Energy drives the engine for economic development of a country. Domestically sourced energy reduces the dependence on very costly energy import draining the foreign currency reserve.
This is specially true for Bangladesh which spends a big portion of its national budget to meet its energy need. In Bangladesh the main energy sources are natural gas, imported crude oil, liquefied natural gas (LNG) and coal.
Other minor energy sources are renewable energy like solar, wind and hydro power. Natural gas is fully domestically sourced while need for coal is partly met from within the country.
They are generally used for electricity generation, household need and fertiliser production and some other industrial need. The LNG is mostly used as fuel for vehicles and to meet household need and minor industrial need.
Bangladesh has a limited known reserve of energy sources which will not last long specially considering huge domestic consumption of natural gas and the need is growing exponentially every few years. So there is a critical need to find new reserve to reduce dependency on very costly energy import.
Bangladesh needs to search for oil and gas in deep offshore areas of the Bay of Bengal. The country has very limited known onshore hydrocarbon fields and the dense population distribution and spread of built up areas make onshore hydrocarbon search a difficult process. Still the record of onshore hydrocarbon search effort is quite satisfactory. Bangladesh has vast unexplored offshore hydrocarbon potential but we need initiatives to move forward. I am stating a few reasons as to why we should go for hydrocarbon exploration in the deep sea within our vast economic zone in the Bay of Bengal.
The first reason is geopolitical concerns and it makes the world more unpredictable than ever before. Geopolitical issues could make international oil market more volatile. Among the issues are political instability in Iraq, Libya and Nigeria, new sanctions on Iran, current political situation in Saudi Arabia, blockade of Qatar, and political chaos in Venezuela.
We are also seeing the start of a new cold war involving the big powers which are mostly economic market driven (energy sources included) than ideological unlike in the past. Such issues in major hydrocarbon producing countries and international relations may have an effect on international oil and gas supply chain and their prices.
Secondly, oil production from shale fracking wells is not satisfactory. It is not efficient. Oil produced from shale fracking yields 20-30% less than the predicted production profile. This ultimately increases the production cost of shale fracking oils and may make this higher than the production cost for normal (sand) reservoir wells. International oil companies are now turning back to invest in deep sea for sand reservoir wells.
Thirdly, natural gas consumption is rising and gas sector is growing three times faster than oil. Low domestic gas prices all over the world are driving the use of gas based power generation. Also, major environmental pollution concerning coal-fired power plant are causing many countries to abondon coal in favour of gas and renewable energy. All these will contribute to increase in gas consumption and price hike as the gas sources are not finite.
The fourth reason concerns the LNG. As natural gas consumption increases, it will drive the need for the movement and conversion of LNG. The LNG market is expanding very rapidly all over the world. It is already evident in the phenomenal demand of the Qatari LNG - the largest producer/marketer of the LNG in the world. International energy sectors are now making strategic move on investment in offshore gas exploration and LNG conversion.
In conclusion, as Bangladesh is now becoming a fast growing medium income country, it will need to shift to a high gear for immediate offshore hydrocarbon exploration. This is to meet its growing need for development and to reduce the drain on national budget for very expensive energy import.
It will make our development sustainable. Deep sea drilling operation is expensive but now the drilling cost is almost half than the cost in the past, for a quick turn over, international tender may be invited for offshore hydrocarbon exploration in the Bay of Bengal.
If we look at Myanmar, Thailand and Malaysia, we can see they have made major discoveries of oil and gas in deep sea. In fact, both Myanmar and India are looking for prospecting the Bay of Bengal for hydrocarbon. The Bay of Bengal may become a contested area for energy exploration like the South China sea. We should better take the edge and start sooner than later for both strategic and huge economic reasons.
Rezaul Kabir, is a petroleum geologist and an international oil & gas exploration specialist.