International Oil Companies (IOCs) did not respond positively to few rounds of initiatives taken in the past for oil and gas exploration in the offshore, following resolution of maritime boundary disputes of the Bay of Bengal with Myanmar and India. Petrobangla is now taking initiative for a new bidding round. I do not think the IOCs will be encouraged for bidding unless we can prepare and present an exclusive database of information with the bid package through conducting multi-client surveys. Major Md. Muqtadir Ali (Retd), former Chairman of Petrobangla, said this in an exclusive interview with Energy & Power Editor Mollah Amzad Hossain.
Bangladesh is now gradually becoming a net primary fuel importing country. Many observe that failure in adopting appropriate policy and strategy for own coal exploration and exploitation has created this situation. What are your views?
The prospect of finding major new gas structure in Bangladesh onshore area is not very bright. We have already availed low-hanging fruits in the eastern region. Not much encouraging lead or prospects could be found in intensive 2D and 3D seismic surveys conducted over the past few years. Exploration wells at Pabna and Kushtia also did not yield any positive dividend. It appears that the prospect for finding new gas resource in this region is bleak.
But there are possibilities in deeper zones and greater Chittagong Hill tracts area. However, for confirming that, more surveys must be conducted in the region. On the other hand, we must create an extensive database of geological, geo-physical and other related information of Bangladesh offshore area. The IOCs may be interested in making risks investments in our country if they find this attractive on review and evaluation of the data packages.
Now let me talk about coal. It is now almost impossible to explore and exploit coal with own investment as availability of finance from development partners on coal is totally zero. We must review afresh the contracts already there with private companies for coal resource development and give them green signals for going ahead after necessary amendments protecting the national interests if agreed . Side by side we should also encourage fresh private sector investment. Discovered coal resource if effectively explored and utilize we can generate 10,000 MW of power for 40 years. The growing global consciousness about coal-related emissions would make extraction of our coal extremely challenging if decision for mining our coal is not taken immediately.
But the reserve and potential resource of our own primary fuel resource are not infinite. Proven reserve of our gas is depleting. As we need energy to keep the pace of development of the country and future development as well , Import of Liquefied Natural Gas (LNG) is a right decision.
What should be done for expediting our initiatives for petroleum exploration?
A reliable database of information is a pre-requisite for any kind of exploration activities. Therefore, intensive survey must be carried out to enhance the possibility of availability of hydrocarbon in the country. An IOC will only be interested if they find the data are perspective and have potential structures. Therefore, we must give priorities to deeper layers/zones and the region of greater Chittagong Hill Tracts alongside the offshore areas of the Bay of Bengal. Offshore bidding without any reliable data and information package acquired through required surveys may not attract major IOCs for risking huge investments.
The government is preparing for inviting fresh round of PSC bidding for offshore. Should they limit this invitation to offshore area only or include onshore frontier areas as well?
There is no other option left now but going for offshore bidding for oil and gas exploration. But all the required preparations have not been completed yet. Very essential contract for multi-client surveys could not be concluded in last 3 years. In my opinion, this has happened due to motivated intention of serving the cause of a particular bidder over national interest. Fresh PSC bidding should be invited for offshore and onshore at the same time after packaging reliable data and information through conducting extensive surveys.
Many allege now that the BAPEX only strategy in the offshore area is among the main reasons for not achieving notable success in exploration in the onshore area. Do you think BAPEX is competent enough for discharging exclusive responsibility for onshore exploration?
Oil and gas exploration are always a risky investment. Without the financial allocation from the Government of Bangladesh, BAPEX would not be in position to undertake any exploration activities and as such BAPEX does not have flexibility as well as freedom of work. Though BAPEX is a company under Companies Act-1994, but it has to rely on Petrobangla and Energy and Mineral Resources Division (EMRD) for almost all and every decision on investment. If we really mean BAPEX to undertake exploration activities, resource allocation and a policy must be framed for BAPEX so that it can undertake exploration activities and decision by BAPEX itself.
Now a days, crude oil price in global market is in the lower side. In such a situation, I have reasonable doubt that PSC bidding for engaging IOCs for exploration in our onshore areas would attract IOCs at the present level of gas price.
Some experts are of the opinion that for exploration in the deeper prospect/ high pressure zones and frontier areas in the Western region gas price applicable for shallow offshore blocks can be offered in the PSC documents. What are your views?
I have already mentioned about the potential for finding new gas in deeper prospects. The western region has not such possibilities. As the country has already started importing LNG at the international price or agreed price , I would suggest offering equal price of LNG for the IOC or at least to offer the rates of gas price applicable for shallow offshore for attracting IOCs. Exploration is a must, otherwise, we will never know whether we have any potential of hydrocarbons yet to be discovered and how much is that.
Bangladesh is the first country in the region starting exploration for oil. But unfortunately Bangladesh is lagging way behind. Why it happened? What do you think Bangladesh should do now for expediting exploration activities?
