M Azizur Rahman
Australian company Santos is now incurring loss from the Sangu gasfield, as production from the country's lone operational offshore gasfield has declined sharply, a company insider said.
The Sangu gasfield in the Bay of Bengal is now producing around 17 million cubic feet per day (mmcfd) of gas - only 8.5 per cent of its peak gas output of around 200 mmcfd.
"Production of gas from Sangu field under Block No-16 will be economically viable, only when its output
will cross 20 mmcfd," said the official.
Petrobangla director (production sharing contract) Muhammad Imaduddin also admitted that Santos's current operation in Sangu gasfield is not economically viable.
"Incurring loss from Sangu is very usual, as it is supplying very nominal quantity of gas. Its processing plant was constructed to handle production of around 200 mmcfd of gas," he said.
Santos is still producing gas from Sangu, expecting that its overall operation in Block-16 will be profitable, once it starts production of gas from the remaining gas structures and sells the output to private buyers, he added.
Santos has a 75 per cent stake in Sangu, while the US-based Halliburton Energy has 25 per cent.
The Australian firm has a plan to initiate drilling in three gas prospects - Sangu 11, South Sangu and Magnama - in Block-16 from October next. It has spotted the gas prospects through conducting 3-D seismic surveys last year.
But the company is now waiting for an amendment to its existing gas purchase and sales agreement with the state-owned Petrobangla, before beginning exploration in the new offshore prospects. It has already sought the amendment to Petrobangla.
Under the existing agreement, Santos can sell its gas to Petrobangla at the maximum price of US$2.90 per unit (1,000 cubic feet).
Santos incurs loss from Sangu due to gas output fall
FE Team | Published: April 13, 2011 00:00:00 | Updated: February 01, 2018 00:00:00
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