Bangladesh gas reserve, resource potential may be underestimated

April 29, 2002
Bangladesh’s resource base can be divided into three main categories. The first article covered existing fields and discoveries and field growth (OGJ, Apr. 22, 2002, p. 48). The third category is new field discoveries.

BANGLADESH GAS ENDOWMENT–2

Bangladesh’s resource base can be divided into three main categories. The first article covered existing fields and discoveries and field growth (OGJ, Apr. 22, 2002, p. 48). The third category is new field discoveries.

3. New field discoveries–Over the past several years, various entities have conducted a number of assessment studies on Bangladesh’s hydrocarbon resource potential. Some of these studies were developed jointly with Petrobangla. While some of the assessments focused on individual blocks, others took a countrywide approach.

Hydrocarbon Habitat Study

The first comprehensive study that reviewed all geological provinces both onshore and offshore Bangladesh was the "Hydrocarbon Habitat Study" (HHS). Petrobangla conducted the study in 1986 with technical support from Well Drill.

The study identified a number of leads and prospects in eastern and western Bangladesh and estimated a total undiscovered resource potential of 42.8 tcf, of which about 18 tcf were allocated for leads and prospects identified in western Bangladesh.

However, it is important to point out that the HHS did not identify many of the more recent prospects–some of which became significant discoveries–such as onshore Bibiyana field and offshore Sangu field. Nevertheless, results from the HHS facilitated additional resource assessments and exploration programs by international oil companies.

Some recent studies on the Bengal basin also support the hydrocarbon potential of western Bangladesh. Shamsuddin and Abdullah2 also mentioned that potentially significant hydrocarbons exist in the platform shelf and hinge zone areas and should be targeted for major exploration activities.

More recently Imam and Hussain15 stated that the western part of the Bengal basin (including the hinge zone) has the potential for future hydrocarbon discoveries, especially in stratigraphic traps. They also mentioned that the presence of suitable source rocks, high-pressure zones, "dim" and "flat" spots, and velocity sag in reef complexes in the Sylhet limestone tend to favor the hydrocarbon prospectivity of older sequences, especially the Eocene Sylhet limestone and the Oligocene Barail Group.

Bangladesh Study Group

In 1989, the Bangladesh Study Group (BSG), which represented four oil companies (Trend International Ltd., Idemitsu Oil Development Co. Ltd., Repsol Exploration Indonesia, and Eurafrep), conducted an intensive joint technical study on the hydrocarbon potential of Bangladesh.

Except for the offshore area and two onshore blocks (blocks 13 and 14), the study assessed the oil and gas potential for all individual blocks based on geological and geophysical criteria. These criteria included the potential for oil versus gas, reservoir quality, seals, and the number and type of plays in each block. A Monte Carlo simulation was used for reserve calculations for each block. The study assessed 130 leads/prospects and reported to Petrobangla a minimum total estimate of 62 tcf for the undiscovered resource potential.

ODA study

In 1986, Petrobangla and Well Drill, under the British Overseas Development Agencies (ODA), conducted a detailed seismic survey of PSC Block 4 in the hinge zone area (Fig. 1). Their report identified 21 prospects and three leads. The total undiscovered resource potential for the 21 prospects was estimated at 7.5 tcf.

Anglo-Scandinavian

In 1988, the Anglo-Scandinavian Petroleum Group studied the hydrocarbon potential of the Mymensingh area, which mainly covers Blocks 8 and 11 (Fig. 1). This study identified a number of structural and stratigraphic leads. Nine leads were assessed to have a total undiscovered resource potential of 7.07 tcf.

Shell resource assessments

In 1999, Shell Bangladesh Exploration & Development BV performed a study which concluded that the risked success gas volume in Bangladesh was approximately 38 tcf.16 However, that study also noted this estimate might be somewhat higher with further detailed studies.

