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No progress in oil, gas exploration in Bay


Published : 14 Aug 2022 08:54 PM | Updated : 14 Aug 2022 08:54 PM

Despite having possibilities of finding huge reserves of oil and gas in the Bay of Bengal, the government has not yet taken any initiative to explore for the underground fossil fuel.

It is known that India and Myanmar have both explored for gas and oil reserves in their respective sea areas adjacent to Bangladesh maritime borders. Experts believe that as both the neighboring countries went ahead in exploring for underground fuels and subsequently been extracting oil and gas, there are strong potentials in finding similar reserves in the Bay as well.

To meet the domestic demand, Bangladesh is importing costly LNG (Liquefied Natural Gas) from the international market. Its own gas reserves are also declining. If the country finds a sufficient amount of oil and gas reserves in the Bay, it can help overcome the current crisis and save a huge amount of money, expert said.

Sources said that Prime Minister Sheikh Hasina has repeatedly pushed for offshore oil and gas exploration, but due to bureaucratic complications, results are not satisfactory.

The price of oil and gas in the world market is increasing day by day. Even with rationing-load-shedding, it has become difficult to manage the power situation in the country. LNG has to be imported at a much higher price to meet the shortfall. Because the demand for gas is increasing; But the production in the country is decreasing.

The current government undertook a survey of the sea eight years ago. However, the programme has not started as of now. A contract with a foreign company was signed in 2020 after five years. Two years have passed, but no significant survey work was done in the Bay.

Due to poor response to international tenders for oil and gas exploration in the Bay of Bengal, the government decided to conduct a multi-client survey of the entire maritime area to get an accurate idea of the total fuel reserve in the Bay, energy division officials said.

In 2015, Petrobangla invited international tenders for this survey. Five companies had submitted their proposals. TGS- Schlumberger Consortium were selected as eligible in the tender evaluation. 

Petrobangla then finalized the proposal and sent it to the Energy Division to seek the approval of the Cabinet Committee for the contract. But the process was abruptly canceled and Petrobangla was instructed by the Energy Division to call for tenders again. There are allegations that the decision could not be taken due to pressure from a beneficiary group as their chosen company could not get the job. 

Later, when the tender was called again, five proposals were submitted. The TGS-Schlumberger consortium was in first position again in the bidding process. The proposal for the agreement was then sent to the Cabinet Committee on Economic Affairs held on 3 August 2016 through the Energy Division. 

Relevant sources said that it was also opposed that the tender process for the service was not correct. Later, a five-member committee headed by Law Minister Anisul Haq was formed to verify the validity of the tender evaluation. About nine months later, a report from the Law Ministry was sent to the Cabinet Committee. 

The proposal also remained unmoved for a long time. It was finally approved by the Cabinet Committee in April 2019. In March 2020, Petrobangla signed a final agreement with TGS and the Schlumberger Consortium. 

As part of the first phase, the consortium will conduct a 13,600 line kilometer 2-D Multi-Client seismic survey at sea. Although the activities were supposed to start in February, they have not been able to arrange any investors due to Model PSC of Bangladesh 2019. 

To this end, an initiative was taken to revise the Model PSC in 2020. But due to the negligence of a director of Petrobangla, these activities remained on file for about one and a half years. Later, with the intervention of the higher authorities, an international consulting firm was appointed for this work through a tender at the end of last year. The agency has not yet submitted its report. 

Badrul Imam, Honorary Professor of Department of Geology of University of Dhaka told Bangladesh Post “The multi-client survey was supposed to start in 2015. However, it is not started yet, which is bad luck for us.”

“Foreign companies are not interested in oil and gas exploration in the sea without adequate data. Multi-client seismic survey is a recognized method for this. Through which a preliminary idea of the geological structure and location of mineral resources at the bottom of the sea is obtained. The data from this survey will make companies interested in participating in oil and gas exploration there,” he added.

Badrul Imam said that due to the survey data, India and Myanmar have been able to attract foreign companies to explore oil and gas at their ends. Bangladesh has lagged far behind due to not being able to conduct multi-client surveys.

In March 2012, and July 2014, in historic victories at the UN Maritime Tribunal, Bangladesh got 111,000 square kilometers and 19,467 square kilometers from Myanmar and India respectively.

After settling the dispute with Bangladesh, India and Myanmar have started extracting huge quantities of gas in their parts of the sea. Myanmar is exploring and drilling gas blocks. In 2016, Myanmar announced a gas production of 4 trillion cubic feet in Block Thalin-1. The gas lifting started from here.

Currently, more than 10 foreign companies are working for exploration in a number of blocks in the sea of the Myanmar area.