Cairn, BAPEX at loggerheads over right to gas pocket

FE Team | Published: June 23, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Doulot Akter Mala
Cairn Energy and Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) are at loggerheads over right to conduct exploration in a gas reserve pocket, an area claimed by both the companies.
Sources said the disputed area covering Sundarpul and Charjobbar straddles into both blocks 10 and 15 owned by the two. The area has an estimated 160 billion cubic feet of gas.
The state-owned Bapex is seeking to explore in its designated block 10 that covers a portion of the Sundarpul area.
The UK-based company, which was awarded block 15, recently sought government's permission to explore gas at the place.
The sources said immediate exploration is necessary in the area to resolve the current gas supply shortfall in Chittagong region.
They said three entities of the Petrobangla--- Bangladesh Gas Fields Company Ltd (BGFCL), Sylhet Gas Fields Ltd (SGFCL) and the BAPEX will submit a development project proposal to the energy ministry by next week to explore gas in block-10.
The energy ministry sources said the government intends to award the area to the BAPEX, but a fund crisis is blocking the move.
Currently, the Chittagong region has been getting around 170 million cubic feet (mmcfd) gas per day, mostly from the Sangu gas field, against the demand of 270-300 (mmcfd).
The port city has been suffering from gas crisis because of decline in production in the Sangu field.
Cairn Energy has given a brief presentation to the government to award the disputed gas reserve area.
It will be economically viable for the company to explore gas in the area, as it has already own the block 15, sources said.
Besides, the block 15 area is small compared to other blocks, they said.
The company has to receive a green signal from the government by this month to prepare itself for drilling in October, when the sea weather remains favourable for the purpose.
If the government allows the Cairn energy to explore in the area and strengthens BAPEX by providing adequate fund, the Chittagong region will get about 100 mmcfd gas by 2009, energy division sources said.
They also said that the Sangu gas field will go almost dry by next three years so the government has to take prompt decision to explore more gas fields.
The Cairn Energy discovered the Sangu gas-field in offshore Block 16 in 1996.
The Cairn energy has been receiving 13 per cent less gas than its assumption from the Sangu field.
The Sangu field is now supplying a maximum of 100 million cubic feet gas per day.
The authority can increase the gas supply to the Chittagong from the Bibiyana gas field by installing two compressors at Ashuganj and Mouchari, energy division sources said.
They said that the government will not be able to install those compressors by 2010 due to financial constraints.
Meanwhile, the Cairn is expected to start drilling two exploratory wells in October at Megnama and Hatiya under block 16, where the country's only offshore field, Sangu, is located.
The UK-based Cairn energy has found two gas fields in Hatiya and Megnama by conducting seismic survey.
It has found a probable reserve of gas of about 1.76 trillion cubic feet in Hatiya and 3.5 tcf in Megnama.
Energy experts have underscored the need for exploration of new gas fields as the country is likely to suffer from gas shortage after 2012.
Currently, the country produces about 1,600 mmcfd of gas against the demand of over 1,800 mmcfd.