Experts against onshore gas exploration by IOCs

Experts have urged the government to immediately shelve its plan to allow international oil companies (IOCs) a chance to explore onshore gas, saying the proposed move will be ‘suicidal’. At a protest meeting held at the Centre for Advanced Studies in Dhaka University, Dr Badrul Imam, Professor at the Department of Geology, said that the government doesn’t need to invite IOCs to explore onshore gas ‘at all’. Prof Imam, an expert on petroleum geology observed that the government's usual excuse of the lack of efficient manpower and proper budget was misplaced. “The gas development fund has nearly Tk 6,000 crore and the state-owned Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) has enough expertise to carry on exploration onshore,” said Dr Imam.
“So, inviting IOCs for onshore exploration is illogical. For offshore exploration, there is at least a logic that we don’t have the expertise. But for onshore exploration, there is absolutely no logic to award the contract to foreign companies,” he said. Prof Imam further noted that gas and oil are the country's assets and that Bangladesh would risk losing over half the gas or oil being found, if exploration is conducted through the IOCs. “On the other hand, if the exploration work is conducted through the state-owned Bapex, then the country gets the whole ownership of the oil and gas,” he said. During the 90s, the exploration work by the Bapex was curtailed and the country gave exploration opportunities to a number of foreign companies. “Ironically, all through the 80s, the success rate of exploration by the Bapex was heavy but still it was systematically sidelined without any apparent reason,” he noted.
Under the production sharing contract (PSC), the IOCs were awarded the licence for exploration of gas blocks of Comilla and Sylhet including Block-12, 13, 14 and 9. These, according to Dr Imam, were blocks with maximum potential. “At the same time, Bapex was given the duty of literally running a fool’s errand on some barren fields,” he said.
Gas production by the IOCs has seen a significant increase since 2000. The share of local companies in the total gas stood at 68 per cent in 2005, with IOCs constituting the remaining share of 32 per cent. Ten years on, the share stands at 44 per cent for local companies and 56 per cent for IOCs.
Prof Dr Shamsul Alam, Dean of the Faculty of Engineering at Daffodil University and Energy Advisor, Consumers Association of Bangladesh (CAB), said prices of electricity have already increased manifold.
“Our power plants rely heavily on gas. If we give IOCs our gas fields, the prices of electricity will see a gradual rise in the future. So, instead of giving the IOCs the country’s gas fields, the government should increase the capacity and the capability of the Bapex, so that we can become self-sustainable in the energy sector,” he observed.
Prof Anu Muhammad, Professor of Economics at Jahangirnagar University said that the protest against giving onshore gas blocks to IOCs was not just for the sake of protesting. “Behind our ‘no’ to IOCs, there is a ‘yes’ for our local companies. We want to strengthen our local companies like Bapex because if we can’t do so, the country will loose most of its valuable resources to foreign companies,” he noted.
Condemning the common claim that Bangladesh lacks the capital and resources to carry out exploration work, Prof Muhammad said it wasn't the case as there was enough money in the gas development fund.
Commenting on the aspect of expertise and resources, he said that Malaysian Petronas was formed at the same time when Petrobangla was formed. “Now, Petronas has become the torch bearer of Malaysian progress and Petrobangal has only become more controversial,” he observed.
Prof MM Akash, Professor of Economics at Dhaka University said that giving onshore licenses to IOCs for exploration did not make sense from an economic perspective. “If three wells are dug, there is a chance that gas will be found in one. The cost of digging three wells is Tk 600 crore. If gas is found in one well, it will worth at least Tk 35,000 crore. This is almost 600 per cent return on investment and our Bapex is capable of achieving that,” he said.
The discussion was moderated by Rebayet Ferdous, Associate Professor at the Department of Journalism and Mass Communication. A K Monwaruddin Ahmed, Professor of Economics, Dhaka University, Dr Azizur Rahman, Professor of Psychology at Dhaka University and Dr Sayed Humyaun Akhter, Chairman of the Department of Geology were also present at the occasion.

