Govt keen to develop energy sector: Muhith

FE Report | Published: March 13, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

Finance Minister AMA Muhith said Wednesday the government was keen to develop the country's energy sector as it is the key to development.
"There is no way for development without energy," he said while speaking as chief guest at the Production Sharing Contract (PSC) signing ceremony at Petrocentre in the city.
He said the government would continue its effort to achieve energy security.
The PSC was signed with the joint venture (JV) between Australia's Santos and Singapore's KrisEnergy on exploration of gas in the shallow water block SS-11.
Speaking at the function, Prime Minister's adviser Dr Tawfiq-e-Elahi Chowdhury said many people might criticise the rental power plants.
But the government had no option but the rental power to resolve the power crisis.
Mr Chowdhury expressed hope that the JV firm would be able to strike a sizeable quantity of gas in the Bay of Bengal.
State Minister for Ministry of Power, Energy and Mineral Resources Nasrul Hamid said the government wanted to see the country as an energy-secure one.
"We have a vision to achieve the middle income country status by 2021 and the developed country status by 2041," Mr Hamid said.
He also said Petrobangla would sign another PSC within a month with another foreign company for hydrocarbon exploration in the Bay of Bengal.
Speaking at the function, KrisEnergy Director for Exploration and Production Chris Gibson Robinson said the JV firm was confident of striking hydrocarbon in the shallow water block SS-11.
"We shall do our best during the exploration," said Santos Bangladesh President Andrew De Garis.
The block covers 4,475 sqm in the Bay of Bengal and the depth of water in the block ranges from 100 metres to 1,000 metres.
The most part of the block lies in shallow water up to the depth of 200 metres with the furthest southwest portion extending into water up to 1,500 metres deep.
The PSC stipulates an initial five-year term and the Santos-KrisEnergy JV has given a bank guarantee of $ 15 million for the initial five years of exploration.
This would require an investment of US$ 30-32 million to implement its work plan during the five-year period.
The PSC signing followed the award of two shallow water blocks -- SS-04 and SS-09 -- to a JV comprising India's ONGC Videsh Limited and Oil India Limited on February 17.
Apart from these two JVs, ConocoPhillips was the only other company that submitted its bid for one of the nine shallow water blocks offered by Bangladesh in the December 2012 licensing round.
The Petrobangla subsidiary Bangladesh Petroleum Exploration and Production Company Ltd. will have the 10 per cent carried interest in all four blocks.
The contract period for exploration will be eight years. Contractors will be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field.
The price of gas in Bangladesh is pegged to that of high sulfur fuel oil (HSFO) in the international market, while oil prices are determined based on a fair market value agreed on by the companies and Petrobangla. The floor price of HSFO has been fixed at $ 100, which is capped at $200.
The PSCs also grant the licence holders the right to full repatriation of profits and exemption from paying any signature bonus or royalty or any duty on equipment and machinery imported for exploration, development and production. Companies will also have the 100 per cent cost recovery facility.
Contractors can also sell gas directly to third parties, subject to Petrobangla's right of first refusal.
But hydrocarbons produced from the shallow water blocks must be sold in the domestic market as exports are prohibited under the PSCs.
The Santos-KrisEnergy bid was the only one that state-owned Petrobangla received in its second attempt to woo international oil companies for hydrocarbon exploration in shallow water of the Bay of Bengal.
The JV submitted its bid only for the SS-11 on July 29, 2013, the final day of bid submission for the six shallow water blocks offered for exploration.
Separately the Santos currently has exploration rights to the offshore Magnama structure in the Bay of Bengal.
The Australian firm was looking for a partner to carry out exploration in the potential Magnama gas structure in Bangladesh, a company official said earlier.
Magnama is situated within the Block 16 where Bangladesh's lone operating offshore Sangu-11 is located.
The Australian oil and gas exploration giant Santos was the lone operator of the offshore Sangu-11 well in the Bay of Bengal, which was shut permanently on October 1, 2013.
The KrisEnergy took over the UK's Tullow Oil in Bangladesh by purchasing its Bangladesh stake at US$ 42.35 million with effect from January 1, 2013.
Following the purchase, the KrisEnergy now has 30 per cent interest in the onshore Block 9. It operates it on behalf of the partners Niko Resources (60 per cent) and Bapex (10 per cent).
The block includes the Bangora gas producing facility and the Lalmai discovery. The Bangora gas field is currently producing around 111 million cubic feet per day (mmcfd) of gas.