A decision by the government of Bangladesh to sell or not sell some of its natural gas reserves to neighboring countries in South Asia will be important in determining the economic future of Bangladesh, a country with an area about equal to Wisconsin.
Bangladesh is a country of 150 million people, many of whom live at or below the poverty line. It is situated almost entirely on the great low-lying delta of the Ganges and Brahmaputra River systems. Folded Tertiary strata that form hill tracts in easternmost Bangladesh, adjacent India, and Myanmar provide a little relief above a monotonous deltaic terrain (Fig. 1).
The country is located on the northeastern margin of the Indian tectonic plate. The plate is colliding with the underbelly of Asia to form the Himalayan Mountains on the north and simultaneously is being subducted obliquely on the east where oceanic crust along the eastern margin of the Indian subcontinent is sliding downward beneath the Burma plate.
To the north, just south of the Himalayas, the continent-to-continent collision has resulted in the southward thrusting of Precambrian crystalline rocks of the Shillong massif over the Tertiary deltaic deposits to the south. In eastern Bangladesh, eastern India, and western Myanmar, Tertiary sedimentary strata that overlie oceanic crust are being folded into a series of relatively large north-south trending anticlines and synclines to the west of an east-dipping subduction zone.
It is these sparsely drilled anticlines, which trend from northeastern Bangladesh, through Tripura, India, into southeastern Bangladesh and adjacent Myanmar, that are the structural traps for much of the gas that has been discovered thus far in Bangladesh.
The exploratory holes drilled in western Bangladesh and in adjacent India, on the buried Tertiary shelf west of a northeast-trending paleo-hinge zone (Fig. 1), have met with little success. The central, relatively unfolded deep part of the basin is almost entirely unexplored.
Gas estimates
Introduction
Proved reserves of gas are commonly defined as, "The estimated quantities of natural gas that analysis of geological and engineering data demonstrates with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions."1
However, in practice there may be considerable differences in the ways in which agencies and organizations in different parts of the world estimate gas reserves. Accordingly, gas reserve numbers for different countries, as reported herein and elsewhere, should be considered only approximately comparable.
During the past several decades, Petrobangla, the national oil company of Bangladesh, and international oil companies (IOCs) have discovered 21 major gas fields in Bangladesh. These fields contain the current gas reserve base for Bangladesh.
In 1999, at the Bangladesh University of Engineering and Technology (BUET) conference held in Dhaka, Bangladesh, Petrobangla stated that remaining gas reserves in Bangladesh were 9.03 tcf and that this reserve would be exhausted by 2012. It was this persistent concern that had earlier stimulated the government to divide the country into lease blocks and offer them for sale under production-sharing contracts, initially in 1974 and again in 1988.
Seven exploratory wells were drilled during this first phase of activity and resulted in one commercial discovery. In the early 1990s additional incentives offered by the government encouraged renewed exploration by the IOCs. Occidental Petroleum Corp., Unocal Corp., Cairn Energy PLC, Rexwood-Okland, Shell Oil Co., and others renewed their activities and made several major discoveries.
In the late 1990s, without the incentive of adequate markets, IOC activity in Bangladesh declined significantly. It probably will remain relatively dormant until domestic demand increases or exports of gas to other South Asian countries are permitted.
The decision to permit exports, at least in part, will be based on the best geological and engineering estimates of the gas endowment of Bangladesh. The government enlisted the cooperation of the US Geological Survey (USGS) in 2000-01 to evaluate the potential undiscovered, technically recoverable gas resources of Bangladesh. It also enlisted the assistance of the Norwegian Petroleum Directorate (NPD) in 2001-02 to re-evaluate gas reserves in existing fields and estimate potential gas resources in known prospects and leads.
HUC/NPD assessment
Most recently, a team of scientists and engineers from the Hydrocarbon Unit (HUC) of the Bangladesh Energy and Mineral Resources Division and the Norwegian Petroleum Directorate re-evaluated four existing fields and studied identified prospects and leads in order to re-estimate the overall gas reserves and resources of Bangladesh.
They estimated the proved and probable recoverable gas reserves in Bangladesh to range from 13.0 to 24.1 tcf, with a medium estimate of 16.1 tcf, and they estimated undiscovered gas resources in Bangladesh to range from a low of 18.5 tcf to a high of 63.7 tcf, with a medium estimate of 41.6 tcf (Table 1).
During this process, this international team described and mapped six petroleum systems, reestimated the gas reserves of four major fields, and analyzed lead and prospect information in order to determine the undiscovered natural gas potential of Bangladesh. The results of this assessment were released in January 2002.2
USGS assessments
In comparison, utilizing a significantly different methodology, the USGS prepared two assessments of the technically recoverable, undiscovered hydrocarbon resources of Bangladesh in 2000 and 2001 (Table 1).
