Santos-Kris JV starts 2D survey in block SS-11

FE Report | Published: January 08, 2015 00:00:00 | Updated: November 30, 2026 06:01:00

The joint venture of Australian Santos and Singaporean KrisEnergy has initiated two-dimensional (2D) seismic survey this week in shallow water block SS-11 to become the maiden operator in the country's water territory in the Bay of Bengal at present, said sources.
French-based geosciences company - CGG - will carry out around 3,000 line kilometer seismic survey for the JV firm at a cost of around US$ 9.76 million.
All types of oil and gas exploration activities inside the Bangladesh territory in the Bay of Bengal remained halted since December 15 last year, after ceasing of operations by the US-based ConocoPhillips in two deep water blocks - DS-08-10 and DS-08-11.
The shallow water block - SS-11 - is highly potential, as it is close to Myanmar's territorial water, where the neighbouring country discovered huge natural gas reserves.
The Santos-Kris JV has committed to drill an exploration well, conduct 1,876 line kilometer 2D seismic survey and 300 sq km 3D survey, and offered a bank guarantee of US$15 million, for the initial five years of exploration.
The JV bidder would require investing around US$ 30-32 million to carry out its work plan under the production sharing contract (PSC) during the initial years.
The contract period for exploration will be eight years in total. The contractor will be allowed to operate and sell oil and gas for 20 years from an oil-field and 25 years from a gas-field.
The price of gas in Bangladesh is pegged to that of high sulfur fuel oil (HSFO) in the international market, while oil prices are determined as a fair market value agreed on by the companies and the state-owned Petrobangla.
The PSC also allows the JV firm the right to full repatriation of profit, and non-payment of any signature bonus or royalty on equipment and machinery imported for exploration, development and production. Companies will also have 100 per cent cost recovery.
The contractor can also sell gas directly to third parties, subject to Petrobangla's right of first refusal. But hydrocarbons produced from the shallow water blocks must be sold in the domestic market, as their export is prohibited under the PSC.
Petrobangla's subsidiary, Bangladesh Petroleum Exploration and Production Company Ltd (Bapex), will have 10 per cent carried interest in the shallow water block.
Currently, Bangladesh is entirely dependent on onshore fields for natural gas output, with current production hovering around 2,460 million cubic feet per day (mmcfd) compared with the demand of more than 3,000 mmcfd.
Australian oil and gas exploration company Santos was the lone operator of the country's lone operational offshore Sangu-11 well in the Bay of Bengal, which was shut permanently on October 1, 2013.
KrisEnergy, that purchased UK-based Tullow Oil's stake at $42.35 million, is the operator of onshore block-9.
KrisEnergy has 30 per cent stake in block 9, where Canadian Niko Resources has 60 per cent stake and Bapex has 10 per cent stake.
The block includes the Bangora gas producing facility and the Lalmai discovery. Bangora gas-field is currently producing around 111 mmcfd, Petrobangla data reveals.
azizjst@yahoo.com