A Chinese consortium has been facing delay in starting work on a gas exploration project in Chittagong Hill Tracts (CHT), sources at the Petrobangla said.
Earlier in 2010, the consortium — Sinopec Shengli Longwood — submitted a proposal to drill wells in the CHT under a joint venture with Bangladesh Petroleum Exploration and Production Company Limited (Bapex).
The Chinese consortium completed all required negotiations including pricing of the natural resources with Bapex in February last.
But, the BAPEX is yet to give its consent to the project submitted by the consortium.
A senior official at the state-owned Bapex told the FE Thursday: “We’d many priority projects. For this, the project has been delayed.”
He hinted that BAPEX’s next board meeting to be held on September 3 might take decision on the issue.
However, a senior Petrobangla official said it wants an agreement with Sinopec-led consortium of China as early as possible to start gas exploration activities in the CHT.
“We need quick drilling as we want to supply gas to Chittagong city and its adjoining areas that have been facing severe gas shortages over the past few years,” he added.
The Chinese consortium has also reached a consensus on fixing price of gas at $2.75 each mmcft.
However, a Chinese delegation of the consortium will visit Dhaka from September 6 to discuss problems relating to the project.
The Chinese consortium wants to invest over 100 million US dollar initially to develop four onshore gas structures in the CHT.
“Actually, they need not conduct 2D survey any more and will be able to begin drilling quickly,” managing director of the Bapex Mortuza Ahmad Faruque added.
The Beijing-based Sinopec Group is a state-owned company functioning as an investment organisation in which the state holds the controlling share.
Sinopec Group has a registered capital of RMB 182 billion.
Sinopec will be the first Chinese oil and gas firm, once the contract signed, to be involved in Bangladesh’s hydrocarbon exploration.
The Bapex will have its 30 per cent stake in the proposed joint venture without any sort of its involvement in exploration activities or investment to develop the four gas structures.
The structures are Kotia, Joldi, Kafalong and Shitapara in Block 22 that covers around 13,900 square kilometres area.
The proposed site is just 12 kilometres off the national grid at Patiya in southern Chittagong.
This prospective gas block was originally awarded to the US-based firm, United Meridian Corporation (UMC) in February, 1997 after the country’s first round of international bidding for oil and gas exploration.
Then Houston-based Ocean Energy won the rights to explore gas in block 22, after taking over the UMC.
But as the company did not drill wells within seven years of its contract, the government took over the block from Ocean Energy in 2006.
Energy experts forecast that all the four gas fields have substantial gas reserves as gas was detected there during initial surveys.
Author : Jasim Uddin Haroon / FEX @rrajowan
