A couple of decades back, policymakers concerned gave the impression that Bangladesh was floating on gas. And then there were heated debates and street protests over the possibility of gas export to a giant neighbour. A large Indian business conglomerate opened its liaison office in Dhaka to discuss the possibility of setting up gas-based large power plants.
Following strong opposition from various quarters and a lack of credible data to support huge gas deposits, the euphoria subsided. Indian conglomerate in question closed down its office in Dhaka and left.
The country now finds itself in a gas crisis. Many of its fertiliser and power plants remain closed for lack of sufficient gas supply. Residents of many areas of Dhaka city do often suffer due to a supply shortage of gas. Production in gas-run industries also faces disruption very often.
The country is now importing LNG (liquefied natural gas) at a substantial cost to narrow the deficit. The recent hike in energy prices in the international market has made the situation even worse.
What is more worrying is that the gas reserves discovered so far are likely to be exhausted within the next seven to eight years. The existing gas fields have a reserve of 10 trillion cubic feet (tcf) as against the annual demand for 1.0 tcf. However, only 75 to 80 per cent of the deposit is recoverable.
Failure to extract enough gas from fields managed by local companies is part of the gas crisis. The foreign oil companies involved in gas extraction have been lifting gas as per specifications set earlier. The latter have installed compressors to help lift gas in the right quantities and they supply nearly 70 per cent of the gas to the national grid. Local companies don't have the necessary tools and equipment to lift gas from reserves.
Relevant people know that the gas reserve would exhaust within a short time. But, there has been no effective move to engage local or foreign oil firms to find new reserves, onshore or offshore.
Only recently, has the Bapex, the state-owned petroleum exploring entity, discovered two small gas reserves in Bhola. Though considered a highly prospective area, the transmission of gas to the national grid from this remote island remains a problem.
Experts in the relevant field are not very hopeful of finding any major gas reserve onshore. That is why, they feel, the country should concentrate all its efforts on the prospective offshore areas to locate gas reserves. Neighbouring India and Myanmar have struck vast gas reserves in their offshore hydrocarbon blocks. There should be a strong reason for Bangladesh to find one or two such gas fields.
The international oil companies did not show interest in engaging themselves in exploration works in 26 blocks---15 deep-sea blocks and 11 shallow-water blocks---that Bangladesh had offered. The reasons had been the falling prices of crude oil and lack of multi-client 2D or 3D surveys of the blocks. There were talks about surveys. But progress to this effect is still not known.
The government did not feel the urgency to take up offshore exploration seriously. The low oil and gas prices in the international market could be the reasons behind inaction. But the ongoing high oil and gas prices must have come as a rude shock to them. The Russian-Ukraine conflict has added fuel to the volatile oil markets. If the war persists for some months, the fuel crisis might come as a body blow to many countries.
The government has been implementing many megaprojects that would help boost economic growth. But at the core of all development initiatives remains the supply of energy. One cannot conceive of development without the availability of enough power. Coal, diesel and gas are three important sources of energy that fuel power plants, in most cases. Gas is preferred most in the conventional way of power production.
Unfortunately, the government has not attached due importance to the exploration in the country's offshore areas. Policymakers blame the lack of interest of the international oil companies (IOCs). But the IOCs would come only after having credible data gathered through extensive surveys.
The government is now importing LNG to meet at least 15 per cent of the domestic requirement. If that share goes up to 30 or 40 per cent, the financial involvement would turn out to be huge. At the current LNG prices, the country can ill-afford such a cost and subsidy volume.
Seven years is not too long a time. With its gas reserve dwindling to nil by that period, the country will be in deep trouble. So, the government's priority task should be to start exploration in offshore blocks immediately. The ongoing high oil and gas prices could be advanced as an argument to entice IOCs.
