BAPEX was emasculated to promote the IOCs
Saturday, 4 August 2007
Enayet Rasul
A leading daily newspaper of the country headlined it on Thursday that fresh moves have been initiated from Petrobangla that would lead to making impotent the state-owned organization-BAPEX-which has been playing a very commendable role in finding gas reserves in the country, developing the same and preparing the gas for supplies to users. BAPEX and its predecessor bodies have to their credit the discoveries of major gas fields in the country, an almost flawless records in respect of accidents and successfully meeting the energy needs of the users at reasonable prices.
But BAPEX was sought to be subdued by interest groups and the latest in such schemes is the attempt of a section of Petrobangla officials who are pushing to dispossess BAPEX of exploration and production rights over some areas where possibilities of finding gas and petroleum are very high. These areas or blocks were reserved for exploitation by BAPEX alone through government's policy measures about a decade ago. But now senior Petrobangla officials are pushing the government for BAPEX to give up the exclusive control over these blocks by allowing international oil companies (IOCs) to exploit these special zones under joint venture agreements with BAPEX.
Gas is like the life-blood of the Bangladesh economy in many respects. But the on going processes of gas exploration and production has become controversial from allowing foreign companies to play too important a role in these activities at the cost of the local endeavour . Foreign companies have been ruining gas reserves of the country from careless exploration methods. Huge quantities of gas were wasted from accidents by foreign companies in recent years at Magurchara and Tengratila . Some of these companies are selling gas to Bangladesh in foreign currencies after production from ready-made fields. This is causing more a drain of the country's resources in contrast to whatever gains are there from augmented supply of gas from the operations of these foreign companies.
But BAPEX has a far better record than the foreign companies in successfully exploring for gas and also producing it comparatively cheaper. Its record is an enviable one of finding gas in one out of every three well dug by it. The record of the foreign companies is a poor one in comparison. Besides, BAPEX enjoys a very clean reputation for safe operations. Funds have been withheld from this vital organisation on this or that plea when the opposite should have been the case to build the longer term energy security of the country.
It is nothing difficult for the government to provide BAPEX with the resources that would be required by it to take on gas exploration activities with full vigour. The latest move from Petrobangla to dispossess BAPEX from the ring-fenced reserved blocks which are considered as having the brightest potentials to have gas and oil in them, is justified by the Petrobangla officials as saving costs. They contend that there is not so much resources available to fund the operational costs of BAPEX. But the three gas production companies under Petrobangla pay to the government's exchequer taka 18 billion annually on average. If out of this amount, only 2 billion is given to BAPEX, it can then be fully revitalized and start paying back to the national economy a great deal more than the resources spent on its operations.
BAPEX authorities sought from the government a one time allocation of taka 5 billion to expand its business and help the nation. But this was not provided. But in India, the national oil company ONGG was given 5 billion rupee as one time investment a couple of decades back. Reportedly, this company has transformed into a rupee 300 billion worth company with this lump sum allocation helping to meet the country's energy requirements immensely and cheaply. BAPEX could play a similar role for Bangladesh but remains bogged down by conspiracies expressly designed to ensure its impotent conditions.
The demand for gas in Bangladesh is rising by 7 to 8 per cent annually. This demand could rise even further in the near future and in that case a mismatch between the demand and supply of gas could occur as early as the year 2010. Therefore, it is extremely important to accelerate the rate of exploration and production activities of gas and oil in the onshore areas and these moves need to be spearheaded by the national organisation in the backdrop of accumulated experiences and in the vital national interests. It is exclusively in the off-shore areas where Bangladesh lacks technology and resources to successfully undertake energy exploration that foreign companies will understandably play the main role.
