Oil
boost for Bangladesh By Syed
Tashfin Chowdhury
DHAKA - Bangladesh,
whose economy is crippled by power outages and
treasury-sapping oil import bills, has discovered
new oil reserves in Sylhet, the country's northern
region.
Bangladesh Petroleum Exploration
Co (Bapex), the exploration unit of state-run
Bangladesh Oil, Gas and Mineral Corp, or
Petrobangla, has discovered 137 million barrels of
oil reserves in two abandoned gas fields of
Kailashtila and Haripur. The total worth of around
the 55 million barrels of extractable oil
discovered in the two fields is around about 425
billion takas (US$5.5 billion).
"Once
produced, this commercially viable oil can offset
the import of oil from foreign sources,"
Petrobangla chairman Mohammad Hossain Mansur told
Asia Times Online. The quality in both reserves is
"light, low in sulfur quality", Reuters reported, citing
Bapex managing director
Mortuza Ahmed Faruq.
Prime Minister Sheikh
Hasina, who is also the energy minister, has
instructed Petrobangla to take "immediate steps"
to tap the oil resources so that production can
begin in a year's time, said Mansur.
Petrobangla said Bapex will soon start
deep drilling into the two fields. Bapex has
proposed to drill four wells in Kailashtila and
three in Haripur, The finds have been made around
15 years after oil was first discovered in the
same area at Haripur.
The development
stems from a three-dimensional (3-D) seismic
survey by Bapex across 1,250 square kilometers in
Kailashtila, Haripur, Rashidpur, Titas and
Bakhrabad last year under a US$20 million project
approved by the government in 2010.
Mansur
is hopeful that "positive results" for oil will
also be found for the Bakhrabad and Titas gas
fields, while "at the Haripur field, 11 million
barrels of oil will be extracted from one of two
layers. We may find oil in the other layer also".
No oil was found at Rashidpur, where gas now
estimated at 1.22 trillion cubic feet (tcf) was
discovered there in September 2011.
More
oil fields could well be found in the Sylhet
basin, Professor Badrul Imam, at the Geology
department of University of Dhaka, told Asia Times
Online. "Structural traps in Kailashtila and
Haripur have resulted in the oil and gas deposit,
in layers. There is a high possibility of similar
structural traps in other fields of Sylhet," he
said.
While oil was discovered at
Kailashtila and Haripur, the latest survey also
indicated that less gas may be produced at the two
fields than previously estimated. Kailashtila may
produce 1.22 tcf, down from 1.90 tcf previously,
and Haripur 310 billion cubic feet (bcf) of gas,
down from 479 bcf, although a new gas zone has
been identified that may have around 223 bcf.
"The earlier findings were erroneous as
these were analyzed from two dimensional seismic
surveys," Mansur told Asia Times Online. "The 3-D
seismic survey data are more accurate." Similar
surveys are to be conducted at other gas fields in
Bangladesh. "We may find even bigger reserves of
oil in these fields," Mansur said.
Oil was
found in Haripur in 1986. According to
Banglapedia, the "field had an in-place oil
reserve of 10 million barrels, from which 6
million barrels were recoverable". International
oil company Scimitar was given the responsibility
to produce oil from the field in 1987. After
producing around 560,000 barrels of oil, Scimitar
halted production in 1994 due to "low pressure"
and later concluded operations in Bangladesh. The
oil field was later abandoned.
Bapex has
previously discovered another oil field at
Kailashtila and oil in Fenchuganj but neither
reserve is yet to be proved "commercially viable".
The projected 55 million barrels that can
be produced from the two new finds is equivalent
of two years supply for Bangladesh, which imports
around 25 million barrels of oil ever year. The
new oil will reduce pressure on Bangladesh's
foreign currency reserves, which have declined to
below $10 billion at times over the past few
months due to increasing import bills.
About $3 billion of the country's $21.7
billion import payments in the eight months
through February were for fuel oils. The overall
trade deficit in the period rose to $5.7 billion
from $4.9 billion in the corresponding period a
year earlier.
A shortage of energy is
driving industrialists to use rental power plants,
driving up fuel import bills. Seventeen at present
in use contribute about a quarter of the country's
total maximum daily power generation of 5,230 MW,
which is still well short of the 6,300 MW demand
reported by Bangladesh Power Development Board
(BPDB) on May 19.
Since 2009, 53 deals for
rental power plant projects, perceived as “quick
solutions” to the country's power crisis, have
been signed, with some still in the process of
being commissioned and others under construction.
The combined power capacity of these deals is
nearly 6,000 MW.
Bangladesh produces gas
sufficient to meet about around 60% of forecast
demand at the end of this year, while its
considerable coal reserves are not fully exploited
due the failure to approve a national coal policy,
a draft of which was first "finalized" in 2005.
Syed Tashfin Chowdhury is the
Editor of Xtra, the weekend magazine of New Age,
in Bangladesh.
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