BANGLADESH is paying the cost of inefficiency of two foreign oil companies in conducting offshore oil and gas exploration. Two consecutive press reports detailed out how the govt incurred losses due to wrong Terms of References (ToRs) signed under Production Sharing Contract (PSC) by Petrobangla.
Petrobangla signed a deal with Cairn — the company which discovered the Sangu gas field in 1996 and invested $1.2 billion to set up a drilling station 35 km off Chittagong coast with a high capacity gas processing station onshore. In its best times, the field produced around 160 to 180 million cubic feet a day (mmcfd) of gas for Chittagong region. Later, the company after recovering its investment in full sold it to Australian company Santos with the reserve almost exhausted. Santos tried its best to keep the field operative and proposed the government to allow it to develop the Kutubdia field and install a 50-km pipeline to bring in gas up to the Sangu platform and thus save cost. Petrobangla turned down the proposal and now is paying a huge maintenance cost to keep it fit for future use.
Meanwhile on Sunday, the US oil giant ConocoPhillips announced that it will relinquish two deep-sea blocks 10 and 11 three-and-a-half years after signing the contracts. The company said that a prospect of a reserve of four trillion cubic feet in the blocks was not financially viable for the company. Petrobangla on June 16, 2011, signed two PSCs with ConocoPhillips for oil and gas exploration in two deep sea blocks. A close examination of the ToRs and subsequent development of events only prove that Petrobangla people were no match to the ConocoPhillip’s business profit making strategies. And capitalizing on Petrobangla’s ineptness, the US giant put the country’s energy strength under a virtual threat and in crisis too.
However, Indian company ONGC has been awarded a PSC last year to explore offshore blocks SS-4 and SS-9, which cover the area of former block number 16, the location of the Sangu field. The ONGC’s blocks also include Kutubdia, which was earlier proposed by the Australian firm Santos. Thus, we see that the energy reserves of gas and oil are becoming the business area of the Indians only which cannot be considered as a good policy option.
These two incidents are no doubt eye-openers for the persons concerned with the energy sector. We believe energy-starved Bangladesh cannot be mocked at the whims of foreign profit-mongers leaving the countrymen in much sufferings of paying for extra burdens. Why then should the inexperienced BAPEX exist — it cant even show its prowess in drilling offshore oil-rigs. The government must be prudent enough when selecting the foreign companies considering the national interest. Depending not only on the Indian segment, Petrobangla must be more open to invite other companies to explore gas in the Bay of Bengal. Otherwise, it will have no success of claiming maritime victory which will eventually tarnish the country’s image and make us dependent on emerging hegemonic business powers.
