08 Feb 2017, 00:16:31
Move on gas exploration in Bay
Indian co goes for drilling
M Azizur Rahman
An Indian company will drill an exploratory well in a shallow offshore block in the Bay of Bengal to discover hydrocarbons, on terms that allow third-party sale.
Officials said buoyed by findings of preliminary search, ONGC Videsh Ltd (OVL) has moved to drill the well near Moheshkhali under shallow-depth gas block SS-09.
The Indian firm drew encouragement from the results of two-dimensional (2D) seismic surveys it carried out in two shallow-water bay blocks last year.
"ONGC is set to start the drilling programme within the next several months as it found the 2D survey results encouraging," Petrobangla director for production-sharing contract (PSC) Md Mahbub Sarwar told the FE Tuesday.
Bangladesh currently reels from an acute natural gas crisis while the demand is rising every passing day. The daily average output of the fossil fuel is around 2,700 million cubic feet per day (mmcfd) against a known demand for over 3,300 mmcfd, according to Petrobangla.
The entire natural gas production comes from the country's onshore gas fields alone, as exploration in the bay remains a long way off.
Any fresh discovery of hydrocarbons would boost the country's growing economy significantly, said a senior Petrobangla official.
The officials said the Production Sharing Contracts (PSC's) on blocks SS-04 and SS-09 were signed by the government of Bangladesh, Petrobangla, also known as Bangladesh Oil, Gas & Mineral Corporation, the consortium OVL and OIL India Limited (OIL), and Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) on 17 February 2014.
The OVL is the operator of these two blocks having participating interest of 45 per cent, while OIL holds 45 per cent participatory interest and BAPEX 10 per cent carried-over stake.
Block SS-04 covers an area of 7,269 square kilometres (sq km) and block SS-09 7,026 sq kms. Water depths in both the blocks range from 20-200 metres.
The exploration term for both the blocks consists of eight consecutive contract years comprising five years as initial exploration period and three years as subsequent exploration period.
As per the PSC, OVL is set to conduct 2700 full-fold LKM (line kilometre) 2D seismic data acquisition and processing and one exploratory well in block SS-04 and 2700 LKM 2D seismic data acquisition and processing and two exploratory wells in block SS-09.
The OVL has committed to spending around US$58.4 million for block SS-04 and $86.4 million for block SS-09.
The contractors would be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field.
The firm has already completed around 3100 LKM 2D seismic surveys for both the blocks. It is also carrying out 3,400 LKM 2D surveys in these two blocks.
Wellhead gas prices in Bangladesh are pegged to high-sulphur fuel-oil (HSFO) prices on the international market, while oil prices are determined on the basis of a 'fair market value' as agreed upon by both contractors and state-owned Petrobangla.
The floor price for HSFO has been fixed at $100 per tonne and the ceiling price at $200 per tonne to fix gas price.
The latter works out to around $5.50 per Mcf (1,000 cubic feet) before a 37.5 per cent corporate tax that has to be paid by the contractor.
Other features of the PSC are: (a) the licenceholder will have the right to full repatriation of profits (b) will not be charged any signature bonus or royalty (c) would not need to pay duty for equipment and machinery imported for operations during the exploration, development and production phases (d) will have 100 per cent cost recovery (e) production bonuses.
The contractor can also sell gas to third parties after Petrobangla's first right of refusal.
Bangladesh started facing natural gas crisis in 2009 with the rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, compressed natural gas (CNG) filling stations and households.
Move on gas exploration in Bay
Indian co goes for drilling
M Azizur Rahman
An Indian company will drill an exploratory well in a shallow offshore block in the Bay of Bengal to discover hydrocarbons, on terms that allow third-party sale.
Officials said buoyed by findings of preliminary search, ONGC Videsh Ltd (OVL) has moved to drill the well near Moheshkhali under shallow-depth gas block SS-09.
The Indian firm drew encouragement from the results of two-dimensional (2D) seismic surveys it carried out in two shallow-water bay blocks last year.
"ONGC is set to start the drilling programme within the next several months as it found the 2D survey results encouraging," Petrobangla director for production-sharing contract (PSC) Md Mahbub Sarwar told the FE Tuesday.Bangladesh currently reels from an acute natural gas crisis while the demand is rising every passing day. The daily average output of the fossil fuel is around 2,700 million cubic feet per day (mmcfd) against a known demand for over 3,300 mmcfd, according to Petrobangla.
The entire natural gas production comes from the country's onshore gas fields alone, as exploration in the bay remains a long way off.
Any fresh discovery of hydrocarbons would boost the country's growing economy significantly, said a senior Petrobangla official.
The officials said the Production Sharing Contracts (PSC's) on blocks SS-04 and SS-09 were signed by the government of Bangladesh, Petrobangla, also known as Bangladesh Oil, Gas & Mineral Corporation, the consortium OVL and OIL India Limited (OIL), and Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) on 17 February 2014.
The OVL is the operator of these two blocks having participating interest of 45 per cent, while OIL holds 45 per cent participatory interest and BAPEX 10 per cent carried-over stake.
Block SS-04 covers an area of 7,269 square kilometres (sq km) and block SS-09 7,026 sq kms. Water depths in both the blocks range from 20-200 metres.
The exploration term for both the blocks consists of eight consecutive contract years comprising five years as initial exploration period and three years as subsequent exploration period.
As per the PSC, OVL is set to conduct 2700 full-fold LKM (line kilometre) 2D seismic data acquisition and processing and one exploratory well in block SS-04 and 2700 LKM 2D seismic data acquisition and processing and two exploratory wells in block SS-09.
The OVL has committed to spending around US$58.4 million for block SS-04 and $86.4 million for block SS-09.
The contractors would be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field.
The firm has already completed around 3100 LKM 2D seismic surveys for both the blocks. It is also carrying out 3,400 LKM 2D surveys in these two blocks.
Wellhead gas prices in Bangladesh are pegged to high-sulphur fuel-oil (HSFO) prices on the international market, while oil prices are determined on the basis of a 'fair market value' as agreed upon by both contractors and state-owned Petrobangla.
The floor price for HSFO has been fixed at $100 per tonne and the ceiling price at $200 per tonne to fix gas price.
The latter works out to around $5.50 per Mcf (1,000 cubic feet) before a 37.5 per cent corporate tax that has to be paid by the contractor.
Other features of the PSC are: (a) the licenceholder will have the right to full repatriation of profits (b) will not be charged any signature bonus or royalty (c) would not need to pay duty for equipment and machinery imported for operations during the exploration, development and production phases (d) will have 100 per cent cost recovery (e) production bonuses.
The contractor can also sell gas to third parties after Petrobangla's first right of refusal.
Bangladesh started facing natural gas crisis in 2009 with the rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, compressed natural gas (CNG) filling stations and households.