 

Experts against onshore gas exploration by IOCs

Experts have urged the government to immediately shelve its plan to allow international oil companies (IOCs) a chance to explore onshore gas, saying the proposed move will be suicidal. At a protest meeting held at the Centre for Advanced Studies in Dhaka University, Dr Badrul Imam, Professor at the Department of Geology, said that the government doesnt need to invite IOCs to explore onshore gas at all. Prof Imam, an expert on petroleum geology observed that the governments usual excuse of the lack of efficient manpower and proper budget was misplaced. The gas development fund has nearly Tk 6,000 crore and the state-owned Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) has enough expertise to carry on exploration onshore, said Dr Imam. So, inviting IOCs for onshore exploration is illogical. For offshore exploration, there is at least a logic that we dont have the expertise. But for onshore exploration, there is absolutely no logic to award the contract to foreign companies, he said. Prof Imam further noted that gas and oil are the countrys assets and that Bangladesh would risk losing over half the gas or oil being found, if exploration is conducted through the IOCs. On the other hand, if the exploration work is conducted through the state-owned Bapex, then the country gets the whole ownership of the oil and gas, he said. During the 90s, the exploration work by the Bapex was curtailed and the country gave exploration opportunities to a number of foreign companies. Ironically, all through the 80s, the success rate of exploration by the Bapex was heavy but still it was systematically sidelined without any apparent reason, he noted. Under the production sharing contract (PSC), the IOCs were awarded the licence for exploration of gas blocks of Comilla and Sylhet including Block-12, 13, 14 and 9. These, according to Dr Imam, were blocks with maximum potential. At the same time, Bapex was given the duty of literally running a fools errand on some barren fields, he said. Gas production by the IOCs has seen a significant increase since 2000. The share of local companies in the total gas stood at 68 per cent in 2005, with IOCs constituting the remaining share of 32 per cent. Ten years on, the share stands at 44 per cent for local companies and 56 per cent for IOCs. Prof Dr Shamsul Alam, Dean of the Faculty of Engineering at Daffodil University and Energy Advisor, Consumers Association of Bangladesh (CAB), said prices of electricity have already increased manifold. Our power plants rely heavily on gas. If we give IOCs our gas fields, the prices of electricity will see a gradual rise in the future. So, instead of giving the IOCs the countrys gas fields, the government should increase the capacity and the capability of the Bapex, so that we can become self-sustainable in the energy sector, he observed. Prof Anu Muhammad, Professor of Economics at Jahangirnagar University said that the protest against giving onshore gas blocks to IOCs was not just for the sake of protesting. Behind our no to IOCs, there is a yes for our local companies. We want to strengthen our local companies like Bapex because if we cant do so, the country will loose most of its valuable resources to foreign companies, he noted. Condemning the common claim that Bangladesh lacks the capital and resources to carry out exploration work, Prof Muhammad said it wasnt the case as there was enough money in the gas development fund. Commenting on the aspect of expertise and resources, he said that Malaysian Petronas was formed at the same time when Petrobangla was formed. Now, Petronas has become the torch bearer of Malaysian progress and Petrobangal has only become more controversial, he observed. Prof MM Akash, Professor of Economics at Dhaka University said that giving onshore licenses to IOCs for exploration did not make sense from an economic perspective. If three wells are dug, there is a chance that gas will be found in one. The cost of digging three wells is Tk 600 crore. If gas is found in one well, it will worth at least Tk 35,000 crore. This is almost 600 per cent return on investment and our Bapex is capable of achieving that, he said. The discussion was moderated by Rebayet Ferdous, Associate Professor at the Department of Journalism and Mass Communication. A K Monwaruddin Ahmed, Professor of Economics, Dhaka University, Dr Azizur Rahman, Professor of Psychology at Dhaka University and Dr Sayed Humyaun Akhter, Chairman of the Department of Geology were also present at the occasion.