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‘No fruitful steps in offshore exploration’

As one of the foremost voices of the country’s energy sector, Professor Dr Badrul Imam has long been saying that to stave off the looming energy crisis, there is no option in front of Bangladesh but to go for massive off-shore exploration.

The Dhaka University professor who has a Ph.d in Petroleum Geology also believes that the state owned Bapex has achieved enough expertise to carry on on-shore exploration by itself.

In an exclusive interview with energynewsbd.com Editor Aminur Rahman, this renowned expert talks openly about various issues on the country’s off-shore, on-shore explorations and energy security.

 

energynewsbd.com: The government had earlier floated tender for conducting multi-client seismic survey in the Bay of Bengal and an expert committee of the government had recommended awarding the work to a particular foreign company. Later, the government backtracks from that decision. How do you look into this matter?

Professor Badrul Imam: I personally think that backtracking from that decision is completely illogical; especially the decision was canceled without showing any apparent reason even after the recommendation was made by an expert committee. It will hamper Bangladesh’s offshore exploration activities.

The maritime boundary dispute with the Myanmar government was resolved after the international maritime court gave its verdict in 2012. After that, the Myanmar government started exploring in their off-shore blocks but Bangladesh still lags behind that.

There is no debate that to stave off the current and looming energy crisis, there is no option in front of Bangladesh but to go for off-shore exploration.

energynewsbd.com:  After the maritime boundary dispute was resolved, the neighboring Myanmar signed contract with a number of companies for off-shore exploration. Bangladesh however couldn’t do that as of now? What is your observation regarding that?

Prof Badrul: Myanmar floated some international tender for off-shore exploration in 2013 and started completing the selection process among the interested foreign companies by the first quarter of 2014.

They have signed production sharing contract (PSC) with more than ten foreign companies to conduct exploration works in 20 blocks in the Bay of Bengal. Those companies have already started conducting the exploration works there.

Comparing to that, Bangladesh had been able to engage only two foreign companies through PSC contract to conduct exploration works in three blocks in the last three years. In the rest 23 blocks which comprises more that 80% of the total maritime regions of the country, no activities are going on now.

So, the idea of over praising Bangladesh’s victory in maritime boundary case or delivering grandiloquent speech on blue economy becomes hollow as 80% of the area still remains unexplored.

I believe slow progress in implementing plan, bureaucratic red tape and influence of a certain segment hinders the exploration work in the Bay of Bengal.

energynewsbd.com: The current gas reserve of the country is limited and it will be finished within the next few years. What can the government do to check the imminent crisis?

Prof Badrul: The current gas reserve of the country is lower than the demand and from 2017; the difference between the demand and supply will only increase. Within 2030, the supply of gas will become very limited.

In this regard, the government should take two steps immediately. First, the government should try to increase the amount of exploration works inside the country and try to increase its reserve of gas.

Especially, the government should take immediate steps to conduct exploration works in the off-shore block of the country.

Secondly, the government should focus more on alternative energy of gas. Here by alternative energy, I mean coal. Bangladesh has a very good reserve of coal and the government should formulate appropriate policy to extract that coal and use it.

In Rangpur and Dinajpur regions of the country, there is significant reserves coal and coal mine can be established there to meet up the energy demand of the country. 

Besides, the government can try to import gas from other countries. It can also try to import electricity from Nepal, India and Bhutan. In the past, Bangladesh got the chance to import gas from Myanmar through pipeline but the country didn’t utilize that opportunity.

Bangladesh can be sure of long term supply of gas if it can get included in the plan of importing gas from Iran through the planned tri-nation gas pipeline (IPI) among Iran, Pakistan and India.

energynewsbd.com: Why cannot Bangladesh make foreign companies interested in carrying out exploration work in the Bay of Bengal?

Prof Badrul: No large gas field inside Bangladesh’s maritime boundary has been discovered yet whereas such gas fields are already discovered inside India and Myanmar’s maritime boundary.

Besides, the seismic information of the region in Bangladesh’s maritime boundary is not available. So it becomes hard to attract the foreign companies to carry out exploration work.

