Past govts' cavalier role messed up gas digging
Monday, 3 May 2010
M Azizur Rahman
Immature decisions taken by successive governments, dilly-dallying in explorations by foreign firms and donors' reluctance to provide necessary funds have caused the country's unprecedented natural gas crisis, top officials said Sunday.
The country's 'feeble' economy during the late 1990s also led the situation to the 'worst-ever' gas crisis in the recent times, they said.
Despite the closure of five gas-guzzling fertiliser factories, putting halt to new gas connections and introduction of the first-ever staggered holidays in industries, the government is struggling to provide necessary supplies to the consumers.
Power plants having the electricity generation capacity of around 400 megawatts (mw) remained idle due only to gas crisis, coupled with the closure of hundreds of industries hit by gas crisis and also low pressure in factories and households.
The country is now running with a deficit of around 500 million cubic feet (mmcf) of gas daily with its supply hovering around 2,000 mmcf daily.
"The successive governments could not provide real market signals to the oil and gas explorers, especially the international oil companies (IOCs), resulting in slow pace of exploration works in the country since the late 1990s," Professor M Tamim of Bangladesh University of Engineering and Technology (BUET) told the FE Sunday.
Instead, the governments asked for delaying exploration works, he alleged.
"The country's one of the largest gas fields, Bibiyana was discovered in 1999. But it was not before 2004 when the government asked the field operator, the then US firm Unocal, for drilling wells to initiate production from the field," he said as an instance.
Gas supply surplus for a brief period during 1999-2000 had puzzled the then government from taking appropriate decision, said Mr Tamim, also a former adviser to the caretaker government.
During the late 90s the country's overall economy was passing through a transition with the foreign currency reserve hovering around only $1.0 billion, which prompted the IOCs sitting idle.
Petrobangla's payments to IOCs against gas sales were stuck up for over six months due to poor central bank reserve, said an economist.
"Some IOCs abstained from oil and gas exploration for long as they got wrong signal over the gas market growth," Petrobangla top official Md Muqtadir Ali told the FE.
Poor survey results also prompted them to refrain from further exploration and drillings, he said.
Some IOCs also extended deadline for mandatory exploration activities several times on mutual understanding with the government, said Mr Ali, also the former acting chairman of state-owned Petrobangla.
Handing over gas blocks' ownerships, merger or acquisitions of foreign firms also delayed the country's much-needed exploration works, he said.
Sales of entire assets and liabilities by British Shell to Scottish Cairn Energy, Chevron and Texaco's to Canadian Niko Resources, Unocal to Chevron were some of the changes in ownership that took place over the past decade.
Several foreign oil and gas exploration firms including Australian Santos, Thai PTTEP, French Total, South Korea's GS Caltex got involved afresh with the country's hydrocarbon arena in different blocks after purchasing stakes from other foreign firms, Petrobangla officials said.
The IOCs have been awarded only 12 hydrocarbon blocks -- both onshore and offshore -- since gas exploration began in the country in late 1960s.
But they now hold only six blocks having given up the rest.
Professor Anu Muhammad of Jahangir Nagar University 'blamed' the 'dubious' role of the multilateral donor agencies -World Bank and the Asian Development Bank (ADB) - during the 1990s for not providing necessary funds to energy projects.
Setting up of much-needed compression stations at Elenga, Muchai and Ashuganj in the gas transmission lines got delayed ironically as the ADB did not provide necessary funds, Petrobangla sources said.
The ADB recently approved $100 million for two compression stations - Elenga and Ashuganj - whereas it had offered only $55 million for three compression stations several years ago.
Immature decisions taken by successive governments, dilly-dallying in explorations by foreign firms and donors' reluctance to provide necessary funds have caused the country's unprecedented natural gas crisis, top officials said Sunday.
The country's 'feeble' economy during the late 1990s also led the situation to the 'worst-ever' gas crisis in the recent times, they said.
Despite the closure of five gas-guzzling fertiliser factories, putting halt to new gas connections and introduction of the first-ever staggered holidays in industries, the government is struggling to provide necessary supplies to the consumers.
Power plants having the electricity generation capacity of around 400 megawatts (mw) remained idle due only to gas crisis, coupled with the closure of hundreds of industries hit by gas crisis and also low pressure in factories and households.
The country is now running with a deficit of around 500 million cubic feet (mmcf) of gas daily with its supply hovering around 2,000 mmcf daily.
"The successive governments could not provide real market signals to the oil and gas explorers, especially the international oil companies (IOCs), resulting in slow pace of exploration works in the country since the late 1990s," Professor M Tamim of Bangladesh University of Engineering and Technology (BUET) told the FE Sunday.
Instead, the governments asked for delaying exploration works, he alleged.
"The country's one of the largest gas fields, Bibiyana was discovered in 1999. But it was not before 2004 when the government asked the field operator, the then US firm Unocal, for drilling wells to initiate production from the field," he said as an instance.
Gas supply surplus for a brief period during 1999-2000 had puzzled the then government from taking appropriate decision, said Mr Tamim, also a former adviser to the caretaker government.
During the late 90s the country's overall economy was passing through a transition with the foreign currency reserve hovering around only $1.0 billion, which prompted the IOCs sitting idle.
Petrobangla's payments to IOCs against gas sales were stuck up for over six months due to poor central bank reserve, said an economist.
"Some IOCs abstained from oil and gas exploration for long as they got wrong signal over the gas market growth," Petrobangla top official Md Muqtadir Ali told the FE.
Poor survey results also prompted them to refrain from further exploration and drillings, he said.
Some IOCs also extended deadline for mandatory exploration activities several times on mutual understanding with the government, said Mr Ali, also the former acting chairman of state-owned Petrobangla.
Handing over gas blocks' ownerships, merger or acquisitions of foreign firms also delayed the country's much-needed exploration works, he said.
Sales of entire assets and liabilities by British Shell to Scottish Cairn Energy, Chevron and Texaco's to Canadian Niko Resources, Unocal to Chevron were some of the changes in ownership that took place over the past decade.
Several foreign oil and gas exploration firms including Australian Santos, Thai PTTEP, French Total, South Korea's GS Caltex got involved afresh with the country's hydrocarbon arena in different blocks after purchasing stakes from other foreign firms, Petrobangla officials said.
The IOCs have been awarded only 12 hydrocarbon blocks -- both onshore and offshore -- since gas exploration began in the country in late 1960s.
But they now hold only six blocks having given up the rest.
Professor Anu Muhammad of Jahangir Nagar University 'blamed' the 'dubious' role of the multilateral donor agencies -World Bank and the Asian Development Bank (ADB) - during the 1990s for not providing necessary funds to energy projects.
Setting up of much-needed compression stations at Elenga, Muchai and Ashuganj in the gas transmission lines got delayed ironically as the ADB did not provide necessary funds, Petrobangla sources said.
The ADB recently approved $100 million for two compression stations - Elenga and Ashuganj - whereas it had offered only $55 million for three compression stations several years ago.