American oil and gas giant Chevron is planning to drill two more gas wells in a 60-square-kilometre 'flank' area, adjacent to the country’s largest producing Bibiyana gas field under Block -12 in northeastern Bangladesh.
Chevron will drill BY-27 in 2023 and another well BY-28 subsequently in search of new gas in the extended area of the Bibiyana gas field to boost the country’s overall natural gas output, a senior Petrobangla official told the FE Monday.
The company inked a supplemental agreement on the Block 12 production sharing contract (PSC) for Bibiyana flank area extension with state-run Petrobangla Sunday at Petrobangla headquarter in the city to establish its exploration rights there.
Chevron also signed two more deals -- Amendment of Jalalabad Gas and Condensate Purchase & Sales Agreement & Amendment of Moulavibazar Condensate Purchase & Sales Agreement for Block 13 & 14 – with Petrobangla Sunday, according to Petrobangla.
Nazmul Ahsan, Chairman of Petrbangla and Eric Walker, President of Chevron Bangladesh attended the deal signing ceremony held at a local hotel.
Petrobangla, however, did not inform anything about the natural gas tariff for the two new wells to be drilled by Chevron.
Chevron Bangladesh is currently getting around US$2.76 per Mcf from Petrobangla for its gas from the Bibiyana field.
The Bibiyana onshore gas field, located under block 12 in Habiganj district of Sylhet division, produces around 1,190 million cubic feet per day (mmcfd) of gas, which accounts for around half the total output from local gas fields.
The country's overall natural gas output was around 2,664 mmcfd as on October 2, of which local gas fields, including Bibiyana, produced around 2,284 mmcfd and the remaining 380 mmcfd came as re-gasified LNG (R-LNG), according to Petrobangla statistics.
Chevron Bangladesh is currently the largest producer of natural gas in Bangladesh with an output of around 1,390 mmcfd from three of its onshore fields-Bibiyana, Jalalabad and Moulavi Bazar. The fields are located in blocks 12, 13 and 14 respectively.
Chevron signed PSC in November 2004 with Bangladesh's state energy agency Petrobangla and the government to explore gas in Bibiyana field.
It started supplying natural gas commercially from the Bibiyana turf in March, 2007 with an initial production capacity of 250 mmcfd after an initial investment of $200 million.
The firm's output was increased to around 900 mmcfd from October 2014 and raised further to around 1,200 mmcfd from March 2015.
Discovered in 1998, the Bibiyana field was initially estimated to have 2.40 trillion cubic feet (Tcf) of proven recoverable gas.
But follow-up studies and development of this field have confirmed that the field is much larger than the initial assessment and with the latest estimation of 2015 Bibiyana's reserves stand around 7.0 Tcf.
Sources say before seeking additional flank area Chevron had carried out an 'exploration study' in 11 onshore blocks, fully or partially, to delineate new hydrocarbon prospects and help augment the country's overall natural gas output.
Among the blocks 1, 2A, 2B, 3A, 3B, 8, 9, 11, 12, 13 and 14, which were studied by Chevron, few are still vacant, or unexplored, some owned by state-run Bangladesh Gas Fields Company Ltd (BGFCL) and some owned by Sylhet Gas Fields Ltd (SGFL) and the remaining are Chevron's.
During the study, Chevron attained access to relevant data and carried out a study in reservoir 'stratography', and unconventional reservoir 'facies,' said sources.
It also aims to further conduct a study in the 'relinquished areas,' in all three of its blocks, which it surrendered to Petrobangla earlier seeing 'poor' prospects there.
Petrobangla has also extended the PSC tenure for Jalalabad, Moulavi Bazar and Bibiyana gas fields of Chevron by five years each with a provision of extending it by five more years to boost exploration under the new deals.
The PSC tenure of Jalalabad and Moulavi Bazar gas fields under block 13 and 14 has been extended by five years to 2029 from the previous schedule of contract expiration in 2024.
And the deal could be extended further, until 2034.
The tenure of the remaining block 12 (Bibiyana) will also expire in 2034.
They said Petrobangla extended the PSC tenures of Chevron's blocks as the US oil major decided to stay in the country in October 2017 by cancelling its previous decision to leave the country selling off its stakes to a third party.
"Chevron then also assured the government of investing around US$400 million afresh in oil and gas exploration and development," says one official.
It also then planned to build two compression stations at Bibiyana and Jalalabad gas fields respectively to ramp up gas output from the country's northeastern region.