Chinese oil co submits proposal for developing four CHT gas structures
Sunday, 1 May 2011
M Azizur Rahman
Chinese oil and gas firm Sinopec Shengli Oilfield Services is the lone international firm to submit proposal for developing four onshore gas structures in Chittagong Hill Tracts (CHT) under joint venture with the state-owned Bapex, a top government official said. The Chinese firm has submitted a detailed proposal to explore these four gas structures in Chittagong Hill Tracts, mostly identified as critical for drilling by the Bapex, said the official. The four gas fields where Sinopec has shown interest to develop are Kotia, Joldi, Kafalong and Shitapara and all of these are located in the restive Chittagong Hill Tracts (CHT) region, where a slow-burning insurgency left 2,500 people killed since 1980s. State-owned Bangladesh Petroleum Exploration and Production Company (Bapex) had invited a pool of state-owned international oil companies to develop these fields bypassing a bidding process in January this year. Russia's Gazprom, Thailand's PTTEP, Malaysia's Petronas, India's ONGC, China's CNPC, Sinopec ShengliOilfield Services and CNOOC were among the firms that Bapex had sought proposals from, by April 28, 2011. "Although several firms had communicated with us for developing the four gas structures, only the Chinese Sinopec Shengli submitted a concrete proposal," a senior energy ministry official told the FE Friday. He said Sinopec's proposal will be evaluated and placed before the energy ministry soon. "Once we are convinced with the proposal we will award the Chinese firm the gas fields for exploration," said the official. Russian Gazprom, however, is in talks separately with the government high-ups to get itself involved in Bangladesh's energy sector, he said. Gazprom has already intended to initiate its Bangladesh operation with drilling of five gas wells in October next. It has also shown interest to install two compression stations in Bangladesh gas transmission network, he said. Some foreign firms have also shown interest to explore gas fields in other areas of the country, said the official. The four gas fields put up by Bapex for exploration are located in block 22 in the CHT region and the areas span over 13,900 sq km area. The onshore block was originally awarded to US-based firm United Meridian Corporation (UMC) in February 1997 after the country's first round of international bidding for oil and gas exploration. Then Houston-based Ocean Energy won the rights to explore gas in block 22, after taking over the UMC. But as the company did not drill wells within seven years of its contract, the government took over the block from Ocean Energy in 2006. "Unlike the private firms, the state-owned companies won't be sensitive to conducting exploration in the CHT region," said a senior Bapex official. "Under the existing laws of the land, we can avoid time-consuming tendering procedures if we strike a deal with another state-owned firm," he added. The planned tie-ups will strengthen the Bapex, which produces only 58,000 Mcfday of gas contributing less than three per cent of the overall national gas output of around 1980 million cubic feet per day (mmcfd).
Chinese oil and gas firm Sinopec Shengli Oilfield Services is the lone international firm to submit proposal for developing four onshore gas structures in Chittagong Hill Tracts (CHT) under joint venture with the state-owned Bapex, a top government official said. The Chinese firm has submitted a detailed proposal to explore these four gas structures in Chittagong Hill Tracts, mostly identified as critical for drilling by the Bapex, said the official. The four gas fields where Sinopec has shown interest to develop are Kotia, Joldi, Kafalong and Shitapara and all of these are located in the restive Chittagong Hill Tracts (CHT) region, where a slow-burning insurgency left 2,500 people killed since 1980s. State-owned Bangladesh Petroleum Exploration and Production Company (Bapex) had invited a pool of state-owned international oil companies to develop these fields bypassing a bidding process in January this year. Russia's Gazprom, Thailand's PTTEP, Malaysia's Petronas, India's ONGC, China's CNPC, Sinopec ShengliOilfield Services and CNOOC were among the firms that Bapex had sought proposals from, by April 28, 2011. "Although several firms had communicated with us for developing the four gas structures, only the Chinese Sinopec Shengli submitted a concrete proposal," a senior energy ministry official told the FE Friday. He said Sinopec's proposal will be evaluated and placed before the energy ministry soon. "Once we are convinced with the proposal we will award the Chinese firm the gas fields for exploration," said the official. Russian Gazprom, however, is in talks separately with the government high-ups to get itself involved in Bangladesh's energy sector, he said. Gazprom has already intended to initiate its Bangladesh operation with drilling of five gas wells in October next. It has also shown interest to install two compression stations in Bangladesh gas transmission network, he said. Some foreign firms have also shown interest to explore gas fields in other areas of the country, said the official. The four gas fields put up by Bapex for exploration are located in block 22 in the CHT region and the areas span over 13,900 sq km area. The onshore block was originally awarded to US-based firm United Meridian Corporation (UMC) in February 1997 after the country's first round of international bidding for oil and gas exploration. Then Houston-based Ocean Energy won the rights to explore gas in block 22, after taking over the UMC. But as the company did not drill wells within seven years of its contract, the government took over the block from Ocean Energy in 2006. "Unlike the private firms, the state-owned companies won't be sensitive to conducting exploration in the CHT region," said a senior Bapex official. "Under the existing laws of the land, we can avoid time-consuming tendering procedures if we strike a deal with another state-owned firm," he added. The planned tie-ups will strengthen the Bapex, which produces only 58,000 Mcfday of gas contributing less than three per cent of the overall national gas output of around 1980 million cubic feet per day (mmcfd).