Bangladesh finally started drilling for gas in its maritime areas on Wednesday.
The move could bring some relief from the severe gas crisis in the country, energy division officials said.
Energy experts said if gas is found in the sea, it would increase domestic production, leading to less dependence on expensive Liquefied Natural Gas (LNG).
When contacted, Md Anisur Rahman, senior secretary of the energy division in the Ministry of Energy, Power and Mineral Resources, told Bangladesh Post, ‘the drilling work of a well named Kanchan-1 has started since Wednesday. We have been waiting for a long time because of the pandemic situation. Finally, we were able to get started. It’s a big achievement for us. Once the drilling work of the well is completed, the exploration activities of Maitri-1, Pitli-1 will start in phases.’
‘However, it is difficult to say exactly how long it will take for this activity to end. Because it depends on the situation of the sea,’ he added.
Energy division officials said Indian state-owned ONGC Videsh Ltd, jointly with Oil India Ltd and Bangladesh Petroleum Exploration and Production Company Limited (Bapex) is drilling in the Bay of Bengal under Production Sharing Contracts (PSCs).
ONGC will drill at the SS-4 or Shallow Sea-4 block and Block SS-09 located offshore in the Bay of Bengal.
Block SS-04 and Block SS-09 are located in offshore Bengal Basin and cover an area of 7269 Sq. Km and 7026 Sq. Km. with water depth ranging from 0 to 100 meters. The two blocks were awarded to a consortium of ONGC Videsh Ltd and Oil India Ltd in the 2012 Bangladesh bid round, and the PSC was signed on February,17, 2014. ONGC Videsh with 45 percent PI is the operator and other partners are OIL with 45 percent PI and BAPEX with 10 percent PI.
As per the PSC contract obligation, contractors will survey and drill the block at their own cost, and they will meet 55 percent of their expenses each year from gas sales.
Petrobangla will own a minimum of 60 percent and a maximum of 85 percent of the recoverable gas, and a minimum of 70 percent and maximum 90 percent of the recoverable oil from the block.
Since the signing of the contract, the ONGC consortium has conducted a 5,500-line-km two-dimension or 2D seismic survey in the block.
It found 26 shallow and deep-sea blocks in Bangladesh's sea boundary. Out of that, only three blocks have been awarded for gas and oil exploration.
Energy expert professor Dr. Izaj Hossain told Bangladesh Post ‘the drilling work was supposed to start long ago. Although late, it is good news for us. However, it is necessary to drill at least 10 such wells in the Bay of Bengal every year. Then we get a clear idea there. Besides, a multi-client survey should be done as soon as possible to get an accurate idea of the amount of mineral resources in the whole ocean. This is very necessary for us.’
“To meet the domestic demand, Bangladesh is importing costly LNG from the international market. If the country finds sufficient reserves in the Bay, it can help overcome the current crisis and save a huge amount of money,” he said.
This is not the first time an international company has been awarded the right to explore gas and oil. Under the "Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010", a PSC was signed for deep-sea block DS-12 with South Korean oil and gas company POSCO DAEWOO Corporation in March 2017. The company, however, left Bangladesh without completing the work due to a dispute over gas prices.
Currently, the country’s natural gas output is hovering around 3,100 million cubic feet per day (mmcfd), of which 600-700 mmcfd is regasified imported LNG. However the gas demand is more than 4,000mmcf. The entire local production comes from onshore gas fields.
In March 2012, and July 2014, in historic victories at the UN Maritime Tribunal, Bangladesh got 111,000 square kilometres and 19,467 square kilometres from Myanmar and India respectively. Huge potentials of the blue economy emerged after the settlement of the maritime boundary with India and Myanmar, but there is no progress yet in exploring the marine resources. Neighbouring India and Myanmar have already begun exploration and extraction of natural gas and oil from their territorial waters.
Section 14 of the Sustainable Development Goals (SDGs) calls for the exploration and conservation of marine resources for sustainable development. According to experts, there is a huge opportunity in the deep sea. However, there is a great shortage of data on the marine economy of Bangladesh.
Bangladesh is the nineteenth largest natural gas producer in Asia. In Bangladesh, natural gas was discovered in a belt stretching from the country's northeast and east to the southeast and southern parts. Sangu is Bangladesh's first and only offshore gas-field, which was shut down for a long time.