Queue of foreign firms grow longer for joint venture oil, gas hunt

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M Azizur Rahman
A large number of international oil companies (IOCs) are keen on going for joint ventures with the country's state-owned energy companies for oil and gas hunt in onshore and offshore hydrocarbon blocks, officials said Sunday.
They are now eagerly waiting for the approval of the country's first-ever joint venture policy to work closely with the local energy companies to resuscitate the ailing sector and ensure future energy security, a senior energy ministry official said.
Santos of Australia, China National Offshore Oil Corporation (CNOOC), GAIL of India, Daewoo International and Korea Resource Corporation (KORES) of South Korea and Thai PTTEP are prominent among those queuing up for signing such agreements, said the official.
Petrobangla officials said several companies of South Korea and Thailand have already signed memorandum of understanding (MoU) with the state-owned Petrobangla to ensure joint hunt for oil and gas in Bangladesh territory.
The South Korean consortium signed the MoU under the supervision of the Korean Ministry of Commerce, Industry and Energy, he added.
The consortium includes - Korea Electric Power Corporation (KEPCO), KORES, Daewoo International, Luxon Global and Posco.
Thailand's state-run PTT Exploration and Production Company signed a similar MoU with the Petrobangla to enhance bilateral cooperation in the energy sector.
The Thai PTTEP had sent a high-level expert team last year to seal the gas seepage from the Titas gas field at Brahmanbaria under the MoU, said the Petrobangla official.
All the foreign companies have shown interest to chip in investments and bring in technology to help Bangladesh mitigate its energy supply crunch.
"Most of the foreign companies were interested to initiate oil and gas exploration activities jointly with Petrobangla in the country's hydrocarbon blocks about a year ago," Petrobangla acting chairman M Muqtadir Ali told the FE Sunday.
"But we requested them to wait until a joint venture policy is adopted," the Petrobangla top brass said.
The proposed joint venture policy is now under scrutiny of the energy ministry for the final nod.
Petrobangla has drafted the policy and submitted it to the energy ministry for approval.
If adopted, the policy would open up new avenues to entice competent foreign and local companies in developing the country's energy sector to ensure future energy security and boost industrialisation, said Petrobangla officials.
It aims at making room for the interested players to take part actively having partnerships with state-owned entities in expediting energy sector activities in oil, gas and coal sectors on a fast-track basis.
All energy-related projects like oil and gas exploration, production and transmission, coalmine development, coal extraction could be brought under the joint venture.
It would help streamline the country's energy sector development activities within the shortest possible time, he added.
Once approved the interested private companies would be selected through open tender in the shortest possible time, Petrobangla Acting Chairman said.
He said the state-owned companies might seek all sorts of assistance from the interested joint venture partners like funds, technical assistance or equipment for quick implementation of energy sector development work.
The energy ministry might be empowered to approve energy relevant projects worth up to $50 million to speed up the activities.
The country is facing acute energy crisis as gas production is now hovering around 1900 million cubic feet per day (mmcfd) against the demand for around 2100mmcfd.
Scores of industries remained shut and power plants switched off due to gas crisis. The government had to close three fertiliser factories recently to divert gas to power plants and initiate power generation in some of the closed ones.
As of Petrobangla's last year's projection the country would need a further 24 Tcf of gas and investment worth $7.7 billion in the next 16 years to maintain its 7.0 per cent economic growth rate.
But the state-owned energy companies are struggling to arrange funds to carry out necessary development works.
At current consumption rates, the country's proven gas reserves of 8.39 Tcf gas will start drying up from 2011, and if the proven and probable reserves of around 14.4 Tcf are taken into account, the country's gas reserves would last until 2015.
Despite having five coalmines with potential reserves of 2.90 billion tonnes of bituminous coal, the country's coal sector development is limited to production from one underground coalmine with only around 3,000 tonnes per day.