Accelerating hydrocarbon drilling

Accelerating hydrocarbon drilling

Of late, Indian ONGC Videsh Ltd has agreed to drill two exploratory wells in two separate offshore blocks of Bangladesh in the next drilling season starting from October 2021.

Accoding to reports, it is preparing to drill the wells- Titly in shallow sea block SS-04 and Moitree in block SS-04 areas.The Indian oil-gas exploration firm has already completed a portion of geo-hazard survey on the blocks.

Tender will be floated soon to select subcontractors for carrying out the drilling job. Drilling these wells along with Kanchan is mandatory for the firm within its contract period by February 2023.

The ONGC had a plan to initiate the drilling of an exploratory well at Kanchan in block SS-04 last year. But the onslaught of the deadly coronavirus pandemic and a row over advance income tax or AIT, demurrage charges to port delayed its previous drilling plan.

The ONGC has now planned to drill the wells buoyed by the findings of two dimensional (2D) seismic surveys. Currently, no exploration is being carried out in offshore blocks inside the country's territorial areas in the Bay of Bengal.

No offshore well produces gas in Bangladesh and the entire natural gas output comes from its onshore fields and also from import of liquefied natural gas or LNG.

Any fresh discovery of hydrocarbon in an offshore field will boost the country's future oil and gas reserves.

State-run Petrobangla earlier extended the tenure of contract with the 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's extension. Petrobangla signed two production-sharing contracts or PSCs with the ONGC, the operator of blocks SS-04 and SS-09, on February 17 in 2014. The company holds participating interest of 45 per cent, Oil India Limited 45 per cent and the Bangladesh Petroleum Exploration and Production Company Limited or BAPEX 10 per cent.

Block SS-04 covers an area of 7,269 square kilometres while Block SS-09 stretches 7,026 sq km. Water depth of both the blocks ranges between 20 and 200 metres.

The ONGC is committed to doing 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.

It will operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field. The company has already completed an estimated 3,100 line-kilometre 2D seismic surveys for both the blocks.

If the contractor finds the gas block potential and decides to stay in the contract, then it has to inform the government and also conduct drilling within next two years, said the Petrobangla official.

Recently, the Prime Minister's Energy Advisor also mentioned the government's plan for inviting international bidding for the offshore blocks. He, however, rejected any idea of possible bidding for onshore areas.

The region is yet to unearth its true prospects of natural gas and crude oil. As the existing onshore energy is depleting, and renewables are still in infancy, it is high time we concentrated on the true potential of deep-sea oil and gas reserves in the Indian Ocean Region.

Bangladesh is currently dependent on onshore fields for gas output, with production hovering around 2,700MMCFD against a demand for over 3,300MMCFD (S&P Global Platts, 2015). To meet the growing energy demand and depleting onshore energy reserve, the country lately but recently has concentrated on exploring O&G reserve in the Bay of Bengal.

A country like Bangladesh that is about to enter into the game, should split its deep-water territory into a number of smaller O&G blocks to accommodate an increased number of IOCs in offshore hydrocarbon mining.

The member states should also setup research taskforces on various climate change and environment risks that is mandatory for exploration of offshore energy. In this regard, TVET programs should be initiated and institutional capabilities should be expanded. At the same time, the region needs to develop expertise and adequate skilled manpower for carrying out the challenging operations in both the fields to develop self-sufficiency in the energy sector.

New innovations of deep or ultra-deep O&G mining technology, and new geologic findings of potential gas and oil reserve at great depths would be just wishful ideas and images on paper if there is no delivery mechanism for the market. For South Asia, the depleting energy reserves will challenge the economic development unless the recent discovery of huge gas reserves at the Bay fails to be an eye-opener for the authorities to go all-out for deep-sea exploration.

The country wants to see new gas field discovered within a span of six months to one year, said Mr Nasrul Hamid, State Minister for Power, Energy and Mineral Resources last week.

While talking to the top officials of state-run Petrobangla and its subsidiary Bangladesh Petroleum Exploration and Production Company Ltd or Bapex last week, he called upon them to come up with proper planning to carry forward the hydrocarbon exploration job.

The country should go for unconventional way of drilling utilising the latest technology to explore new gas from old and dried up gas fields, he said. Areas of carrying out two-dimensional and three-dimensional seismic surveys should be expanded to pinpoint exact drilling locations, he added. 

Meantime, natural gas production from the state-owned Titas gas-field is depleting rapidly due to 'failure' in installing well-head compressors on producing wells. It is the country's largest producing gas-field among the state-operated ones.

The authorities' failure to increase natural gas supply from Titas gas-field worsened the country's overall natural gas supply situation. It prompted the government to import expensive liquefied natural gas (LNG) to meet the mounting natural gas demand. Above all, Titas gas field is dwindling fast.

The country discovered only four onshore gas fields with total recoverable reserves of around 800 billion cubic feet (Bcf) over the past decade. The onshore gas fields are Bhola North, Rupganj, Srikail and Sundalpur.

According to geologists, Bangladesh territory in the Bay of Bengal holds the biggest oil and gas prospect. Although the country's gas and oil sector is apparently vulnerable to regional politics, the government needs to take some prompt actions for facilitating a massive exploration drive.

There is no denying that the country has been facing critical gas supply situation for the last few years due to the discouraging performance in exploration, exploitation and extraction of gas from its 'hidden' reserves.

The country urgently needs massive investments from international oil and gas companies given the financial and technological constraints of its own state-run firms. According to experts, investment worth over $30 billion is needed to tap the gas potential in the Bangladesh part of the Bay of Bengal.

The government needs to adopt an integrated policy framework involving the private sector for accelerating drilling activities both in onshore and offshore fields. Bangladesh should also develop expertise and adequate skilled manpower for carrying out exploration work to be self-sufficient in energy.


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