NBR's mysterious silence over Begumganj gas field dev project
Sunday, 17 June 2007
M Azizur Rahman
The fate of the country's first-ever joint venture of the state-owned gas companies worth over Tk 3.0 billion to develop Begumganj gas field is now hanging in balance due to indifference of the National Board of Revenue (NBR).
Sources said after signing a memorandum of understanding (MoU) to develop the Begumganj gas field about six months ago three state-owned gas companies approached the NBR seeking tax holiday facility.
"But the NBR is yet to come up with a positive response," a senior official of the Energy and Mineral Resources Division (EMRD) said.
The NBR is hesitating to extend tax holiday facility to the state-owned companies, but it is extending the similar facility to the international oil and gas companies (IOCs) in their Bangladesh operations for long, he lamented.
Pointing further on the incentives given to IOCs in Bangladesh, a senior Petrobangla official said, apart from enjoying tax holiday facilities the IOCs are receiving payments against sales of natural gas in foreign currencies.
But three state-run gas companies - Bangladesh Gas Fields Company Ltd (BGFCL), Sylhet Gas Fields Ltd (SGFCL) and Bangladesh Petroleum Exploration and Production Company Ltd. (BAPEX) - will sell gas in local currency, which will relief the government of an extra pressure on foreign currencies, he said elaborating the benefit out of the joint venture.
The Petrobangla official said before approaching the NBR the joint venture got approval from the then Prime Minister Khaleda Zia, who was in charge of the Ministry of Power, Energy and Mineral Resources (MPEMR).
As per the MoU signed among the joint venture partners, the Begumganj gas-field's development will be in two phases, each requiring an investment of Tk 1.50 billion.
The joint venture will initially develop the field at an investment of Tk 1.50 billion for gas production.
It will then go for further exploration at an investment of Tk 1.50 billion.
Each of the three companies will have equal shares in the venture, with the BGFCL and the SGFCL chipping in Tk 15.0 million each from their own coffers, while BAPEX will be the working partner.
The joint venture will sell gas to Petrobangla at Tk 50 per unit (1,000 cubit feet), and the transaction will be done in local currency.
Currently, the Petrobangla purchases gas at $ 3.0 per unit (1000 cubic feet) on an average from the international oil and gas companies and at $2.0 per unit from the state-owned gas companies but sells at $1.5 per unit.
Begumganj gas field is the first discovered gas field by the state-owned parent gas company - Petrobangla.
Petrobangla discovered the gas field in 1977 with a proven gas reserve of 50 billion cubic feet (BCF), Petrobangla sources said.
But the energy officials are now optimistic that the reserve could be over 400 BCF.
Sensing its huge potential an IOC, working in Bangladesh, had earlier asked the government to hand over the field to it.
Country's gas production is now hovering around 1650 million cubic feet per day (mmcfd) across the country from 24 gas fields across the country.
Of them the BGFCL is operative in five gas fields - Titas, Bakhrabad, Habiganj and Meghna -and produces around 800 mmcfd of gas.
The SGFCL is also operative in five gas fields - Sylhet, Kailashtila MSTE, Kailashtia, Rashidpur and Beanibazar - and produces around 170 mmcfd of gas.
BAPEX is functional in two gas fields - Salda and Fenchuganj - and produces around 60 mmcfd of gas.
The fate of the country's first-ever joint venture of the state-owned gas companies worth over Tk 3.0 billion to develop Begumganj gas field is now hanging in balance due to indifference of the National Board of Revenue (NBR).
Sources said after signing a memorandum of understanding (MoU) to develop the Begumganj gas field about six months ago three state-owned gas companies approached the NBR seeking tax holiday facility.
"But the NBR is yet to come up with a positive response," a senior official of the Energy and Mineral Resources Division (EMRD) said.
The NBR is hesitating to extend tax holiday facility to the state-owned companies, but it is extending the similar facility to the international oil and gas companies (IOCs) in their Bangladesh operations for long, he lamented.
Pointing further on the incentives given to IOCs in Bangladesh, a senior Petrobangla official said, apart from enjoying tax holiday facilities the IOCs are receiving payments against sales of natural gas in foreign currencies.
But three state-run gas companies - Bangladesh Gas Fields Company Ltd (BGFCL), Sylhet Gas Fields Ltd (SGFCL) and Bangladesh Petroleum Exploration and Production Company Ltd. (BAPEX) - will sell gas in local currency, which will relief the government of an extra pressure on foreign currencies, he said elaborating the benefit out of the joint venture.
The Petrobangla official said before approaching the NBR the joint venture got approval from the then Prime Minister Khaleda Zia, who was in charge of the Ministry of Power, Energy and Mineral Resources (MPEMR).
As per the MoU signed among the joint venture partners, the Begumganj gas-field's development will be in two phases, each requiring an investment of Tk 1.50 billion.
The joint venture will initially develop the field at an investment of Tk 1.50 billion for gas production.
It will then go for further exploration at an investment of Tk 1.50 billion.
Each of the three companies will have equal shares in the venture, with the BGFCL and the SGFCL chipping in Tk 15.0 million each from their own coffers, while BAPEX will be the working partner.
The joint venture will sell gas to Petrobangla at Tk 50 per unit (1,000 cubit feet), and the transaction will be done in local currency.
Currently, the Petrobangla purchases gas at $ 3.0 per unit (1000 cubic feet) on an average from the international oil and gas companies and at $2.0 per unit from the state-owned gas companies but sells at $1.5 per unit.
Begumganj gas field is the first discovered gas field by the state-owned parent gas company - Petrobangla.
Petrobangla discovered the gas field in 1977 with a proven gas reserve of 50 billion cubic feet (BCF), Petrobangla sources said.
But the energy officials are now optimistic that the reserve could be over 400 BCF.
Sensing its huge potential an IOC, working in Bangladesh, had earlier asked the government to hand over the field to it.
Country's gas production is now hovering around 1650 million cubic feet per day (mmcfd) across the country from 24 gas fields across the country.
Of them the BGFCL is operative in five gas fields - Titas, Bakhrabad, Habiganj and Meghna -and produces around 800 mmcfd of gas.
The SGFCL is also operative in five gas fields - Sylhet, Kailashtila MSTE, Kailashtia, Rashidpur and Beanibazar - and produces around 170 mmcfd of gas.
BAPEX is functional in two gas fields - Salda and Fenchuganj - and produces around 60 mmcfd of gas.