In April 2001, Shell published its new assessment of the country’s total undiscovered resource potential, which ranges from 20 to 40 tcf (from which a mean estimate of 32 tcf could be calculated).17

Unocal assessment

In 2000 and 2001, Unocal conducted a resource assessment on certain PSC blocks.6 The sum of the risked means for Unocal’s assessment is 13.2 tcf, which is derived from 30 prospects and leads identified from six PSC blocks (blocks 7, 11, 12, 13, 14, and 20) that Unocal evaluated during Bangladesh’s second bid round (Fig. 1). Unocal currently operates four of these blocks (blocks 7, 12, 13, and 14).

A probabilistic approach using a Monte Carlo simulation was used, combining parameter distributions and generating individual resource distributions for each prospect. Then, an overall risk or Probability of Success (POS) for discovery of the minimum resource size for each individual prospect was calculated.

The POS and potential reserves distribution for each individual prospect were input into a Monte Carlo simulator and combined into a single distribution representing the total resource potential. The total undiscovered resource potential from the six PSC blocks ranges from a minimum (P90) of 5.3 tcf to a maximum (P10) of 22.6 tcf with a mean of 13.2 tcf.

USGS studies

As part of its worldwide resource study in 2000, the US Geological Survey (USGS) estimated Bangladesh’s total undiscovered resource potential to be about 33 tcf. Later in June 2001, Petrobangla and the USGS published an independent and comprehensive study to determine Bangladesh’s technically recoverable, undiscovered resource potential during 2000 to 2030.

The USGS-Petrobangla team divided Bangladesh into six trends or "assessment units" based on specific geologic terrain and hydrocarbon development within a total petroleum system and utilized the USGS’ probabilistic "Seventh Approximation" methodology to evaluate each trend.

The probabilistic assessments for all six trends were combined into a countrywide resource distribution. The outcomes for total undiscovered resource potential or new field discoveries range from a minimum (P95) case of 8.4 tcf to a maximum (P5) case of 65.7 tcf with a mean of 32.1 tcf.18

However, it is important to note that the USGS-Petro- bangla assessment did not include the resource potential beyond 200 m of water or fields that have less than 42 bcf. In more mature basins worldwide where larger fields and infrastructure have been developed, accumulations less than 42 bcf are likely to be commercial. Indeed, in very mature areas such as Louisiana that have significant infrastructure, accumulations of 3 to 5 bcf are considered commercial. In areas of Pakistan, accumulations as small as 2 bcf are also considered to be commercial.19

Hydrocarbon Unit study

In January 2002, the HCU issued its study "Bangladesh Petroleum Potential and Resource Assessment 2001."

This review, which was initiated by the government of Bangladesh in early 2001, was conducted with technical assistance from the Norwegian Petroleum Directorate and utilized expertise within HCU and from Petrobangla, Bangladesh Exploration Co. Ltd. (BAPEX), the Sylhet and Bangladesh Gas Fields Cos. (SGFCL and BGFCL), and the Geological Survey of Bangladesh (GSB).

HCU focused on existing gas fields and undiscovered resources and reviewed all previous resource assessments for both the onshore and offshore areas. (The offshore data only covered areas to 200 m of water.) The HCU study included the impact of reserves growth from compression on existing fields, but did not estimate any field growth potential (additional reserves) from other advanced technologies such as 3D seismic surveys, thin bed pay analysis, and reservoir management.

According to the HCU study, Bangladesh’s total undiscovered resource potential is estimated to range from a minimum (P90) of 18.5 tcf to a maximum (P10) of 63.7 tcf, with a mean of 41.6 tcf.

Resource base lifecycle

The petroleum resources of a basin, province, or country relate to a lifecycle that is characteristic of any hydrocarbon resource base. Three specific stages develop with time in a resource base lifecycle:

  1. Market growth: At the outset of exploration, perhaps only a fraction of the ultimate resource base may be recognized because markets will be immature with limited economic incentives to prove more resource than the market can absorb. This is particularly true with gas since markets tend to be more localized. After the initial exploration and appraisal successes, the general economy and gas markets in particular will respond and grow, which in turn stimulates further exploration and market growth. However, if the market is constrained, exploration will be curtailed until sufficient demand for gas develops.
  2. Expansion of the resource base: The initial exploration, appraisal, and early production programs are conducted in what are initially perceived as the most prospective areas--although this perception often changes as data are acquired. Consequently, the technical database and knowledge tend to be localized in the discovered field areas and exploration play fairways, which may cover less than half of the total hydrocarbon province area.

