Fresh move to hunt gas in the hills

State-owned Bapex has made a fresh move to explore and develop four onshore gas fields in the hills under joint venture with international oil companies (IOCs) five years after an initial initiative, said officials.
"We are now receiving expression of interests (EoIs) from IOCs to jointly carry out exploration and development works at Patiya, Jaldi, Kasalong and Sitapahar," a senior official of the Bangladesh Petroleum Exploration and Production Company (Bapex) told the FE Wednesday.
He expects effective JV move now to drill and develop the onshore fields to expedite natural gas production to meet a mounting need for the fossil fuel across the country.
"The previous move for establishing a JV with the international oil companies (IOCs) to develop such onshore gas fields was suspended for 'faulty procedure'," said Bapex's geological divisional head Md Mijanur Rahman.
Of the four fields, he said, Patiya was drilled during early 50s, Jaldi in mid-60s and Sitapahar in the late 80s.
"All of them were recorded as encouraging gas shows while Kasalong was ready to be drilled by an IOC," he said.
These prospects are located very close to the industrial gateway as well as port city of Chittagong, which is an assured gas market having gas-transportation infrastructure in place, said the official.
A China-Bangladeshi JV firm will develop four CHT gas structures, located in Block 22 that covers an area of around 13,900 square kilometres.
The onshore block 22 was originally awarded to US-based firm United Meridian Corporation (UMC) in February 1997, following the country's first round of international bidding for oil and gas exploration.
Houston-based Ocean Energy later attained the right to explore hydrocarbons in the block through the UMC takeover.
But the government took over the block from Ocean Energy in 2006 following its failure in conducting committed drilling works within seven years of contract.
Under the previous move initiated in 2010, Bapex was all set to form a JV with Chinese Sinopec Shengli to drill all the four wells.
Sinopec Shengli and local Bapex were set to establish the JV having 70:30 per cent stakes respectively to explore and develop the four onshore gas fields in the hilly region of Chittagong.
Sinopec had agreed to fund the programme while Bapex was to receive 30 per cent of the output or the sales revenue without any upfront investment, said sources.
The Chinese firm, however, had sought right for third-party sale of the gas to be produced after developing the fields.
It had agreed to sell natural gas at $2.70 per Mcf (1,000 cubic feet) while seeking the third-party gas-sale right alongside. Bapex in January 2011 had invited formally several international oil companies to consider developing the four fields, bypassing a bidding process, and selected Sinopec.
After several rounds of negotiations the initiative was jettisoned in 2013.
Until to date, Bapex has inked one 'controversial' JV with Canadian Niko Resources to develop some 'abandoned' onshore gas fields, including Feni and Tengratila, said officials. Gas production and exploration from Niko-operated fields, however, remained suspended following a row relating to payment for gas and compensation for gas-field blowouts.
Bapex was a 'sleeping' partner in Niko-Bapex JV and had a carried-over stake of 20 per cent, while the remaining 80 per cent is of Niko.
Unlike the previous JV with Niko, the state company is interested to be an active partner under the new JV initiative, said one Bapex official.
mazizur.rahman@outlook.com