IOCs surpass state-run cos in gas production

January 31, 2009

Chevron allowed to extract more gas than tolerable capacity
Aminul Islam
The daily gas production by the international oil companies in the last few days has exceeded that of the state-run companies for the first time because of the successive governments’ refusal to provide the latter with the required fund to explore and develop gas-fields.
Of the total daily supply of 1,822 million cubic feet of gas, four IOCs are currently supplying around 919 million cubic feet of high-priced gas while the three state-run companies are producing 902 mmcfd as Petrobangla is allowing US company Chevron to extract more gas from the Bibiyana field than the tolerable capacity, putting it into danger.
The total share of the IOCs’ gas was only 24 per cent in the 2003-2004 fiscal year. During that fiscal year the average production by two IOCs was 300.46 mmcfd while the state-run companies produced 939 mmcfd.
The IOC’s share of the gas increased to 36 per cent in the 2006-2007 fiscal year with their daily production of 557 mmcfd when the production was around 1,538 mmcfd on an average. The state-run companies at that time produced around 981 mmcfd of gas.
Currently the IOC’s share stands at 50.48 per cent against the state-run companies’ 49.52 as gas production of the Bangladesh Gas Fields Company Ltd, Sylhet Gas Fields Ltd and Bangladesh Petroleum Exploration and Production Company has decreased in the last two years.
‘It has been known for the last few months that the IOCs’ gas production would exceed that of the local companies as no new gas-fields have been discovered,’ energy expert Nurul Islam of the BUET told New Age on Friday.
He said that the current situation was created because of the successive governments’ apathy towards exploration and development work by the state-run companies.
‘The governments neither paid proper gas price to the gas companies nor gave them adequate fund. As a result we are paying foreigners relatively higher prices for our own gas,’ he said.
Professor Islam said that Petrobangla was forced to purchase more gas from IOCs to meet the ever-growing demand. ‘We need gas from the IOCs but at the same time the state-run companies should be given more funds or the price paid to them should be increased so that a balance of production can be created,’ he said.
Petrobangla officials claimed that they were counting a loss of around Tk 80 crore per month by purchasing gas from IOCs at prices that are higher than the price which consumers pay.
Petrobangla purchases gas from the local companies at a rate of around Tk 7-25 per 1,000 cubic feet while the price for the gas from the fields operated by the IOCs stands at around Tk 130 including the Petrobongla’s ‘profit gas’ and corporate taxes.
Informed sources said that the total share of the IOCs’ gas had increased in the last few days as Petrobangla was allowing Chevron to produce around 515 mmcfd of gas although an experts’ committee had warned Petrobangla that the field should not produce more than 450 mmcfd to prevent the premature exhaustion of the gas reservoir.
‘It seems that some Petrobangla officials, for reasons of their own, are determined to allow Chevron to extract more gas so that it can recover its cost and make a profit as early as possible,’ said a source.
A high official of Petrobangla claimed that as per the contract with Chevron they were bound to take around 500 mmcfd of gas from the Bibiyana field. Sources in Petrobangla, however, dismissed the claim.
‘Besides the demand for gas has increased because of increase in consumption during the winter, forcing us to take additional gas from Bibiyana,’ claimed the above-mentioned official.
He said that the share of gas of the state-run companies would increase again once the Titas gas-field’s no. 14 well starts production of around 30 mmcfd soon. ‘We also want that our companies’ share of gas will remain high because of the low price, but the current demand has forced us to buy more gas from the IOCs,’ he said.


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