The ongoing collapse of the global energy sector due to the coronavirus pandemic has made oil and gas exploration in the Bay of Bengal uncertain.
State-owned Petrobangla was to call for tenders for exploration of oil and gas in the Bay of Bengal at the end of this year after approval of the Production Sharing Agreement (PSC).
Once the situation becomes normal, new plans will be made in this regard, an Energy & Mineral Resources official said.
Sources said international oil and gas companies are in trouble due to the continuous fall in fuel prices. Experts say it would be difficult to find oil and gas exploration companies in high-risk areas like the sea unless global fuel prices rise.
In March 2012, and July 2014, in historic victories at the UN Maritime Tribunal, Bangladesh got 11,631 square kilometres and 19,467 square kilometres from Myanmar and India respectively. With readjustment, the energy division has been divided into 26 blocks in the entire sea territory. Of these 11 blocks are in the shallow sea and 15 blocks are in the deep sea. However, work has begun in 4 blocks.
“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 save a huge amount of money. Besides, the move may also help overcome the current crisis of gas in the country,” experts said.
Md. Anisur Rahman, Senior Secretary of Energy & Mineral Resources Division told Bangladesh Post, “We were moving forward with a plan, which has been hampered by the coronavirus. At this moment, there is extreme instability in the energy sector all over the world. That is why it is very difficult to get a response from foreign companies for exploration in the Bay of Bengal.
So, we are thinking anew. Because oil prices dropped to below $ 45 in the international market. Many companies may shut down because of this extreme recession. Many will shrink their business. For this reason, we are giving up for now.”
“We had all the preparations. But no one knows when the situation will return to normal. So we will make the next decision after considering everything,” he added.
The country has been dogged by gas shortages for a long time now, and its gas reserve is depleting day by day. In January, State Minister for Power, Energy and Mineral Resources Nasrul Hamid told parliament that the country’s stock of gas reserves will be exhausted in 11 years at the current rate of production. “The country has some 10.63 trillion cubic feet of gas and has a daily production of 2,570 million cubic feet,” he said.
Energy expert Dr. Ijaz Hossain told Bangladesh Post, "We had the opportunity to start oil and gas exploration activities in the sea long ago. But we did not. Although it was late, the initiative was taken to start this activity. But unfortunately at this time the world is in a deep slump in the energy sector. In such a situation, I don't think any foreign company will agree on exploration in the sea. We have to move forward by accepting this reality.”
What to do in this case? In reply, he said, the government can create a fund of its own to convince any foreign operator. It may be that Bangladesh and foreign operators will share the risk. Bapex, the country's state-owned company, could be involved in the work, which will also increase the experience of Bapex.
In 2011, US Company ConocoPhillips signed an agreement to explore for oil and gas in Blocks 10 and 11 in the deep sea. Then at the end of 2013, it was supposed to sign PSC in Block 7 with ConocoPhillips. But after many attempts, Conoco did not agree to sign PSC in the new block. Besides, ConocoPhillips approached the government to increase the price of gas outside PSC. But as the government did not agree, the US Company left two blocks of gas 10 and 11 in 2015.
KrisEnergy of Singapore and Australian Santos is currently working in Block-11 in the Shallow Sea. Indian company ONGC Videsh Limited is working in Blocks 4 and 9 of Shallow Sea. On the other hand, the Korean company Posco Daiyu is working in the 12th block of the Bay of Bengal. Meanwhile, Posco Daiyu recently told Petrobangla that it would leave on the pretext that it could not find a partner for exploration. However, Petrobangla has given it six months time to find its partner.
An official of the energy division said that the Indian companies have already completed around 3,100 line-kilometer 2D or two dimensional seismic surveys on both the shallow sea blocks. They have already selected a drilling contractor - a joint venture of China based company - Sinopec and US based company Halliburton.
Sources said there are indications of vast reserves of oil and gas in Block D-12 in the deep sea, and Bangladesh could have a minimum of 5 prospective structures in the Bay of Bengal following the 2-D seismic survey of 1,580 sq kms in the area.