Please note that we do not have reliable packages of data and information acquired through extensive surveys for carrying out exploration activities. The data package available with Petrobangla is not that much enough for attracting IOCs. Petrobangla must acquire data and information through Seismic Survey for providing to the interested IOCs. For efficient performance you need to have efficient and knowledgeable working force. Unfortunately, due to absence of regular recruitments, Petrobangla and its companies are not having professional expertise. Moreover, excessive bureaucratic control is also hindering the efficient running of the companies. Expected benefits from exploration activities cannot be achieved without enabling work environment in Petrobangla and its companies.
Gas price increase, restoration of gas export provision keeping first right of refusal preserved with Petrobangla and some other fiscal and financial incentives have been incorporated in the approved updated model PSC for offshore exploration. Do you think these would encourage IOCs for bidding?
Significant positive changes have been made in new approved model PSC. Of course it looks much more attractive now. But mere PSC document may not attract major IOCs. Smaller companies may come but whether they will stay at all and how long they would continue cannot be predicted. Expected success in offshore bidding would not be achieved without providing reliable data package of relevant information through multi-client surveys.
Bangladesh has long experience of working in PSC. But now, the entire energy sector is suffering from crisis of competent manpower. Do you think Petrobangla now can effectively monitor works of major IOCs?
Please note that experienced and competent manpower are retiring every year on completion of the service tenure, but continuous recruitment is not there The process of enrollment of fresh qualified manpower and enhancing their skills through planned training could not be done in a planned manner. Petrobangla has huge crisis of skilled manpower. It will not be possible to redress the situation unless a comprehensive implementation plan is immediately launched for recruiting qualified manpower and enhancing their skills through very focused and effective training program.
There are allegations that Petrobangla and its companies are not being allowed to operate independently. Do you think bureaucratic tangles are hindering oil and gas exploration?
All the activities of oil and gas sector are now in the realm of syndication. In the name of monitoring, the administrative ministry is taking all decisions. As a result, the corporation is losing its dynamism and momentum. It is definitely impeding oil and gas exploration. According to company act 1994, the company’s board of directors reserves the rights and authorities for taking any and all decisions about the company’s operation. Unfortunately, all the decisions are being taken either by Petrobangla or by the administrative ministry. Consequently, the entire sector has become stagnant in stalemate situation. The crisis would deepen further if this situation cannot be overcome soon. I would suggest forming the Board of Directors of the companies with Industry Expertise personnel.
What Bangladesh should do now for developing the coal resource?
I have mentioned already that investment of private sector must be facilitated. Decision for this must be taken as soon as possible based on purely technical and commercial consideration only after getting rid of political perspective. There is not much time left for pondering. Growing global consciousness against mining of coal would make it extremely challenging for Bangladesh to exploit the coal reserve if business as usual strategy continues.
We must bear in mind that domestic coal will considerably ease the stress of imported coal obligations. The decision must be taken now without any further delay.
The capacity for LNG import is now 1000 MMCFD. It will progressively increase from 2023. What are your observations?
Bangladesh would require sustainable supply of energy for reaching the level of developed nations. There is no option but going for imported energy if there is not enough local fuel. Already gas crisis is there in the country. In the summer all the fertilizer plants are kept shutdown and again these are brought into stream in the winter. With the import of LNG, some relief is sighted .But gradual depletion of the own gas fields, in coming days country will have to import more LNG to keep the stream on. As the LNG price is relatively higher than own gas, therefore, we must set priority for usage of gas and new gas connection. Value addition must be the criteria. We must keep in mind that benefits of US$ 8 billion can be derived from using US$ 4 billion worth of LNG. On the other hand, the export basket must also be expanded for reducing stress of import bills. Otherwise, the energy sector would push Bangladesh economy towards crisis.
The priority of Bangabandhu-led Bangladesh government was optimum use of own energy resources for economic development. But Awami League now has taken policy of imported fuel dependency drifting away from Bangabandhu doctrine. What is the way out now?
“Human resource is the means and end of all development”. There is no other option but developing capable and competent human resources. Developing human resources of energy sector must get top priority. Bangabandhu had the right realization and that is why he attached highest priority on it. It was not possible without going all out for exploring and exploiting own energy resources. But Petrobangla has moved miles away from it. Lot of training program is being executed every year. But these may be considered shopping expeditions rather than terming training programs. Merely 5-7 days of training cannot create expertise. Training programs for 3/6/12 months long must be planned and systematically executed for right persons at right time and the trained resources must be rightly placed for deriving maximum benefits.
We have entered the LNG era, but we have human resource crisis for this. We must send our officials to the facilities of LNG suppliers for exposure and training. In six months, our officials can develop required expertise. Such officials can make great contributions upon return.
I would suggest that government should follow the vision of Bangabandhu in self-reliant in the energy sector. Government must make a comprehensive plan for achieving Bangabandhu’s self-reliant energy sector vision and execute it in a planned manner.
