The Prime Minister’s Office (PMO) on Monday gave the go-ahead to a proposal for acquiring US oil giant Chevron’s assets in Bangladesh, worth an estimated $1.5 billion.
Chevron operates three gas fields in the country — the Bibiyana, Jalalabad and Moulvibazar gas fields and sells its production to state-owned Petrobangla. The gas fields contribute around 58 percent of the country’s total gas production.
To strike the best deal with Chevron, the PMO has also directed Petrobangla to appoint an international consultancy firm to evaluate the value of assets in three gas fields.
“We received the consent from Prime Minister Sheikh Hasina to buy all the shares in the three gas fields from Chevron,” State Minister for Power and Energy Nasrul Hamid told on Monday.
This will be Bangladesh’s second largest gas fields purchase since the acquisition of five gas fields from another oil giant Shell by Father of the Nation Bangabandhu Sheikh Mujibur Rahman in 1975.
Nasrul Hamid said three international financial institutions from India, China and Hong Kong have already shown interest to finance the government for taking over the assets from Chevron.
Petrobangla will submit expression of interest (EoI) soon to take over the fields, the state minister said.
The three gas fields have a total production capacity of 1550.6 mmcfd out of the country’s total gas production of 2669.9 mmcfd from 21 gas fields.
Operating since 1998, the Bibiyana gas field has a remaining gas reserve of around 3500 bcf (billion cubic feet). The gas reservoirs in Jalalabad and Moulvibazar are insignificant compared to Bibiyana. Petrobangla officials said the gas production from the three gas fields might start to deplete from 2018-2019. Chevron earlier proposed to maintain the production at the current scale in next two to three years.
Several Petrobangla officials said the government should assess the existing gas reserve in these gas fields and offer a price as per the current international market price.
A Chevron spokesperson earlier told, “We can confirm that Chevron has been in commercial discussions about our interest in Bangladesh. At this stage, no decision has been made to sell our interests. We will only proceed if we can realise attractive value for Chevron.”
According to an international media report, Chevron was divesting assets to counter an energy-price slump and is seeking around $2 billion from a sale of natural gas assets in Bangladesh.