Aside from this, the foreign companies demand more lucrative deals in the PSC which lengthen the whole negotiation process.

energynewsbd.com: US based ConcoPhillips had stopped its operation in Bangladeshi parts of Bay of Bengal even after completing the 3D seismic survey as it said that the reserve of gas in block 10 and 11 is not profitable for commercial exploration. Do you think so or you think there might be some other reasons?

Prof Badrul: ConcoPhilips said that it didn’t find exploring in off shore blocks commercially profitable. But for a large company like ConcoPhillips, accepting the challenge during the exploration face is the accepted practice in the energy sector. I don’t know why it staved itself off from that challenge.

However, demanding the increase in price of gas (breaking the contract price) even after signing contract was illogical.

Bangladesh did it right by not accepting that demand. If interested, ConcoPhillips could again come here for exploration works through competitive bidding but if it breaks the contract, then I do not see any reason to cave in into its demand.

"Bangladesh did it right by not accepting that demand. If interested, ConcoPhillips could again come here for exploration works through competitive bidding but if it breaks the contract, then I do not see any reason to cave in into its demand."

energynewsbd.com: As price if oil has fall down in the international market, the international exploration companies (IOCs) are now conducting their exploration works in slow pace under the new price structure. Is it true?

Prof Badrul: The price of oil in international market hasn’t fallen down permanently rather it will be on an upward trend within a few years. The exploration works have slowed down because of the fallen oil price but it is not a permanent phenomenon. Besides, the IOCs are not interested about the oil in Bangladesh; rather those are interested about the gas.

energynewsbd.com: In onshore, the state owned Bapex is conducting the exploration work in sole manner. Recently, Bapex had taken initiative to conduct joint venture exploration works in Chittagong region. Do you think, it will be lucrative for the country?

Prof Badrul: Bapex has proven itself in carrying out exploration work in onshore and it has been successfully operating some gas fields in the mainland. In Chittagong and Chittagong Hill Tracts region, carrying out exploration works is a bit difficult than plain land because of its comparatively geological complex formations.

If Bapex is being tagged along with some foreign companies to carry out exploration work in this region, then it will fasten the exploration process. But I believe that any contract under joint venture should be formed by keeping the national interest intact.

We all know what the country needed to pay because of a faulty joint contract with Niko.

energynewsbd.com: The government mulls to award onshore contract to the IOCs again? What is your opinion about that?

Prof Badrul: As the state owned company is capable of conducting exploration work in the mainland, I believe there is no need of engaging foreign companies here because if we engage a foreign company here, then we have to share the gas with it.

On the other hand, gas found by the state owned company is fully owned by the nation. Irony is, most of the gas-rich regions have already been awarded to the foreign companies. I demand to bring rest of the regions under Bapex.

energynewsbd.com: What are the initiatives taken to strengthen the state owned Bapex?

Prof Badrul: It is true that the Awami League led government had taken several initiatives to strengthen Bapex after it came to the power in 2009. A major problem with the state-owned company however is its shortage of technical manpower.

"It is true that the Awami League led government had taken several initiatives to strengthen Bapex after it came to the power in 2009. A major problem with the state-owned company however is its shortage of technical manpower."

Unfortunately in a recent advertisement for manpower in Bapex the number of position advertised for administrative section was 21 while only 2 positions were advertised for geologist. Yet, the geological division is currently under-staffed and at least 15 positions lay vacant.

Perhaps even more problem on the ground is the bureaucratic way Bapex often tend to run its operation.

For example the case with the present state of drilling in Pabna may be mentioned: The exploration work in Mobarakpur gas well in Sathia upazila in Pabna district was started back in July, 2014.

Ironically, when the prospect of finding gas in that well looked bright, then the drilling pipe in that well got stuck because of complexity.

In terms of technical issue, that incident was not an unusual one and the required step in that regard was to side track the drilling pipe from its previous vertical track and to carry on the drilling.

If there were any private company, it could have immediately started that by hiring a third party but as Bapex, a state owned company, because it is not empowered with such provision. To avail that little service from third party, Bapex needs to go through lengthy steps of bureaucratic tangles.

Months have gone after the incident, but the work still got stuck in red tape. This is how; a lot of projects have failed here.

 

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