USGS does not perform engineering evaluations of the sizes of discovered oil and gas fields. The first assessment, a part of its World Energy Assessment 2000, was of the entire Ganges-Brahmaputra delta in eastern India, Myanmar, and Bangladesh, and was prepared independently of the government of Bangladesh by the USGS.
In the USGS assessment of the Ganges-Brahmaputra delta, undiscovered resources of both oil and gas were assessed. The second assessment followed a year later as a special gas assessment of the country of Bangladesh. This assessment was prepared by a team composed of geologists and engineers from both USGS and Petrobangla.
The USGS 2000 and 2001 assessments considered a time frame of about one generation, 30 years into the future, as realistic for the predictive modeling of undiscovered hydrocarbon resources.
The USGS subjectively assesses technically recoverable undiscovered hydrocarbons based on an understanding of the petroleum geology and of the petroleum systems of the region, the numbers and sizes of existing discoveries, and an estimate of the potential range in the numbers and sizes of undiscovered fields.
Minimum field sizes are established and oil and gas in accumulations below those sizes are not assessed. Growth factors are commonly applied to the known sizes of fields in order to estimate ultimate field sizes.
For the World Energy Assessment 2000, known field sizes commonly were increased to their potential grown sizes based upon growth factors calculated from US data. The results of the World Energy Assessment 2000 were released at the World Petroleum Congress in Calgary, Canada, and are available at the following USGS website (http://greenwood.cr.usgs.gov/energy /WorldEnergy/DDS-60/).
For the 2000 USGS regional assessment of the Ganges-Brahmaputra geological province, oil and gas resources were allocated from the total area assessed to portions of the three countries involved. This province included almost all of Bangladesh.
The assessment utilized a minimum field size of 2 million bbl of oil equivalent or 12 bcf and extended southward into the deep waters overlying the Bengal fan to a depth of 2,000 m. Three petroleum systems were identified, two on the western shelf of the Ganges-Brahmaputra delta, including a Permian coal assessment unit that was not assessed and one within the main part of the delta and deepsea Bengal fan.
Within a year of the release of the World Energy Assessment, and at the request of the US Ambassador to Bangladesh and government of Bangladesh, the USGS together with geologists and petroleum engineers from Petrobangla, prepared a special country assessment of Bangladesh.3
International oil companies Cairn, Unocal, and Shell, were involved during this latter assessment insofar as they made presentations and shared proprietary data with the combined USGS/Petrobangla assessment team. In this special country assessment, potential field growth was not estimated, only gas was assessed, and a minimum field size of 42 bcf was used.
This minimum size, significantly larger than the one used in the World Assessment 2000, was selected to simplify the assessment process by excluding the numerous small fields that must exist and collectively contain only a relatively small amount of the total resource.
Because of the limited time for the assessment, the various petroleum systems identified within the delta were combined into a single Tertiary composite petroleum system. Six assessment units were then defined that generally reflect the structural setting of Bangladesh and its hydrocarbon accumulations.
The assessment was extended to the limit of the continental shelf, the approximate limit of the lease blocks established by the government, and into about 200 m of water. Although much of the resource may occur in the deeper waters of the delta, the assessment team concluded that it would probably not be exploited within the next 30 years. The results of the special assessment are available at the following website: (http://greenwood.cr.usgs.gov /pub/bulletins/b2208-a/).
Comparison of results
The results of the USGS 2000, USGS/Petrobangla 2001, and HUC/ NPD assessments for undiscovered resources are shown in Table 1.
In spite of the differences in minimum field size and offshore area assessed between the USGS 2000 and USGS/Petrobangla 2001 assessments, the probability distributions are remarkably similar.
The low value in the HUC/NPD assessment is approximately equivalent to the 75th percentile in the other two assessments, the medium value approximately equivalent to the 30th percentile, and the high approximately equivalent to the 5th percentile. In general, the HUC/NPD assessment indicates less uncertainty than do the USGS 2000 and USGS/Petrobangla 2001 assessments.
Field size distributions
As of 2001 there were 19 discovered fields and 151 estimated undiscovered fields in Bangladesh that exceed or are calculated to exceed the 42 bcf minimum field size cutoff used by the USGS/Petrobangla Special Assessment (Table 2).
The estimated preliminary field size distributions of discovered gas fields, undiscovered gas fields, and discovered and undiscovered fields combined are illustrated in Tables 3, 4, and 5, respectively.
These data suggest that half the largest fields have already been discovered, although their ultimate sizes (past production plus remaining reserves) may increase with time. Furthermore, the calculated sizes of undiscovered fields fill in and smooth out the distribution of the discovered field sizes (compare Tables 3, 4, and 5).
About 16 large fields, eight discovered and eight undiscovered, out of a total of 170 fields are projected to contain a little more than 57% of the gas in Bangladesh, excluding the gas that may occur locally in the numerous fields that are expected to be smaller than the 42 bcf field size cutoff.
