Short-term solution to a long-term problem
Sunday, 9 August 2009
THE country badly needs an additional supply of fuel to run its power plants and industries in the backdrop of an ever-widening gap between demand for, and supply of, the same. The natural gas received from the fields operated by international oil companies (IOCs) and the domestic state-owned companies is not adequate even to feed the existing power plants and industries. Implementation of a number of power plants and operation of industrial units in the private sector have been put on hold because of short supply of gas, affecting production and causing sufferings to consumers in general. Allegations have it that the rate of extraction of gas from different fields under the control of domestic and foreign companies, in some cases, is unusually high, leading to fast depletion of their reserves.
The prospect for hitting new gas deposits in both offshore and onshore areas remains uncertain because of delay in taking decisions on awarding contracts to IOCs, among other reasons. The immediate past political government dragged its feet on inviting bids from the IOCs for exploring hydrocarbons in the offshore block. The caretaker government did invite bids but it kept the final decision on the bids pending for an elected government. But meanwhile, the dispute that has surfaced over the demarcation of maritime boundary among three neighbours, Bangladesh, India and Myanmar, has made the situation complicated. So, the government is in a desperate search for new energy sources to keep the wheels of the economy moving. As part of that search, the energy ministry, according to an FE report, has decided to employ IOCs to develop and produce gas from a number of under-explored fields and bids would be floated for the purpose within this month.
However, the mode of involvement of the IOCs would be entirely different this time; there will be no production sharing contracts and the IOCs will be paid in cash by the government for the development of gas fields. The government, reportedly, has been forced to seek the services of IOCs due to the capacity constraints of the state-owned Bapex, the agency responsible for exploration of hydrocarbons. The Petrobangla expects to add, at least, 200 million cubic feet (mmcf) of gas per day from the wells to be dug by the IOCs in the fields now under the ownership of the Bangladesh Gas fields Company Ltd (BGFCL) and the Sylhet Gas Fields Company Ltd. (SGFCL). The government must have done the necessary arithmetic before deciding to employ the IOCs in the job of lifting gas from the already discovered fields.
The latest decision of the government again highlights its desperation to narrow the energy demand-supply gap since it has opted for speeding up the recovery process of the existing gas fields. Such a step would help satisfy the present need but it would bring the no-gas scenario closer than anticipated earlier. The situation demands early awarding of contracts in a transparent manner to the successful bidders for offshore gas exploration, side by side with efforts for expediting the recovery of coal deposits and its befitting use in power generation. The employment of the IOCs to lift gas from existing fields is a short-term solution to a long-term energy problem that the country faces. The government must prove its worth by taking prompt decisions to ensure long-term solutions to this problem.
The prospect for hitting new gas deposits in both offshore and onshore areas remains uncertain because of delay in taking decisions on awarding contracts to IOCs, among other reasons. The immediate past political government dragged its feet on inviting bids from the IOCs for exploring hydrocarbons in the offshore block. The caretaker government did invite bids but it kept the final decision on the bids pending for an elected government. But meanwhile, the dispute that has surfaced over the demarcation of maritime boundary among three neighbours, Bangladesh, India and Myanmar, has made the situation complicated. So, the government is in a desperate search for new energy sources to keep the wheels of the economy moving. As part of that search, the energy ministry, according to an FE report, has decided to employ IOCs to develop and produce gas from a number of under-explored fields and bids would be floated for the purpose within this month.
However, the mode of involvement of the IOCs would be entirely different this time; there will be no production sharing contracts and the IOCs will be paid in cash by the government for the development of gas fields. The government, reportedly, has been forced to seek the services of IOCs due to the capacity constraints of the state-owned Bapex, the agency responsible for exploration of hydrocarbons. The Petrobangla expects to add, at least, 200 million cubic feet (mmcf) of gas per day from the wells to be dug by the IOCs in the fields now under the ownership of the Bangladesh Gas fields Company Ltd (BGFCL) and the Sylhet Gas Fields Company Ltd. (SGFCL). The government must have done the necessary arithmetic before deciding to employ the IOCs in the job of lifting gas from the already discovered fields.
The latest decision of the government again highlights its desperation to narrow the energy demand-supply gap since it has opted for speeding up the recovery process of the existing gas fields. Such a step would help satisfy the present need but it would bring the no-gas scenario closer than anticipated earlier. The situation demands early awarding of contracts in a transparent manner to the successful bidders for offshore gas exploration, side by side with efforts for expediting the recovery of coal deposits and its befitting use in power generation. The employment of the IOCs to lift gas from existing fields is a short-term solution to a long-term energy problem that the country faces. The government must prove its worth by taking prompt decisions to ensure long-term solutions to this problem.