For example, 2D seismic data cover 50% of the proven petroleum system fairways of eastern Bangladesh including offshore areas but less than 30% of the western portion. Only 64 exploration and 57 appraisal and development wells have been drilled in Bangladesh with the majority of the appraisal and development wells in eight fields in eastern Bangladesh including its offshore areas. The early stage of a resource base lifecycle is dominated by unproved reserves, including probable and possible field reserves as well as identified and unidentified exploration opportunities.

  1. Promotion of reserves: Ongoing appraisal and development programs and continuing exploration in response to market incentives significantly enhance the technical database and knowledge of the petroleum systems. This allows more reserves to be classified or promoted to the proved category with increasing production dominating the later stages of the resource base lifecycle.
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As a comparison, the current assessment of Bangladesh demonstrates that the resource base is dominated by at least 70% in the unproved reserves category, indicating a relatively early stage in the resource base lifecycle (Fig. 7).

Summary

Bangladesh’s resource base can be summarized as follows:

Field discoveries: Proved plus probable ultimate recoverable gas (URG) reserves of 20.44 tcf from 22 discovered fields as reported by the HCU study. As of June 2001, the cumulative production totaled 4.3 tcf; therefore, 16.14 tcf remain on a countrywide basis.

Field growth: Additional probable reserves of 12.8 tcf as estimated by Unocal on a countrywide basis due to the impact of applying new technologies to existing Petrobangla-operated fields. The main technology drivers are 3D seismic, thin bed pay analysis, compression, and reservoir management.

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New field discoveries: A mean countrywide estimate of more than 32 tcf for the risked undiscovered resource potential as determined by various resource assessments conducted over time by several agencies, including joint studies with Petrobangla and HCU (Fig. 8).

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Total resource base: By combining Bangladesh’s URG of 20.44 tcf with additional probable reserves from field growth of 12.8 tcf, the URG from existing gas fields is 33.24 tcf. By adding the undiscovered risked mean for the resource potential of new field discoveries at 32 tcf to the countrywide URG, Bangladesh’s total hydrocarbon resource base is estimated at 65.24 tcf (Fig. 9).

Even excluding significant field growth potential, it appears from the HCU study that Bangladesh’s total gas resource base is still more than 64 tcf (URG reserves including compression of 22.44 tcf from existing gas fields plus undiscovered potential of 41.6 tcf).

Bangladesh’s petroleum industry is in an early stage relative to the lifecycle of a hydrocarbon resource base. As experienced in Thailand, Myanmar, and China, a nation’s ultimate resource base can easily be underestimated in the early stages of a resource base lifecycle due to the limited technical and know- ledge database as a result of limited market demand. Additionally, this assessment of Bangladesh’s hydrocarbon resource base has excluded an evaluation of oil/condensate reserves and potential on a countrywide basis as well as coalbed methane potential in western Bangladesh.

Bangladesh is at an important stage in its history. Given its sizable gas resource base, the country can meet its own domestic energy needs and at the same time create additional opportunities that will provide significant economic growth for the people of Bangladesh.