Bangladesh which has had substantial capacities for energy exploration and production within its land territories, was purposefully made into a pathetic case in this area to justify the bringing in of the IOCs. The national organization for exploring and producing energy sources was stripped off its role and esteem in public eyes through cleverly calculated moves. It was decimated by wooing its officials and experts away to the IOCs with promises of fat salaries and perks. Developmental allocations were purposefully denied to it so that it could gradually become disabled in every way. Even the buying of a few rigs had to be put off from non availability of funds. Energy ministers and others in key controlling positions to direct the country's energy policies were allegedly turned into hand maidens of the IOCs through briberies. Some of these cases were only divulged in a face-saving manner under the previous elected government at the fag end of its existence.
But members of the present caretaker government who claim to be crusaders in righting all major wrongs of the past and who are professedly devoted to making safe the country's progress in the vital areas that include exploitation of energy resources and energy planning, it becomes a very serious obligation for them to leave their mark in this sphere on a sustainable basis. They will have to go to the roots of the conspiracies that have already led to the country losing control over a notable part of its energy resources. IOCs now sit astride Bangladesh and claim as their own the very gas in its soil that belong to Bangladesh and its people alone. In the name of investments, they are selling gas produced in Bangladesh to Bangladesh itself. And not only this, Bangladesh has to buy its own gas from them at prices which are much higher than the ones that the state owned bodies of Bangladesh charge various gas users who are supplied gas from wells under the government's ownership and control.
Thus, the mercenary attitude of the foreign companies is obvious. But that is also not unusual. Foreign companies, given the easy opportunity, will understandably look to their own interests. It is up to the people, particularly the government of Bangladesh, to be the ever vigilant and absolutely uncompromising custodian of their best economic interests. They will have none to blame but themselves for failing to rise to the challenge and foiling the designs of interest groups.
BAPEX was not even provided with resources to buy a rig or two to carry out drilling activities. But working under even such serious constraints, BAPEX discovered entirely by its own initiative a big gasfield at Kapasia in Gazipur. The field is estimated to have at least 200 billion cubic feet of gas. BAPEX requires only a reasonable allocation of money to exploit the field and send the produced output of gas to the national gas grid. Another gas field was discovered by BAPEX last year at Mobarakpur in Pabna. But it was reported that only snags in the supply of needed explosives is preventing the carrying out of more exploration activities by BAPEX in this area.
The need to spend about $2 billion at the current rate for fuel oil import certainly is a formidable pressure on the foreign currency reserve and a major unnecessary drain of the country's resources. This drain seems absolutely unjustifiable when the country has local energy available that can be used extensively to much reduce consumption of imported fuel oil. If $ 2 billion can be spent to import and consume fuel oil, then giving a small fraction of this amount to BAPEX will enable it to step up its gas exploration and production ventures. The added gas reserves found by it can then be used up extensively to substantially reduce the dependence on imported fuel oil. Experts say that BAPEX also has the capacity to find large reserves of petroleum in Bangladesh. Petroleum was found at Haripur in Sylhet in the eighties by the predecessor body of BAPEX. But production and further exploration for petroleum was deliberately turned off there . The same experts maintain that there is a conspiracy to purposefully undermine the country's energy sector. The conspiracy needs to be foiled. If this can be done then what such a development will mean for the country's balance of payments and the health of its foreign currency reserves should be obvious.
It is indeed high time for the government to come out of adverse influences and to be decisive in its decision about who should control and exploit the country's energy resources. The national demand at the level of experts and users is for complete national control over energy resources and optimm utilisation of gas in the highest national economic interests. The Bangladesh Paribesh Andolan (BAPA) organized a seminar recently in which it underscored that the government should shake off all kinds of influences of vested interest groups to set a course of mainly exploring for energy resources with the country's own capabilities and institutions.
Gas is one of the few vital natural resources that the over 140 million Bangladeshis-huddled into a small space of only 55,000 square miles-will have to depend on for their survival and furtherance in different fields for some time into the future. This is too precious a resource to be wasted or allowed to be pirated by vested foreign interests. The people of Bangladesh are the owners of this finite resource and no government claiming to represent them can be allowed to fail them in this respect.
