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Exploration activity has predominantly been conducted in the east of the country, with the west and the offshore remaining relatively under-explored. Only 110 exploration wells have been drilled to date – 65 of which are New Field Wildcats, with only 13 being drilled in the offshore – and a total of 25 discoveries have been made. As such, the country has a highly impressive 38% success rate.
Exploration has been stagnant in recent years, however – international oil and gas companies effectively placing a moratorium on such in the late 1990s pending the development of a local gas market and a decision by the Bangladesh Government on the politically sensitive issue of gas export to India. The Bangladesh Government has long been reluctant to come up with a policy on gas export, choosing not to commit itself to gas supply contracts whilst reserve estimates remain uncertain, and a decision was subsequently made to retain the current gas reserve for domestic use and help combat the rising gas demand of the country.
Current / Future Production
Bangladesh is currently producing in the region of 1,400 MMcf/d and 3,500 bc/d – oil production from the Sylhet Field having ceased in 1994. The three state-owned companies – Bangladesh Petroleum Exploration & Production Company Ltd (Bapex), Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Ltd (SGFL) – are responsible for the production of around 950 MMcf/d from eleven fields, with three international oil and gas companies – Cairn Energy, Chevron and Niko Resources – responsible for the production of around 450 MMcf/d from four fields. Of the two offshore discoveries made to date, only one has been developed – the Sangu Field, which was discovered by Cairn Energy on Block 16 in February 1996 and is currently producing around 150 MMcf/d.
Production levels are expected to increase significantly in the near future, however, as Chevron (already the country’s leading foreign producer with its Jalalabad and Moulavi Bazar fields) brings the Bibiyana Field onstream. Discovered by Occidental on Block 12 in July 1998 prior to its asset swap with Unocal the following year, the field is the country’s largest single site of natural gas to date with recoverable reserves of 2.4 Tcf and is expected to contribute an additional 250 MMcf/d to the national grid from late 2006. It is anticipated that production will increase to 500 MMcf/d by the end of 2008 – the three state-owned companies also planning to undertake gas augmentation projects (aimed at delivering an additional 300 MMcf/d) on the Bakhrabad, Habiganj, Kailas Tila, Narshingdi, Shabazpur and Titas fields over the next five years.
Tullow is also undertaking a long-term production test from its Bangora 1 discovery on Block 9 – first gas having commenced in May 2006 and stabilised at a gross flow rate of 50 MMcf/d. The well represents Tullow’s first production in Bangladesh and production rates are expected to increase with the completion / tie-in of Bangora 2 and the drilling of additional appraisal wells.
Gas Reserve / Undiscovered Resource Potential
A number of studies have been conducted in recent years concerning the country’s natural gas reserve and undiscovered resource potential. All have concluded that Bangladesh has a mean undiscovered gas resource of at least 32 Tcf.
The two most widely recognised studies are the United States Geological Survey (USGS) / Petrobangla Study (2001), which declared the mean undiscovered resource potential of the country to be 32.1 Tcf, and the Hydrocarbon Unit / Norwegian Petroleum Directorate (NPD) Study (2001), which declared the mean undiscovered resource potential of the country to be 41.6 Tcf. Both of these studies, however, only took into account offshore acreage up to a water depth of 200m.
Although the remaining recoverable (2P) gas reserve for the country is estimated to be 14.4 Tcf (July 2005), it is understood that there is significant field growth potential – most of the state-owned gas fields have not yet been fully appraised. |