Bangladesh has awarded its gas wells in the southern district of Bhola to Russian gas exploration and production company Gazprom.
On Tuesday (Jan 28), state-owned Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) signed an MoU with Gazprom for reserve evaluation work in its Bhola gas wells.
Prime Minister's Energy Affairs Adviser Tawfiq-e-Elahi Chowdhury attended the signing ceremony at the offices of the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla).
Bapex had planned to explore the wells itself but it did not get approval from the government, which cited reasons like, speedy exploration and technical incapacities of the state-owned exploration company.
A second MoU has been also signed over strategic partnership between Petrobangla and Gazprom, allowing the Russian company off-shore and on-shore exploration upon agreed terms.
Experts, however, say the deal will allow Gazprom to sign off-shore and on-shore exploration deals with Petrobangla without any tender process.
The first natural gas reserve in Bhola was discovered in 1995 -- the Shahbazpur gas field, which produces around 35 million cubic feet each day, according to BAPEX. The reserves of this field are estimated at 35 billion cft.
The second reserve, named Bhola North, was discovered in 2017 about 35 km east of Shahbazpur and is estimated to have 700 billion cft of reserves.
Speaking to the media after the signing, PM's Energy Adviser Chowdhury said state-owned BAPEX was capable of the drilling but it would be "time consuming".
"BAPEX is now capable than ever. Four more rigs have been added during this administration's term. We are not saying they are not capable, but it would be time consuming," he said.
The move to award Gazprom the gas fields came as Bangladesh needs "access to fuel fast for its development", Chowdhury said before adding the Russian company have the technical capabilities for speedy exploration and drilling.
Energy expert Badrul Imam, however, disagreed with the PM's adviser over BAPEX's capabilities.
"BAPEX is contributing some 10 cft gas everyday to the national grid from its eight gas fields. It has the proper manpower for drilling as well as does not lack funds," he told Bangla Tribune.
According to the Dhaka University Geology professor, the state would have saved money if it went for the drilling and exploration, which would have also benefited BAPEX. "It would be way more expensive if the job is awarded to a foreign company," he said.
Gazprom had built 17 exploratory and development wells in seven fields of three state-owned companies of Bangladesh – BAPEX, Bangladesh Gas Fields Company Ltd, and Sylhet Gas Fields Ltd.
In the first phase starting in 2013, it designed and built 10 wells – four wells of Titas, two wells of Shahbazpur, and one well each of Rashidpur, Semutang, Begumganj and Srikail.
Since September 2015, Gazprom built seven more wells, including Shabajpur East-1 and Bheduriya of Bhola under two supplementary agreements with BAPEX, Bangladesh Gas Fields Company Ltd, and Sylhet Gas Fields Ltd.
The maximum total production rate of the Gazprom-explored wells was 5.118 million cubic-metre, which is about 10 percent of the total gas output in Bangladesh.