Govt told about US cos' plan to take over blocks 17, 18
Wednesday, 25 March 2009
FHM Humayan Kabir
US oil companies Oakland and Rexwood formally informed the government Tuesday about their plan to take over blocks 17 and 18 to produce gas after withdrawal of rights of their three other partners two weeks ago, officials said.
French energy giant Total E&P, Thai company PTTEP and Irish Tullow withdrew their rights from the blocks, most part of which is located in the Bay, due to presence of small gas reserve.
"A team from the US oil companies met us today. They want to re-examine the seismic survey data in a bid to produce gas from the two blocks where natural gas has recently been discovered," a Petrobangla director told the FE Tuesday.
Headed by the vice-president of the US oil company Oakland International LDC Mark R. Clay, a two-member team discussed with the Petrobangla about the new initiative Tuesday.
Total E&P and its partners had conducted two dimensional (2D) and three-dimensional (3D) seismic surveys in 17&18 blocks, situated in southeastern Cox's Bazar and Saint Martin's Island, and found only about 270 billion cubic feet (bcf) of gas reserve.
"We've asked the US companies to submit their detailed plan for producing gas in the blocks. After submission of the plan we will seek government's permission to give them rights," the Petrobangla director said.
He said the company team informed them that they would submit their detailed plan shortly as they wanted to go for reassessing the survey data and drill exploratory wells to confirm the actual reserve.
The US companies have taken the move when the Total, Tullow and PTTEP formally sought withdrawal of their rights on the blocks two weeks ago as they said those structures were not commercially viable for hydrocarbon explorations.
The companies in their withdrawal proposal also said they would need US$617 million in investment to produce gas from the blocks, which would not be cost effective with such less reserve.
The French oil giant had a 30 per cent stake in the two blocks. Irish oil company Tullow had 32 per cent, followed by Thai energy giant PTTEP 30 per cent and US companies Oakland and Rexwood eight per cent stakes in the blocks.
The Petrobangla official said as smaller companies, it could be cost effective for the Oakland and Rexwood to produce gas from the blocks, spreading nearly 19,500 square kilometres area in Cox's Bazar, Saint Martin's island and Teknaf areas.
State-owned Petrobangla offered the two blocks to US joint venture Rexwood-Oakland in January 1997, but the companies did not carry out any exploration work due to poor gas demand in the country during that time.
Later, Tullow bought majority shares from the US companies. In 2006 Tullow sold its 60 per cent stake to Total E&P, which recently sold half of its stake to PTTEP.
The 17 and 18 blocks are also close to Sangu gas field, the country's lone offshore hydrocarbon structure, 90 kilometres southwest of port city of Chittagong.
US oil companies Oakland and Rexwood formally informed the government Tuesday about their plan to take over blocks 17 and 18 to produce gas after withdrawal of rights of their three other partners two weeks ago, officials said.
French energy giant Total E&P, Thai company PTTEP and Irish Tullow withdrew their rights from the blocks, most part of which is located in the Bay, due to presence of small gas reserve.
"A team from the US oil companies met us today. They want to re-examine the seismic survey data in a bid to produce gas from the two blocks where natural gas has recently been discovered," a Petrobangla director told the FE Tuesday.
Headed by the vice-president of the US oil company Oakland International LDC Mark R. Clay, a two-member team discussed with the Petrobangla about the new initiative Tuesday.
Total E&P and its partners had conducted two dimensional (2D) and three-dimensional (3D) seismic surveys in 17&18 blocks, situated in southeastern Cox's Bazar and Saint Martin's Island, and found only about 270 billion cubic feet (bcf) of gas reserve.
"We've asked the US companies to submit their detailed plan for producing gas in the blocks. After submission of the plan we will seek government's permission to give them rights," the Petrobangla director said.
He said the company team informed them that they would submit their detailed plan shortly as they wanted to go for reassessing the survey data and drill exploratory wells to confirm the actual reserve.
The US companies have taken the move when the Total, Tullow and PTTEP formally sought withdrawal of their rights on the blocks two weeks ago as they said those structures were not commercially viable for hydrocarbon explorations.
The companies in their withdrawal proposal also said they would need US$617 million in investment to produce gas from the blocks, which would not be cost effective with such less reserve.
The French oil giant had a 30 per cent stake in the two blocks. Irish oil company Tullow had 32 per cent, followed by Thai energy giant PTTEP 30 per cent and US companies Oakland and Rexwood eight per cent stakes in the blocks.
The Petrobangla official said as smaller companies, it could be cost effective for the Oakland and Rexwood to produce gas from the blocks, spreading nearly 19,500 square kilometres area in Cox's Bazar, Saint Martin's island and Teknaf areas.
State-owned Petrobangla offered the two blocks to US joint venture Rexwood-Oakland in January 1997, but the companies did not carry out any exploration work due to poor gas demand in the country during that time.
Later, Tullow bought majority shares from the US companies. In 2006 Tullow sold its 60 per cent stake to Total E&P, which recently sold half of its stake to PTTEP.
The 17 and 18 blocks are also close to Sangu gas field, the country's lone offshore hydrocarbon structure, 90 kilometres southwest of port city of Chittagong.