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Bay survey completes one-third, gas reserves rollout awaited
Published :
Jun 15, 2023 10:32 PM
Updated :
Jun 15, 2023 10:42 PM
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A multi-client survey in over one-third of Bangladesh's total sea area has just completed to delineate hydrocarbon reserves and outcome rollout is awaited while an acute primary-fuel crunch cripples the economy.
And the probable new gas may be as expensive as imported LNG
if the draft new exploration contract gets through with higher baits for international explorers, sources said.
"We have completed 2D (two-dimensional) seismic survey in around 13,000 line-kilometer (LKM) area of our sea territory," Petrobangla chairman Zanendra Nath Sarker told the FE.
Results of the survey in the Bay of Bengal waters will be available by August, he said.
The contractor, Tomlinson Geophysical Services Inc (TGS)-Schlumberger, a Norway-US joint venture (JV), is contractually bound to carry out survey in 32,000-LKM area.
The JV company will carry out seismic survey in the remaining 19,000-LKM area from February 2024, said Mr Sarker.
The contractor had initiated the survey at the fag-end of its contractually obligated deadline for completion of the survey and completed it only recently, a senior Petrobangla official told the FE.
Experts of the JV firm are now assessing data of its surveyed area before rolling out the results, he said.
"Through this survey the firm will be able to say primarily about presence of hydrocarbon deposit, if any, in the Bay," said the official.
Actual discovery of hydrocarbons could be ascertained only after carrying out 3D (three-dimensional) seismic survey and necessary drilling of wells in potential spots, he added.
Petrobangla would provide the survey output to interested international oil companies (IOCs) with the non-exclusive multi-client seismic data of the offshore blocks to help them carry out basin evaluation, prospect generation, and participation in the upcoming bidding for exploration.
As per the contract terms, the JV surveyor would not get any payment from Petrobangla for its work, but would be free to sell data to the interested IOCs.
The TGS-Schlumberger duo would be free to trade the data with the IOCs over the next eight years.
As per terms of contract, the JV firm would have to share the seismic data and the profit with the host.
The firm will do survey in 21 offshore blocks within the sovereign territory of Bangladesh, where potential hydrocarbon reserves remain untapped over the years, while the neighbouring countries are extracting the fossil fuels in the adjacent areas.
The blocks together cover an 81,000-square-kilometre area with depths ranging from 20 metres to around 2,500 metres in the Bay.
Sources said the TGS-Schlumberger JV was selected through a competitive bidding in 2018 for carrying out the multi-client seismic survey. It was selected in the third such tender as the previous two, floated in 2015, were cancelled "for reasons not known", said a senior Petrobangla official.
The Cabinet Committee on Economic Affairs approved awarding the job to the firm in April 2019.
The Covid-19 pandemic along with subsequent record fall in oil and energy prices on the international market, however, kept the contractor at bay, thus delaying the survey.
Bangladesh never conducted multi-client seismic survey in its offshore areas in the past. The country earlier floated international tenders several times to carry out oil-and-gas exploration by the IOCs - both in onshore and offshore.
The bid-winning IOCs would carry out seismic surveys in their respective blocks on their own before initiating exploration.
The country's offshore areas are now well-demarcated following the verdicts from international courts. Bangladesh has territorial rights of up to 200 nautical miles from the shore into the Bay of Bengal as exclusive economic zone.
Besides, the country has free access to around 387 nautical miles into the deep sea following the demarcation of maritime boundary by international court of arbitration.
There is heavy potential of getting hydrocarbons in Bangladesh's territorial waters, as both India and Myanmar have already discovered huge gas reserves in the Bay.
Besides, to woo back overseas companies, Bangladesh is set to offer international oil companies enhanced output share. In addition, overseas companies to be operational in future offshore-exploration projects will also have the liberty to export natural gas after meeting domestic demand.
"The IOCs are expected to show significant interest in exploration in the country's offshore areas once the seismic data are available," says energy-expert Prof M Tamim, who was special assistant to the chief adviser of former caretaker government on energy issues.
It should have been carried out earlier to ramp up local exploration and ensure increased output of local gas, which could reduce dependence on imported fuels, including expensive LNG (liquefied natural gas), he said.
Under the new contract, Petrobangla will purchase natural gas from exploration contractors at more than three times the current price of around US$2.75 per million British Thermal unit (MMBtu) as it is hiking the price linking same benchmark used to buy expensive liquefied natural gas or LNG without capping, said sources.
Under the proposed pricing formula, the corporation's offered buying price to IOCs will be around US$10 per MMBtu considering the current global Brent crude price.
In the draft model PSC, which is expected to be used in the next bidding round, Petrobangla has proposed to reduce government share in 'profit gas' to around 40 per cent from 70 per cent in previous contacts.
The new model PSC is expected to be approved by the cabinet committee on economic affairs within next couple of months, said sources.
Petrobangla floated offshore bidding rounds without any survey in 2008, 2012 and 2016. But only a few IOCs took part in the biddings, while production-sharing contracts (PSCs) could be inked only for four blocks.
Currently, Bangladesh has 26 open offshore and 22 onshore blocks.
Out of the offshore blocks, 15 are located in deep waters and 11 in shallow waters. Bangladesh has PSCs for two shallow-water blocks-SS-04 and SS-09 -- which are being explored jointly by India's ONGC Videsh Ltd and Oil India Ltd.
Out of the total onshore blocks, only four are awarded to IOCs.
US's Chevron has been exploring and producing natural gas in three onshore blocks - Block 12, Block 13 and Block 14 - while Singapore's KrisEnergy is producing natural gas from Block-9.
Azizjst@yahoo.com
Bay survey completes one-third, gas reserves rollout awaited
A multi-client survey in over one-third of Bangladesh's total sea area has just completed to delineate hydrocarbon reserves and outcome rollout is awaited while an acute primary-fuel crunch cripples the economy. And the probable new gas may be as expensive as imported LNG if the draft new explora
