The government has awarded a contract to China's Sinopec International Petroleum Service Corporation for drilling four onshore exploration wells in Titas gas-field keeping the state-run oil and gas exploration company almost idle, said officials.
State-owned Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) will have no drilling programme almost during the entire period of next year as the consequences of awarding these gas wells to the foreign firm, they added.
"We have inked deal with the Chinese firm and as per the contract the firm will have to start drilling the wells by May, 2015," managing director of Bangladesh Gas Fields Company Ltd (BGFCL) Mostafa Kamal told the FE Wednesday last.
The four wells are: Titas-23, Titas-24, Titas-25 and Titas-26. Owned by the BGFCL, all are located in the Titas gas-field in Brahmanbaria district, he said.
Currently, Bapex is involved in drilling three wells - Kailashtila-7, Mobarakpur-1, Salda-4 and drilling of these wells are scheduled to be completed within February, 2015, said a senior Bapex official.
After drilling of these wells Bapex will not have any scheduled programme until November, 2015, he added.
BGFCL awarded the four onshore gas wells to Sinopec after a competitive bidding, barring Bapex to take part, the official lamented.
This is a mockery to the government's 'so called' move to strengthen Bapex and engage it with increased exploration activities, the official vented his anger.
The Titas, where all the four awarded gas wells are located is some 100 km off the capital and is Bangladesh's second-largest
producing gas-field after the Chevron-operated Bibiyana field.
This field is currently producing around 516 million cubic feet per day (mmcfd) across 21 producing wells against an overall production capacity of 518 mmcfd.
In addition to drilling the four wells, Sinopec will also be responsible for third-party engineering services regarding the drilling of the wells.
The third-party engineering services include cementation, mud logging, wire-line logging, supplying explosives, detonator core analysis, drill-stem testing wire-line or slick-line operation, supply of drill bits and nozzles, supply of mud and completion chemicals.
The Chinese firm has submitted performance guarantee worth $5.0 million to carry out the drilling job, said Mr Kamal.
Sinopec has committed to completing the four well-drilling operation at a cost of Tk 4.05 billion (US$52 million), he said.
The Asian Development Bank will provide the entire fund of US$52 million to complete the drilling of the onshore gas wells in the Titas gas-field, he added.
BGFCL, however, will provide necessary materials and complete civil works to facilitate Sinopec completing the drilling programme as per the contract, said the BGFCL top brass.
Sinopec will bring in one drilling rig to complete the project works.
The value of material supply and civil works to be provided by the BGFCL would be around $8.0 million in total -- $2.0 million for each of the four wells.
Mr Kamal further said as per the contract, Sinopec will have to complete the drilling of all the four wells within 19 months of signing the contract, meaning by June, 2015.
"We are expecting to get natural gas output of around 25,000Mcf/d from each of the wells on completion of drilling the wells," said the BGFCL official.
The state-owned BGFCL floated tender to appoint an international contractor to carry out the four well drilling in October, 2013.
Russian oil and gas major Gazprom along with the Chinese Sinopec had submitted bids to drill the four wells in the Titas gas-field owned by state-run Petrobangla's subsidiary BGFCL as the contractor.
Gazprom EP International BV, registered in the Netherlands, was found non-responsive as it did not provide detailed planning for drilling the four wells, said the official.
The four well drilling is Sinopec's first-ever involvement in Bangladesh's oil and gas exploration activities, but it is country's second event of appointing any international oil company to drill wells as contractor.
Gazprom is the first foreign company to drill wells in Bangladesh on contract basis.
It was awarded a 10-well-drilling job in April 2012.
Other international oil companies active in Bangladesh operate under production-sharing contracts or in joint ventures with Bangladesh Petroleum Exploration and Production Company (Bapex).
A consortium of Sinopec Shengli and Longwood Resources of the USA was previously in talks with Bapex to develop four onshore fields in Bangladesh's Chittagong region under a joint venture.
But the government in September, 2013 ended the negotiations and decided not to award the planned work to the consortium.
The four fields planned for development were Kotia, Joldi, Kafalong and Shitapahar -- all located in block 22, which spans 13,900 sq km in Chittagong Hill Tracts region.
azizjst@yahoo.com
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