References

  1. Petrobangla: "Petroleum Exploration Opportunities in Bangladesh," Government of the People’s Republic of Bangladesh and Bangladesh Oil, Gas and Minerals Corp. (Petrobangla), Dhaka, Bangladesh, February 2000.
  2. Shamsuddin, A.H.M., and Abdullah, S.K.M., "Geologic Evolution of the Bengal Basin and Its Implication in Hydrocarbon Exploration in Bangladesh," Indian Journal of Geology, Vol. 69, No. 2, 1997.
  3. Hossain, Mosharraf, Md., "Exploration of Hydrocarbons in Bangladesh: Prospects and Potentials," ICEP International Seminar 2000, Tokyo, November 2000.
  4. Murphy, Richard W.: "Bangladesh enters the oil era," OGJ, Feb. 29, 1988, p. 76.
  5. Shamsuddin, A.H.M., Brown, Todd A., Lee, Susan, and Curiale, Joseph, all with Unocal Corp., "Petroleum Systems of Bangladesh," SEAPEX Exploration Conference, Singapore, April 2001.
  6. Brown, Todd A., Shamsuddin, A.H.M., and Rickard, Mike, all with Unocal Corp., "Hydrocarbon Resource Base of Bangladesh," SEAPEX Exploration Conference, Singapore, April 2001.
  7. Khan, Maroof, and Hussein, Musharref, "Geology of Bangladesh Gas Fields," Offshore South Asia Conference, Singapore, 1980.
  8. Bangladesh Oil, Gas and Mineral Corp. (Petrobangla): "Hydrocarbon Habitat Study (HHS)," December 1986.
  9. Intercomp-Kanata Management (IKM) Ltd.: "Gas Field Appraisal Project Management Report," prepared for the Canadian International Development Agency and Bangladesh Oil, Gas and Minerals Corp., April 1992.
  10. Well Drill, "Review of Recoverable Gas Reserves in Bangladesh," prepared for the International Development Association (IDA) and Bangladesh Oil, Gas and Minerals Corp., November 1992.
  11. Hydrocarbon Unit (HCU) of the Energy and Mineral Resource Division and the Norwegian Petroleum Directorate, "Bangladesh Petroleum Potential and Resource Assessment 2001," January 2002.
  1. Aylor, W.K., Jr., "Measuring the Impact of 3-D Seismic on Business Performance," SPE 56851, Journal of Petroleum Technology, June 1999.
  2. Smith, J.L., Unocal Corp., Talukder, M. Yousuf A., Petrobangla and Satterfield, Will M., Occidental of Bangladesh Ltd., "Utilization of State-of-the-Art Logging Tools and Petrophysical Analysis Assists in the Identification of Thin Bed Gas Pay: Implications to Bangladesh Reserves," Proceedings of Second Petroleum Engineering Symposium, May 1999.
  3. Khan, M.A.A., general manager, production and marketing division, "Natural Gas Demand and Supply Forecast: Bangladesh FY 2001 to 2050," Petrobangla, 2001.
  4. Imam, Badrul, M., and Hussain, M., "A review of hydrocarbon habitats in Bangladesh," Journal of Petroleum Geology, Vol. 25, No. 1, January 2002, pp. 31-52.
  5. Shell Bangladesh Exploration and Development, "Gas Resource Estimation-Managing Risk," Bangladesh Institute of Law and International Affairs, Dhaka, November 1999.
  6. Shell Bangladesh Exploration and Development, "Bangladesh Power and Energy Today," National Defence College, Dhaka, Bangladesh, April 2001.
  7. Petrobangla and USGS Joint Resource Assessment Team, "U.S. Geological Survey-Petrobangla Cooperative Assessment of Undiscovered Natural Gas Resources of Bangladesh," January 2001.
  8. Pakistan Energy Yearbook 2000, Hydrocarbon Development Institute of Pakistan, Ministry of Petroleum and Mineral Resources, Government of Pakistan, January 2001.

The authors

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A.H.M. Shamsuddin (ashamsuddin@unocal. com), chief geologist of Unocal Bangladesh Ltd., has 16 years of experience in oil and gas exploration and development. Before joining Unocal in 1995, he worked for Bangladesh Oil, Gas and Mineral Corp. and Bangladesh Petroleum Exploration Co. Ltd. He has an MS in applied geology and a doctorate in petroleum geology from Moscow State University.

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Todd A. Brown has 15 years’ experience in the oil and gas industry. He began his career with Unocal in 1987 and serves as project manager for the exploitation group for Unocal Indonesia. He has been involved with Unocal in Bangladesh, Thailand, India, and the Gulf of Mexico/Gulf Coast. He has an MS in geology from Baylor University and a BS in geology from Hardin-Simmons University.

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Mike Rickard has 24 years of experience in oil and gas exploration and development. As senior advising evaluation engineer he is involved in economic evaluations of Unocal’s upstream projects in India, Bangladesh, and China. He joined Unocal in 1980 and has had assignments in Thailand and the UK North Sea as a petroleum engineer. He has a bachelor’s in engineering from Imperial College.