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The Financial Express

Indian firm finds gas block in Maheshkhali dry after drilling

| Updated: March 07, 2022 10:21:11


-Representational Image -Representational Image

Exploration firm ONGC Videsh Ltd did the drilling but found Bangladesh's shallow-water gas-block SS-04 all dry, in what experts term a blow to the country's future energy security.

The oil-and gas-exploration firm of India drilled into its targeted depth of around 4,200 metres beneath the surface in search of a commercially viable gas deposit at Kanchan of Moheshkhali island in the Bay of Bengal but failed to spot any indication of gas reservoir, a senior Petrobangla official told the FE Sunday.

"The company could find only huge deposits of clay and shell-stone sequence during the drilling in absence of sandstone, meaning there is no gas-reserve prospect there," he says.

The ONGC authorities didn't yet abandon the drilling, nor yet informed the state-owned Petrobangla about its decision to continue its drilling setting a new target.

The Indian firm was upbeat about discovering three layers of gas structures having the total gas potential resources of around 1.0 trillion cubic feet (Tcf) in the SS-04 block covering some 7,269 square kilometres (sq km), which prompted the company to carry out the exploratory drilling.

It had to overcome complexities to reach the targeted drilling zone as the logging tools got stuck for several weeks, and finally the drilling contractor - Chinese Sinopec - could pull out the logging tools to reinitiate the drilling.

Sources say the drilling right on Kanchan, located under shallow-water Block SS-04, was bestowed on ONGC under a production-sharing contract (PSC) with the state-run Petrobangla and the government.

ONGC initially had planned to carry out Kanchan drilling couple of years back. The onslaught of the Coronavirus pandemic, subsequent lockdown, restricted movement of personnel and equipment, and tax-payment row with the authorities concerned had earlier prolonged the mandatory drilling of the well.

ONGC and its drilling subcontractors were in payment rows due to the delays.

Before the coronavirus outbreak, a dispute over advance income tax (AIT) and demurrage payment on drilling equipment were delaying the drilling of the exploratory well.

The firm has planned to drill two more wells - Titly in Block SS-04 and Moitree in Block SS-09 areas - within its contract period up to February 2023.

The drilling of the Kanchan well was the first offshore drilling in the country's maritime territory in five years.

Australian oil-and-gas-exploration-company Santos along with state-run Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) earlier in February 2017 drilled offshore Magnama-2 well under Block 16 which was found dry after drilling.

The joint venture had drilled the Magnama-2 well into a depth of around 3,200 metres to find it dry.

This drilling cost BAPEX around US$29 million.

There are also no producing offshore gas wells in the country and the entire natural gas output comes from onshore gas fields as well as import of liquefied natural gas (LNG).

The state-run Petrobangla earlier had extended the tenure of contract with ONGC by two more years until February 2023 to boost offshore exploration. The deal with the Indian firm was set to expire in February 2021 after an initial two-year extension.

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