PSC approved keeping the provision of exporting gas
The amendment of model Production Sharing Contract (PSC)-2012 has been given approval keeping the provision of export of gas and also increasing the price of gas from 6.50 dollar to 7.25 dollar per thousand cubic feet. In the earlier PSC there was option to increase the price by 2 percent, this time it has been decreased to 1.5 percent.
Regarding export it has been told that first the Petrobangla be approached. If Petrobangla refuses then as second option the gas can be sold to any third party within the country. If interested third party is not found then the concerned company can export the gas extracted from deep sea level.
General Manager (PSC) of Petrobangla Shahnewaj Parvez has confirmed it to bartatwentyfour.com.
This was finalized in the last cabinet meeting. The resolution of the cabinet meeting was finalized. When the Prime Minister will sign it after returning to country then the formalities of the PSC will be completed. Next Petrobangala wants to go to offshore bidding round. However Bapex will have 10 percent share whoever gets the work of the shallow blocks. The objective is that to make the Bapex experienced in extracting oil-gas from sea. However, in deep sea Bapex will not have any sharing.
During public hearing while increasing gas price in last Ramadan Petrobangla chairman Ruhul Amin said that we did not get any response as the gas price was low. So the gas price is being made attractive by amending the model PSC -2012.
But many do not agree with the perception of Petrobangla chairman. Former director of Petrobangla(Mining) Mokbul Elahi Chowdhury told bartatwentyfour.com that ‘this conception, that the foreign companies will come if gas price is increased is not correct. Which is important is that to make the information open about the reserve of our sea. We must make public the primary information about our resource or at fewer prices which might attract the foreign companies.
He further said that when the foreign companies will know about our reserves of oil and gas in the sea then they will rush otherwise none will invest huge money in the unknown sea reserve. We have kept our information under lock and key. So we must take policy decision to get good result. India has less information still many are showing interest to explore their blocks. Because they did no keep it locked.
It may be mentioned here that while making PSC -2008 the draft was opened to all. Then the opinion of the concerned was taken. Then the PSC was finalized after taking public hearing. But in 2012 strict secrecy was maintained while this time the amendment was done in more strict secrecy. According to Energy division and Petrobangla following the model PSC -2012, an agreement was inked with Konoco Phillips. At that time gas price was 4.16 dollar per thousand cubic feet while the gas of Myanmar is 7 dollar.
After resolution of sea boundary disputes with Myanmar and India Bangladesh’s rights on one lakh 19 thousand square kilometer was established in the Bay of Bengal. The land boundary of the Bay of Bengal was divided into 11 shallow and 15 deep sea blocks. We have inked deals on 3 shallow and one deep sea blocks.
Due to exhaustion of gas in the land we are to import LNG at a high price. There is allegation that this crisis arose as we failed to explore oil-gas in due time. We have so far explored 26 gas fields. Of these 101 gas pits are now running of 20 fields.
According to all accounts we are withdrawing one TCF every year while the present reserve is 11 TCF which is likely to be exhausted after 10 years. So it has become mandatory to explore new fields.
It is assumed that Myanmar is withdrawing gas from the side of Bangladesh block so our block is likely to contain good reserve. Moreover the whole eastern region of Bangladesh the gas reserve is good.
But the exploration progress is disappointing despite the reserve position in Sylhet, Hobiganj, B’baria, Cumilla and Bhola.
To make the foreign companies interested soon Multiclaine survey would start in the deep sea blocks. Energy, Power and Mineral Resources State Minister Nasrul Hamid Bipu had told that after Multiclaine survey we would have enough data then the foreign companies will be interested.
A source in the Petrobangla informed that the local gas costs Taka 6 per unit while the imported LNG is costing Taka 39.82 that prompted the government to hike gas price.