Some IOCs want to get involved in hydrocarbon exploration

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M Azizur Rahman
Several international oil companies (IOCs) are looking for opportunities to get involved in hydrocarbon exploration in the country's potential onshore gas fields.
Sources said Indian Oil and Natural Gas Corporation Ltd (ONGC), French oil giant Total, Scottish Cairn Energy, Petroleum Authority of Thailand Exploration and Production Company (PTTEP) and China National Offshore Oil Corporation (CNOOC) are among the IOCs that have already approached Petrobangla during the last six months proposing to conduct onshore exploration.
The IOCs are opting for establishing joint ventures with the state-owned gas exploration company, the Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX), as a High Court (HC) ruling bars the IOCs from entering directly into onshore hydrocarbon exploration through production sharing contracts (PSCs), a senior Petrobangla official told the FE.
He said a HC bench in 2001 issued an injunction and asked the government to refrain from awarding any gas block to IOCs through PSC following the massive Magurchhara gas field explosion in 1997.
As the Energy and Mineral Resources Division (EMRD) made a legal move last year to vacate the HC ruling, the HC withdrew a portion of its injunction allowing the government to sign PSCs only for offshore gas fields.
Currently over a dozen onshore gas field remains open for exploitation as the government neither reserved those for BAPEX nor signed any PSC with the IOCs.
The government has so far signed eight PSCs with IOCs for exploration in 10 out of 23 gas blocks across the country.
In order to accommodate the IOC pleas and enhance gas supply to meet the growing demands, the Petrobangla last week asked BAPEX to conduct exploratory activities in its 'reserved' areas having complicated structural layers.
The Petrobangla also asked BAPEX to prepare suitable terms of reference (TOR) for entering into joint ventures with the IOCs to develop the gas fields having risky and complicated structural layers in the 'ring fenced' areas, meaning demarcated spots.
The TOR must be transparent and should protect national interests, the Petrobangla stressed.
"The BAPEX has initiated works to identify the gas fields having complicated structural layers, which are beyond its capability to explore," said a senior BAPEX official.
Sources said the BAPEX's reserved or ring-fenced areas include Sitakundu, Patia, Jaldi, Kapatia, North Bhairab, Hazipur, Kamta, Patharia and Mobarakpur.
The BAPEX officials consider Sitakundu, Patharia, Mobarakpur and Jaldi as complicated structures.
Sources said the Sitakundu structure, which is located in block 15, has 48 gas seepages and three oil seepages in the surface and the IOCs had drilled four wells there ages ago and the Petrobangla drilled one in 1983.
The Patharia field is located in block 22, while Mobarakpur is located in block 3.
Presently, the country is producing around 1,600 million cubic feet per day (mmcfd) of gas.
The projected demand for gas has been estimated to be 1,800 mmcfd in 2008 and 2,850 mmcfd in 2012.