The interim government has decided to increase gas exploration efforts to combat the ongoing energy crisis in Bangladesh.
Power, Energy, Rail, Road Transport, and Bridges adviser Muhammad Fouzul Kabir Khan, announced the decision during a press briefing at the Secretariat on Thursday.
He emphasised that the crisis stems from a dwindling gas reserve, which has forced the government to import expensive liquefied natural gas (LNG).
He said as a solution, the government was prioritising gas exploration while seven companies had already expressed interest in exploring gas in deep-sea areas.
The adviser also highlighted plans for onshore gas exploration in addition to offshore exploration.
He mentioned that by 2025, 50 wells were scheduled for exploration. He said, of these, 15 had already been drilled, resulting in the discovery of 176 million cubic feet of recoverable gas per day.
“However, due to a lack of pipeline infrastructure, only 76 million cubic feet have been fed into the national grid,” Khan added.
Fawzul Kabir Khan further disclosed that an additional 35 wells will be drilled by 2025, with state-owned Bangladesh Petroleum Exploration and Production (BAPEX) handling 11 of them, and the remaining 24 assigned through an open tender process.
He confirmed that the government-to-government agreements would not be utilised; instead, the projects would be open to all interested parties.
By 2028, the government aims to drill another 100 wells, including 69 onshore wells. BAPEX will oversee 33 of these, while 10 rigs will be leased for the task.
The remaining 26 wells will also be drilled via open tenders. This large-scale exploration is expected to significantly alleviate the country’s gas shortage. The advisor assured that project timelines would not be extended, and tenders will be issued next week.
It is worth noting that earlier this year, the ousted Awami League government had issued an international tender for oil and gas exploration in the sea, which concluded in September.
According to a Petro Bangla advertisement for offshore oil and gas exploration, international oil companies (IOCs) with a track record of producing at least 15,000 barrels of oil or 150 million cubic feet of gas outside of Bangladesh are eligible to participate.
Under the Production Sharing Contract (PSC) model, foreign companies will be awarded exploration blocks, based on a revised PSC model approved in 2023.
This new model stipulates that if gas is found, the government will purchase it at 10 percent of the global crude oil price, which is an improvement over previous PSC rates of $5.6 and $7.25 per unit for shallow and deep waters, respectively.
The average monthly price of Brent crude will be used as the benchmark for gas pricing. The government’s share of the gas will increase as production grows, while the multinational companies’ share will decrease.
In deep-sea blocks, Bangladesh’s share will range from 35 percent to 60 percent, and for shallow waters, it will vary from 40 percent to 65 percent.
However, if the contractor fails to discover commercially viable gas within the set timeline, the government has the option to increase its share by 1 percent to 2 percent, depending on the specific terms of the contract.
