Western sanctions against Russia over the Ukraine war bites Bangladesh further as the much-needed gas drilling in hydrocarbon-rich Bhola by Russia's Gazprom is destined to be delayed.
The western nations' decision imposing a harsh set of sanctions to punish Russia, including blocking some banks from the SWIFT international payments system and restrictions on the Russian central bank's international reserves, might impact execution of the project on drilling of three onshore gas wells, say sources.
SWIFT is the global financial artery that allows smooth and rapid transfer of money across borders. The acronym stands for Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Created in 1973 and based in Belgium, SWIFT links 11,000 banks and institutions in more than 200 countries.
And the delayed drilling in Bhola might intensify the country's mounting natural gas crisis as the island is treated as a 'confirmed' location of adding new natural gas output after drilling, says a senior Petrobangla official.
It might ramp up the growing dependency on the import of expensive liquefied natural gas (LNG) to meet domestic demand.
LNG price on the international spot market now hovers high around US$51 per- million British thermal unit (MMBTU).
Bangladesh's import cost of LNG from long-term suppliers, however, is close to $14 per MMBTU.
Bangladesh already began counting the cost in higher import bills as oil and gas prices on the international market soar under immediate impact of the battle royal.
Sources say the Russian gas-and-oil-exploration firm, Gazprom, had started mobilising rigs and equipment to do the drilling of the three onshore gas wells before the commencement of the war.
Land of the first drilling site, Tabgi-01, was readied to kickstart work.
Also, the company has planned to drill two more wells: Bhola North-02 and Illisha-01.
The Russian state entity obtained the contract to drill three wells at a total cost of around $64 million.
This sum is almost double the drilling cost of state-run Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX).
BAPEX discovered several years back the Bhola gas field on the coast of the Bay of Bengal where the three onshore wells are located.
Gazprom was given the drilling job under the Speedy Supply of Power and Energy (Special Provision) (Amendment) Act 2010-the law that empowers the government to hand out contracts sans bidding in order to quickly address fuel needs.
The law has a provision of immunity to those involved with such a quick fix.
Gazprom has drilled a total of 17 onshore wells in different parts of Bangladesh since 2012.
Separately, Gazprom and Petrobangla, the parent company of BAPEX, inked a memorandum of understanding in January 2020 for strategic cooperation.
Energy experts and rights groups term Gazprom's drilling cost 'exorbitant', 'unjustified' and 'unrealistic' given the current context of the coronavirus pandemic when international oil companies do not have much exploration work in hand.
When contacted, Consumers' Association of Bangladesh energy adviser Prof Shamsul Alam termed the contract with Gazprom 'massive theft'.
He accuses a vested quarter of pocketing quick bucks discounting country's interests, saying that it will raise the overall cost and also slow down industrialisation.
"We are an ill-fated nation," bemoans the professor.
Badrul Imam, a geology professor at Dhaka University, says this will also undermine the BAPEX.
He suggests that the BAPEX be given the drilling job in Bhola, which is considered another gas hub of the country after northeastern Sylhet region.
BAPEX discovered gas at Shahbazpur in Bhola, thus opening up the potential of the prospective gas hub, Prof Imam adds.
He alleges that well drilling by Gazprom in Bangladesh has had a bad track record.
"Its drilling was faulty in some wells, which were later developed by the BAPEX," he says.
