Government plans extensive exploration of oil, gas

Shamim Jahangir

16th March, 2020 10:09:49 printer

Government plans extensive exploration of oil, gas

The government is planning to initiate extensive drilling activities in onshore and offshore blocks to explore oil and natural gas to meet the growing demand, a top official has said.

“We are planning horizontal drilling activities in onshore and offshore dry wells to explore low-cost natural gas,” Energy and Mineral Resources Division’s senior secretary Md Anisur Rahman told the Daily Sun on Monday.

He said the government will engage internationally renowned Eximmobil, Chevron, POSCO and others to lead the exploration.

“We have already requested the POSCO to explore oil and gas in deep-sea block-12 near Myanmar with a revised tariff at $ $7.26 per mmBtu,” Md Anisur Rahman said.

Petrobangla is currently importing LNG (liquefied natural gas) at an average price of around $8.0 per mmBtu from Qatar Gas and Oman Trading International, official sources said.

South Korean firm POSCO recently has announced to surrender their deep-sea block-12. But it has withdrawn the plan recently after the intervention of the ministry.

The newly appointed energy secretary also said the government also plans to allow the US Company for horizontal drilling in the country’s three existing oil and gas fields for exploring the new gas reserves.

Chevron is now producing over half of the country’s total gas production from three major gas fields --- Bibiyana, Jalalabad and Moulavibazar.

Officials said the Eximmobil is interested in producing new gas from dry well of the Sangu gas field in the shallow sea block.

The government is planning to re-drill 11 gas wells which were abandoned or suspended in different periods due to poor prospect of the natural gas reserve, officials said. 

The wells are: Kasba-1, Mubarakpur-1, Srikail-1, Rupganj-1, Sundalpur-1, Saldanadi-1, Muladi-1, Muladi-2, Samutang South-1, Halda-1 and Saldanadi-2.

The ministry of power and energy has already asked state-owned Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) to conduct a feasibility study as early as possible for drilling the 11 wells.

BAPEX has earlier suspended drilling activities in 34 out of 239 wells those were in progress by local and international oil companies in different period of times.

According to BAPEX sources, Kasba-1 was drilled in 2018 and the authorities did not find any good prospect of natural gas between 2463 meters and 2472 meter from the surface. The gas reserve in the well was estimated at only three billion cubic feet, which was not commercially viable then.

Mubarakpur-1 well was drilled in 2014 after three potential gas reservoirs were discovered initially at the depth of 4220-4223 meters, 4240-4244 meters and 4595-4604 meters respectively.

But no viable reservoirs were found after the drilling of the well. But the government is planning to drill the well again in the hope of finding natural gas.

BAPEX has found the Srikail-1 well, which was discovered in 2004, to be a highly potential gas well as has six separate zones.

Rupganj-1 well has a recoverable reserve of 33bcf of gas. The well was abandoned in October 2017 after producing 0.68bcf of natural gas in the same year. Bapex has already conducted a 3D seismic survey on the well.

Besides, Sundalpur well-1, which was drilled in 2011, was abandoned after producing 9.96bcf of natural gas due to sand and water pressure.

The government will review the viability of the Semutang south-1, which was found commercially non-viable in 2018.

Besides, the government is also reviewing the prospects of Jaldi, Sitapahar, Patiya, Patharia, Sunetra and Kasalang gas wells.

Petrobangla invited the latest bidding round eight years back in 2012 through which three shallow-water blocks and one deep-water block were awarded to contractors.

But not a single exploratory well was drilled by the contractors till now. Petrobangla rather extended the tenure of PSCs for each of the contractors by several years each.

Petrobangla has revised upward the price of natural gas in the latest MPSC to allure international companies for the upcoming bidding round.

And as per the model PSC 2020, the gas price for deep-sea blocks has been set at around $7.26 per mmBtu, up by 11.69 per cent from the previous MPSC for the deep-sea blocks.

With re-gasification fees of around $0.60 per mmBtu (metric million British thermal unit), the price of re-gasified LNG stands at around $8.60 per mmBtu.

The country’s natural gas output is around 3,180 million cubic feet per day (mmcfd), some 597 mmcfd of it is regasified LNG, according to Petrobangla statistics as of February 19, 2020.

The entire local production comes from onshore gas fields.

Currently, five IOCs have active PSCs either individually or under a joint venture to explore three shallow-water blocks and one deep-water block for offshore exploration.