India's oil company ONGC Vid-esh Ltd finally began Wednesday maiden offshore drilling on the Maheshkhali island in the Bay of Bengal to delineate hydrocarbon reserves.
The oil-and-gas explorer will be drilling around 4.20 kilometres deep into the Bay of Bengal within the next three months, a senior Petrobangla official told the FE.
This is the first drilling in any offshore well inside the country over the past four years.
Australian oil-and-gas-exploration-company Santos along with state-run Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) earlier in February 2017 had drilled offshore Magnama-2 well under block 16which was found dry after the drilling.
The joint venture had drilled the Magnama-2 well to a depth of around 3, 200 metres only to find it dry.
This drilling cost BAPEX around US$29 million.
Currently, there is also no producing offshore gas well in the country and the entire natural gas output comes from the country's onshore gas fields as well as the import of liquefied natural gas (LNG).
Sources said the onslaught of deadly coronavirus pandemic and tax-payment row with the authorities concerned had put on hold the mandatory drilling of the well by the Indian oil-and-gas-exploration company.
The ONGC had planned to initiate drilling an exploratory well at Kanchan in shallow-water block SS-04 in 2020.
But the spread of coronavirus across the globe and subsequent lockdowns and restricted movement of personnel and equipment last year delayed the drilling programme.
The drilling equipment that had reached before the pandemic period in March 2020 required 'fitness' tests again before getting down to drilling.
Before the onslaught of coronavirus, a dispute over advance income tax (AIT) and demurrage payments on drilling equipment was delaying the drilling of the exploratory well.
"After resolving the dispute, the coronavirus issue emerged as a major roadblock to initiating drilling," said one source.
The ONGC has initiated drilling the offshore well buoyed by the findings of 2D (two-dimensional) seismic surveys.
After completing the Maheshkhali drilling the ONGC has a plan to carry out two more drillings next year.
Drilling these wells is also mandatory for the ONGC within its contract period up to February 2023.
Any fresh discovery of hydrocarbons in the offshore well will, however, boost the country's future energy security.
State-run Petrobangla earlier had extended the tenure of the 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.
Petrobangla signed two PSCs, or production-sharing contracts, with the ONGC, the operator of blocks SS-04 and SS-09, on February 17 in 2014, which were set to expire in February 2019.
The ONGC is the operator of blocks SS-04 and SS-09, having the participating interest of 45 per cent. OIL holds 45 per cent of participating interests and the Bangladesh Petroleum Exploration and Production Company Limited or BAPEX holds the remaining 10-per cent share.
The Block SS-04 covers an area of 7,269 sq km while Block SS-09 spans an area of 7,026 sq km. The water depth of both the blocks ranges between 20 and 200 metres.
As per the PSC, ONGC is committed to conducting 2,700 line-kilometre 2D seismic data acquisition and processing and one exploratory well in Block SS-04 and 2,700 line-kilometre 2D seismic data acquisition and processing and two exploratory wells in Block SS-09.
The company will be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field. The ONGC has already completed around 3,100 line-kilometre 2D seismic surveys for both blocks.
Azizjst@yahoo.com