Multinational corporations going to expand oil and gas exploration

The government is finally making serious efforts to explore the country's oil and gas reserves. International Oil and Gas Companies (IOCs) with operations in the country are coming forward. The biggest gas producer in Bangladesh, Chevron Corporation, intends to look into other areas. The American company has asked for authorization to begin work on the two new blocks. It has also requested that Bibiana be made larger. Bangladesh Oil, Gas & Mineral Corporation (Petrobangla), a government-owned national oil company of Bangladesh, is taking positive steps on Chevron's plans.

Production Sharing Contract (PSC), which is currently being actively considered by Petrobangla, has been requested to be extended by India's ONGC Videsh Limited, which operates in two blocks in the Bay of Bengal. These details are widely known thanks to reliable sources. Nazmul Ahsan, the chairman of Petrobangla, stated that they have adopted a unique plan for oil and gas exploration in this regard. In this work, foreign businesses have also stepped forward. To investigate new locations, Chevron is in discussions with the overseas businesses. They promised to drill a few new wells.

The size of Bibiana is being expanded: Measures are being taken to expand the size of Bibiana, the largest gas field in the country, which is situated in Block No. 12 onshore. This Chevron-run gas field is situated in Habiganj. Beyond the area covered by the current contract, Chevron will be given access to an additional 60 square kilometers of nearby land. This month, the US-based company will sign the supplemental contract with Petrobangla. In March of next year, Chevron will start drilling wells in the new zone. In Bibiana, two new wells with the names B27 and B28 will be dug and this will be the first transverse drilling of a deep well.

The US-based Unocal discovered the Bibiana gas field in 1998 but later another US oil and gas company Chevron took over the field. In Bibiana, gas extraction commenced in 2007. More than half of the country's entire gas production—between 1300 million and 1400 million cubic feet per day—is being produced in Bibiana by 26 wells. Bibiana’s lease agreement is valid until 2034.

Chevron desires to lease more gas blocks: Blocks 12, 13, and 14 are now under operation in the country by the US-based company. In addition to this, Chevron is negotiating with the government to lease Block 11 and the gas reserves in Chhatak and Rashidpur. Sylhet Gas Fields Company is the owner of the Rashidpur gas field, whereas Bangladesh Petroleum Exploration and Production Company Limited (BAPEX), a Bangladesh government-owned company responsible for petroleum exploration and production, is in charge of Block 11.

In 1960, Pakistan’s Shell Company discovered Rashidpur gas field. In November 2020, BAPEX and Japan's Mitsui Oil Exploration Company (MOECO) agreed to a memorandum of understanding (MoU) for exploration activities in block 11. The Chhatak gas field is the subject of a legal dispute between Bangladesh and the Canadian corporation Niko before a foreign court. Thus, the gas field is not currently under lease. 

Nevertheless, as MOECO has not yet engaged in such extensive exploratory activities in this block, the government wants to lease Block 11 to Chevron. The Japanese corporation must decide on the block by November, according to Petrobangla. The block might then be leased to Chevron in whole or in part. Rashidpur has also been invited to submit a thorough plan. Petrobangla, however, has not yet received a comprehensive bid from Chevron for Rashidpur.

ONGC seeks contract extension: On February 17 in 2014, ONGC of India agreed to a five-year PSC that would end in February 2019 for the Petrobangla shallow-sea SS-04 and SN-09 blocks. The contract was then extended by two years till February 2021, which will expire in February 2023. However, the corporation requested a third extension of time as the search job was not finished.

According to sources, two rounds of tenders were requested to select companies to drill the Titli and Maitri exploratory wells in the two leased blocks. A $110 million offer was made to ONGC, which is double their allocated amount.

***Mohammed Humayun Kabir has rewritten this report in English from its original The Daily Samakal print and online edition.