU) at Moheshkhali on Built-Own Operate Transfer (BOOT) basis. This FSRU we have an LNG storage capacity of 13800 cubic meter which will be able to supply about 500 million cubic feet gas per day. Presently negotiation is in progress for finalizing contract with a qualified LNG terminal developer. It is expected that on completion of negotiation terminal use agreement will be signed soon and may commence supplying re-gasified LNG through this facilities the year 2016. A 30″ dia 91 km long high pressure gas transmission pipeline will be constructed to supply gas from Moheshkhali to Anwara for Chittagong Ring-Main areas.
Coal (Petrobangla’s Part)
Energy sector of Bangladesh is exceedingly depended on the limited gas reserve. Given the rising demand for fuel, it will be very difficult to meet this demand with only indigenous natural gas. About 79% of the power generation in the country is now gas based. Therefore, diversification of fuel has become indispensable. It has been recognized in vision 2021 that 53% of the power generation will be coal based by year 2021. A large portion of the coal to be needed for this power generation will come from domestic coal mines as mentioned in the vision 2021. Five coal fields in the country contain 3.3 billion metric tons of coal. Recently rate of coal production has been increased from Barapukuria significantly due to application of modern coal extracting method.
It may be mentioned here that, by nature of technology itself, indigenous oil and gas exploration and development activities are highly sophisticated, specialized equipment and technology oriented, time consuming, huge financial investment dependent. It is completely dependent on the entrapment and existence of oil and gas in the sub-surface reservoir, which is also high risk but high gain based job.
However, the sectoral achievement during last five years of the present government deserves to be compared to the achievement of the past government for the same period and the gas sector status at a glance is given below:
Present Gas Sector – At a Glance (as on April 2014)
• Total number of gas fields: 25 nos.
• Number of gas fields in production: 19
• Number of producing wells: 93
• Total recoverable (proven + probable) reserve: 27.04 TCF
• Total production of gas up to March 2014 : 11.86 TCF
• Total reserve remaining as on March 2014 : 15.18 TCF
• Highest daily gas production: 2,350.40 MMCFD (Petrobangla: 1,074.00 MMCFD i.e. 45.7% and IOCs under PSC: 1,276.40 MMCFD i.e. 54.3%) – as on 21-05-14.
• Total Customers (up to Feb 2014) : 25.80 lacs (Approx)
• Gas production has been increased by 958 MMCFD over the last five and a half years period. Due to production capacity depletion/decrease and/or suspension of some old producing wells on technical ground about 355 MMCFD gas was supplemented. Upon supplementation, net about 603 MMCFD gas production has been increased over that period.
• Out of total 72 gas fueled power plants in the country, 36 power plants (31 grid and 5 non-grid) having total capacity of more than 2300 MW has been installed (newly added) during the last 5 years. As a result, presently 58% of total gas production could be consumed for Power and Captive Power generation. Now, power supply to the social life, industry, commercial and other sectors is much more comfortable and free from load shading than those of the days before last five and a half years’.
Comparison of achievements in gas exploration & production activities between two elected governments’ tenures during (2002 – 2006) and (2009 – 2013):
Activities 2002-2006 2009-2013
(Previous Elected Govt.) (Immediate past tenure of the present Govt,)
New Structure 3 (BAPEX) 5 (BAPEX)
Exploration Well 2 (1 BAPEX, 1 IOC) 7 (BAPEX-4, IOC-3)
Gas Field Discovery 1 (IOC) Bangura 2 (BAPEX), Srikail & Sundalpur
Development Well 8 (4 BAPEX, 4 IOC) 22 ( BAPEX-6,(Gasprom-4, IOC-12)
Work over Well 4 (BAPEX) 17 ( BAPEX-14, IOC-3)
2-D Seismic (Line KM) 1643 (BAPEX) & 1037 ( IOC) 1445 Line KM (BAPEX) & 3065 Line KM ( IOC)
3-D Seismic (Sq. KM) 766 (IOC) 1447 (BAPEX) & 716 ( IOC)
Daily Gas Production (MMCFD) 1550 (average) 2332 (average)
Therefore, it appears that because of all out efforts rendered by the present government, such achievements in the indigenous oil and gas sector are remarkably better than those of the past elected governments achievements. In respect of sustenance of the sector, it will also appear that the present and future programs, as have been taken up and implemented by the present government, are found to be well planned to harmonize the pathway toward its declared Energy Security Vision 2021. Accordingly, since very beginning of the present government, it has been taking every single decision in the energy sector in a transparent manner for the welfare of the nation as well as for the advancement of the country. Being mandated, Petrobangla has been putting its best efforts for and on behalf of the government in regard to the indigenous oil and gas sector with the vision to provide energy for the sustainable development growth and maintain energy security of the country.
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Prof. Dr. Md. Hussain Monsur,
Chairman, Petrobangla.