A leading daily newspaper of the country headlined it on Thursday that fresh moves have been initiated from Petrobangla that would lead to making impotent the state-owned organization-BAPEX-which has been playing a very commendable role in finding gas reserves in the country, developing the same and preparing the gas for supplies to users. BAPEX and its predecessor bodies have to their credit the discoveries of major gas fields in the country, an almost flawless records in respect of accidents and successfully meeting the energy needs of the users at reasonable prices.
But BAPEX was sought to be subdued by interest groups and the latest in such schemes is the attempt of a section of Petrobangla officials who are pushing to dispossess BAPEX of exploration and production rights over some areas where possibilities of finding gas and petroleum are very high. These areas or blocks were reserved for exploitation by BAPEX alone through government's policy measures about a decade ago. But now senior Petrobangla officials are pushing the government for BAPEX to give up the exclusive control over these blocks by allowing international oil companies (IOCs) to exploit these special zones under joint venture agreements with BAPEX.
Gas is like the life-blood of the Bangladesh economy in many respects. But the on going processes of gas exploration and production has become controversial from allowing foreign companies to play too important a role in these activities at the cost of the local endeavour . Foreign companies have been ruining gas reserves of the country from careless exploration methods. Huge quantities of gas were wasted from accidents by foreign companies in recent years at Magurchara and Tengratila . Some of these companies are selling gas to Bangladesh in foreign currencies after production from ready-made fields. This is causing more a drain of the country's resources in contrast to whatever gains are there from augmented supply of gas from the operations of these foreign companies.
But BAPEX has a far better record than the foreign companies in successfully exploring for gas and also producing it comparatively cheaper. Its record is an enviable one of finding gas in one out of every three well dug by it. The record of the foreign companies is a poor one in comparison. Besides, BAPEX enjoys a very clean reputation for safe operations. Funds have been withheld from this vital organisation on this or that plea when the opposite should have been the case to build the longer term energy security of the country.
It is nothing difficult for the government to provide BAPEX with the resources that would be required by it to take on gas exploration activities with full vigour. The latest move from Petrobangla to dispossess BAPEX from the ring-fenced reserved blocks which are considered as having the brightest potentials to have gas and oil in them, is justified by the Petrobangla officials as saving costs. They contend that there is not so much resources available to fund the operational costs of BAPEX. But the three gas production companies under Petrobangla pay to the government's exchequer taka 18 billion annually on average. If out of this amount, only 2 billion is given to BAPEX, it can then be fully revitalized and start paying back to the national economy a great deal more than the resources spent on its operations.
BAPEX authorities sought from the government a one time allocation of taka 5 billion to expand its business and help the nation. But this was not provided. But in India, the national oil company ONGG was given 5 billion rupee as one time investment a couple of decades back. Reportedly, this company has transformed into a rupee 300 billion worth company with this lump sum allocation helping to meet the country's energy requirements immensely and cheaply. BAPEX could play a similar role for Bangladesh but remains bogged down by conspiracies expressly designed to ensure its impotent conditions.
The demand for gas in Bangladesh is rising by 7 to 8 per cent annually. This demand could rise even further in the near future and in that case a mismatch between the demand and supply of gas could occur as early as the year 2010. Therefore, it is extremely important to accelerate the rate of exploration and production activities of gas and oil in the onshore areas and these moves need to be spearheaded by the national organisation in the backdrop of accumulated experiences and in the vital national interests. It is exclusively in the off-shore areas where Bangladesh lacks technology and resources to successfully undertake energy exploration that foreign companies will understandably play the main role.
