Chevron plan to wind up Bangladesh business

Govt pegs asset value at $1b

State-run oil, gas and mineral resources corporation Petrobangla has primarily assessed the natural gas assets of Chevron in Bangladesh at around USD 1 billion. Chevron is hoping to sell these assets to international oil companies for an amount of USD 2 billion.
Petrobangla sources said talks between the government and Chevron to buy the three gas fields at Bibiyana, Jalalabad and Moulvibazar have been going on, but the results are uncertain. On Tuesday, Chevron Bangladesh president Kevin Lyon met Petrobangla chairman Istiaq Ahmed to discuss some issues.
“We discussed the issue of asset sale, but did not get any positive response yet. They told us that Chevron’s head office has not yet delivered any message for Petrobangla,” Ahmed said. Petrobangla is coordinating the issue with the US giant on behalf of the Bangladesh government.
According to a recent report in the international media, Chevron Corp. was keen on divesting assets to counter an energy-price slump. It was reportedly seeking about USD 2 billion from the sale of its natural gas assets in Bangladesh. Following the report, Chevron’s local spokesman in Bangladesh told the Independent: “We can confirm that Chevron has been in commercial discussions about our interests in Bangladesh. At this stage, no decision has been made to sell our interests. We’ll only proceed if we can realize attractive value for Chevron.”  Chevron is operating the three gas fields, which are under block number 14 under the Production Sharing Contract (PSC). According to a Petrobangla official, Bibiyana is the biggest among the three fields with four trillion cubic feet (TCF) of proven gas in 2007. The field has produced 2.6 TCF over the past nine years from 2007 till July 2016. The remaining reserve is 1.4 TCF of gas.
As per the PSC, out of 1.4 TCF, Chevron’s share is about 500 billion cubic feet. The Moulvibazar field does not have any significant amount of gas and produces only 30 MMCF of gas per day. It is also going to dry up within a few years. The Jalalabad gas field keeps 500BCF gas and Chevron’s share is 100BCF.
Petrobangla officials said Chevron’s interim share in Bangladesh’s total amount of gas for them would be 600BCF with a value of nearly USD 1.3 billion, calculating per unit of gas price as USD 2.76, which Petrobangla pays to them.  
An official said as per as the PSC, Chevron would get the amount of USD 1.3 billion if it continues operating for next 13 years. But the current value is about USD 1 billion. In addition, the Magurchhara blowout compensation issue has also not been resolved so far. On the other hand,   audit objections relating to millions of dollars have remained outstanding. These issues should be kept in mind before making any deals, said an energy expert.
Petrobangla’s chairman said, “To access the value of Chevron gas officially, the Bangladesh Gas Fields Limited (BGFCL) is going to appoint a consultant. We will then finally inform the government of the value.” Bibiyana field is one of the biggest in the country and produces 1200MMCF of gas per day. The Bibiyana field was discovered in 1998 by US oil company Occidental.
Last year, the US oil giant in the country had submitted an assessment report on Bibiyana gas field to Petrobangla, saying that the new reserve had increased to about 7 TCF. But the government has not accepted the report because the well head pressure was decreasing day by day. The Jalalabad gas field was discovered in 1989, and the then BNP government had handed over the field to Occidental “without any reason”, officials said.
A senior government official said, “During the joint management meeting last week, one of the members asked the Chevron Bangladesh chief to get the updated status of the company’s asset sale in Bangladesh. The Chevron official told the meeting that he the oil major’s head office was dealing with the issue”.  Sources said that after the news of asset sale in Bangladesh, the Chevron local office is facing some problems.

 

 

Chevron plan to wind up Bangladesh business

Govt pegs asset value at $1b

State-run oil, gas and mineral resources corporation Petrobangla has primarily assessed the natural gas assets of Chevron in Bangladesh at around USD 1 billion. Chevron is hoping to sell these assets to international oil companies for an amount of USD 2 billion. Petrobangla sources said talks between the government and Chevron to buy the three gas fields at Bibiyana, Jalalabad and Moulvibazar have been going on, but the results are uncertain. On Tuesday, Chevron Bangladesh president Kevin Lyon met Petrobangla chairman Istiaq Ahmed to discuss some issues. We discussed the issue of asset sale, but did not get any positive response yet. They told us that Chevrons head office has not yet delivered any message for Petrobangla, Ahmed said. Petrobangla is coordinating the issue with the US giant on behalf of the Bangladesh government. According to a recent report in the international media, Chevron Corp. was keen on divesting assets to counter an energy-price slump. It was reportedly seeking about USD 2 billion from the sale of its natural gas assets in Bangladesh. Following the report, Chevrons local spokesman in Bangladesh told the Independent: We can confirm that Chevron has been in commercial discussions about our interests in Bangladesh. At this stage, no decision has been made to sell our interests. Well only proceed if we can realize attractive value for Chevron. Chevron is operating the three gas fields, which are under block number 14 under the Production Sharing Contract (PSC). According to a Petrobangla official, Bibiyana is the biggest among the three fields with four trillion cubic feet (TCF) of proven gas in 2007. The field has produced 2.6 TCF over the past nine years from 2007 till July 2016. The remaining reserve is 1.4 TCF of gas. As per the PSC, out of 1.4 TCF, Chevrons share is about 500 billion cubic feet. The Moulvibazar field does not have any significant amount of gas and produces only 30 MMCF of gas per day. It is also going to dry up within a few years. The Jalalabad gas field keeps 500BCF gas and Chevrons share is 100BCF. Petrobangla officials said Chevrons interim share in Bangladeshs total amount of gas for them would be 600BCF with a value of nearly USD 1.3 billion, calculating per unit of gas price as USD 2.76, which Petrobangla pays to them. An official said as per as the PSC, Chevron would get the amount of USD 1.3 billion if it continues operating for next 13 years. But the current value is about USD 1 billion. In addition, the Magurchhara blowout compensation issue has also not been resolved so far. On the other hand, audit objections relating to millions of dollars have remained outstanding. These issues should be kept in mind before making any deals, said an energy expert. Petrobanglas chairman said, To access the value of Chevron gas officially, the Bangladesh Gas Fields Limited (BGFCL) is going to appoint a consultant. We will then finally inform the government of the value. Bibiyana field is one of the biggest in the country and produces 1200MMCF of gas per day. The Bibiyana field was discovered in 1998 by US oil company Occidental. Last year, the US oil giant in the country had submitted an assessment report on Bibiyana gas field to Petrobangla, saying that the new reserve had increased to about 7 TCF. But the government has not accepted the report because the well head pressure was decreasing day by day. The Jalalabad gas field was discovered in 1989, and the then BNP government had handed over the field to Occidental without any reason, officials said. A senior government official said, During the joint management meeting last week, one of the members asked the Chevron Bangladesh chief to get the updated status of the companys asset sale in Bangladesh. The Chevron official told the meeting that he the oil majors head office was dealing with the issue. Sources said that after the news of asset sale in Bangladesh, the Chevron local office is facing some problems.