Australian oil and gas exploration company Santos is eyeing to pull itself out from operations in Bangladesh by selling stakes, which is deemed as a major setback to the country's future energy security.
Santos has initiated a fresh search to find out a buyer of its Bangladesh stakes, as its recent attempt to sell stakes to the UK-based Ophir Energy did not succeed, industry insiders said.
When contacted, Pro-Vice Chancellor of BRAC University Prof M Tamim said, "It (the selling of stakes) will be a setback for the country's future exploration plan."
He, however, said Santos has the option to withdraw itself from operations in Bangladesh or sell stakes, if the company does not find it viable for future operations.
In 2017, Santos drilled an exploration well in Magnama-2 well along with the state-run Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) under a joint venture (JV), but 'failed' to discover a commercially viable hydrocarbon reserve.
Magnama structure is within Block-16 areas, where offshore Sangu well is located. The water depth of Magnama is up to 20 metres from nearby onshore Kutubdia Island.
Santos claimed to have delineated a semi-commercial discovery there, although it did not undertake any programme for further exploration.
Santos's predecessor - the UK's Cairn Energy - had discovered natural gas prospects in Magnama, penetrated by a single exploration well, around a decade ago.
Cairn drilled the exploration well in Magnama in 2008, and subsequently carried out a two-dimensional (2D) seismic survey in 213 line kilometre (LKM) area in early 2010, a senior Petrobangla official said.
After acquiring Cairn's Bangladesh assets, Santos was seeking a JV partner to initiate drilling in Magnama structure, and Bapex came up in response.
Drilling the exploration well in Magnama was Bapex's first step to explore any offshore well. Bapex had to pay Santos around US$ 16.50 million as 'sunk cost' for involvement with the JV apart from sharing drilling cost, he also said.
Separately, Santos has a JV with Singapore's KrisEnergy to explore offshore sea block SS-11 in the Bay of Bengal.
The Santos-KrisEnergy JV carried out a 3D seismic survey in the block last year, covering some 305 square kilometres (sq-km) area, to explore hydrocarbon in shallow water.
The JV carried out a 2D seismic survey in 3,220 LKM area in 2017 and identified prospects that wooed it to carry out the 3D seismic survey.
The JV committed to drill an exploration well as well as to carry out 1,876 LKM 2D seismic survey and 300 sq-km 3D survey during its five-year contractual period.
But it carried out only 2D and 3D seismic surveys during five years of its initial contract period.
Earlier, the Santos-KrisEnergy JV inked a production sharing contract (PSC) with Petrobangla on March 12, 2014 with a five-year exploration period, which was set to expire on March 11, 2019.
Petrobangla, however, extended the PSC tenure of the JV by two more years, offering it the opportunity to carry out 'committed' explorations in the Bay of Bengal until March 2021.
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