Bangladesh which has had substantial capacities for energy exploration and production within its land territories, was purposefully made into a pathetic case in this area to justify the bringing in of the IOCs. The national organization for exploring and producing energy sources was stripped off its role and esteem in public eyes through cleverly calculated moves. It was decimated by wooing its officials and experts away to the IOCs with promises of fat salaries and perks. Developmental allocations were purposefully denied to it so that it could gradually become disabled in every way. Even the buying of a few rigs had to be put off from non availability of funds. Energy ministers and others in key controlling positions to direct the country's energy policies were allegedly turned into hand maidens of the IOCs through briberies. Some of these cases were only divulged in a face-saving manner under the previous elected government at the fag end of its existence.
But members of the present caretaker government who claim to be crusaders in righting all major wrongs of the past and who are professedly devoted to making safe the country's progress in the vital areas that include exploitation of energy resources and energy planning, it becomes a very serious obligation for them to leave their mark in this sphere on a sustainable basis. They will have to go to the roots of the conspiracies that have already led to the country losing control over a notable part of its energy resources. IOCs now sit astride Bangladesh and claim as their own the very gas in its soil that belong to Bangladesh and its people alone. In the name of investments, they are selling gas produced in Bangladesh to Bangladesh itself. And not only this, Bangladesh has to buy its own gas from them at prices which are much higher than the ones that the state owned bodies of Bangladesh charge various gas users who are supplied gas from wells under the government's ownership and control.
Thus, the mercenary attitude of the foreign companies is obvious. But that is also not unusual. Foreign companies, given the easy opportunity, will understandably look to their own interests. It is up to the people, particularly the government of Bangladesh, to be the ever vigilant and absolutely uncompromising custodian of their best economic interests. They will have none to blame but themselves for failing to rise to the challenge and foiling the designs of interest groups.
BAPEX was not even provided with resources to buy a rig or two to carry out drilling activities. But working under even such serious constraints, BAPEX discovered entirely by its own initiative a big gasfield at Kapasia in Gazipur. The field is estimated to have at least 200 billion cubic feet of gas. BAPEX requires only a reasonable allocation of money to exploit the field and send the produced output of gas to the national gas grid. Another gas field was discovered by BAPEX last year at Mobarakpur in Pabna. But it was reported that only snags in the supply of needed explosives is preventing the carrying out of more exploration activities by BAPEX in this area.
The need to spend about $2 billion at the current rate for fuel oil import certainly is a formidable pressure on the foreign currency reserve and a major unnecessary drain of the country's resources. This drain seems absolutely unjustifiable when the country has local energy available that can be used extensively to much reduce consumption of imported fuel oil. If $ 2 billion can be spent to import and consume fuel oil, then giving a small fraction of this amount to BAPEX will enable it to step up its gas exploration and production ventures. The added gas reserves found by it can then be used up extensively to substantially reduce the dependence on imported fuel oil. Experts say that BAPEX also has the capacity to find large reserves of petroleum in Bangladesh. Petroleum was found at Haripur in Sylhet in the eighties by the predecessor body of BAPEX. But production and further exploration for petroleum was deliberately turned off there . The same experts maintain that there is a conspiracy to purposefully undermine the country's energy sector. The conspiracy needs to be foiled. If this can be done then what such a development will mean for the country's balance of payments and the health of its foreign currency reserves should be obvious.
It is indeed high time for the government to come out of adverse influences and to be decisive in its decision about who should control and exploit the country's energy resources. The national demand at the level of experts and users is for complete national control over energy resources and optimm utilisation of gas in the highest national economic interests. The Bangladesh Paribesh Andolan (BAPA) organized a seminar recently in which it underscored that the government should shake off all kinds of influences of vested interest groups to set a course of mainly exploring for energy resources with the country's own capabilities and institutions.
Gas is one of the few vital natural resources that the over 140 million Bangladeshis-huddled into a small space of only 55,000 square miles-will have to depend on for their survival and furtherance in different fields for some time into the future. This is too precious a resource to be wasted or allowed to be pirated by vested foreign interests. The people of Bangladesh are the owners of this finite resource and no government claiming to represent them can be allowed to fail them in this respect.