The calculated 54.3 tcf (Table 2) for the technically recoverable gas endowment is about 9 tcf below the 63.7 3P estimate of the HUC/NPD assessment. This difference may be a result of the relatively high minimum field size used by the USGS/Petrobangla Special Assessment
The future
It is the inherent uncertainty of the size of undiscovered gas reserves-resources and the projected amounts of internal gas consumption that stymies government of Bangladesh policymakers.
If anything, economic projections are uncertain and nonlinear, especially for periods of time exceeding more than a few years. However, assuming an average linear growth projection of gas demand in Bangladesh of 4%/year, Bangladesh's internal annual gas demand could exceed 2 tcf and cumulative production could exceed 50 tcf within 50 years.
While the assessed gas is significant, it will not come to market unless there is continuous development of existing fields and continuous exploration for new fields so that resources move continuously from the undiscovered realm into the discovered category.
Continual analyses of markets and potential markets are essential for the projection of demand (and potential production) into the future.
Findings and implications
The subjective assessments for the amount of technically recoverable, undiscovered gas in Bangladesh, as prepared by the USGS 2000 and USGS/ Petrobangla assessments are remarkably similar (median = 33.6-32.1 tcf, respectively) in spite of somewhat different parameters, such as the minimum sizes of fields selected and offshore areas assessed.
In comparison, using a different assessment methodology, the HUC/NPD team at their medium value assessed an even greater undiscovered resource than the two USGS assessments at the mean (41.6 tcf).
Both the volumes of the gas resource and the large sizes of the accumulations will permit Bangladesh to employ a range of development options in order to satisfy its needs for energy.
The three assessments indicate that Bangladesh is relatively well endowed in gas. In addition, it is expected that the hydrocarbon resource base of Bangladesh will increase as a result of new field discoveries (32.1 tcf) and technology driven field growth (12.8 tcf).4
It is also clear that, without continuous exploration and development of its undiscovered natural gas resources, Bangladesh will eventually consume the gas in existing fields and may find it difficult to replace the gas reserves in a timely fashion so that it can develop its economy in an orderly manner (Fig. 2). F
References
- Energy Information Administration, Annual Energy Review 2000, US DOE/EIA -038 (2000), 2001, p. 374.
- Government of the People's Republic of Bangladesh, Ministry of Power, Energy & Mineral Resources, Energy and Mineral Resource Division, Hydrocarbon Unit, "Bangladesh petroleum potential and resource assessment 2001," 2002, 10 p.
- Wandrey, Craig J., ed., "US Geological Survey-Petrobangla Cooperative assessment of undiscovered natural gas resources of Bangladesh; petroleum systems and related geologic studies in region 8, South Asia," US Geological Survey Bull. 2208-A, 2001 (http:// greenwood.cr.usgs.gov/pub/bulletins/ b2208-a/).
- Brown, Todd A., Shamsuddin, A.H.M., and Rickard, Michael, "Hydrocarbon resource base of Bangladesh," Proceedings of the 13th Southeast Asia Petroleum Exploration Society, Singapore, 2001.
Bibliography
Curiale, J.A., Covington, G.H., Shamsuddin, A.H.M., Morelos, J.A., and Shamsuddin, A.K.M., "Origin of petroleum in Bangladesh," AAPG Bull., Vol. 86, No. 4, 2002, pp. 625-652.
Government of the People's Republic of Bangladesh and Bangladesh Oil and Gas and Mineral Corp. (Petrobangla), "Petroleum exploration opportunities in Bangladesh," 1997, 44 p.
Shamsuddin, A.H.M, Brown, Todd A., Lee, Susan, and Curiale, Joe, "Petroleum Systems of Bangladesh," Proceedings of the 13th Southeast Asia Petroleum Exploration Society, Singapore, 2001.
USGS World Energy Assessment Team, "US Geological Survey world petroleum assessment 2000—description and results," US Geological Survey Digital Data Series DDS-60, Ganges-Brahmaputra delta geologic province 8047, 2000 (http://greenwood.cr.usgs.gov/energy/WorldEnergy/DDS-60/).
The authors
Bob Milici ([email protected]), a research geologist in the US Geological Survey's energy program, is a former commissioner of mineral resources and state geologist for the Commonwealth of Virginia (1979-91) and a regional geologist for the Tennessee and Virginia Geological Surveys (1958-78). During the past 11 years he has worked on fossil fuel assessments in the Appalachians and South Asia.
Peter D. Warwick is employed by the USGS as a research geologist in the Energy Program. His scientific and technical specialties include sedimentology, stratigraphy, coal and petroleum geology, organic petrology and geochemistry, field geology, and geographic information systems. He has MS and PhD degrees in geology.
Emil D. Attanasi is an economist. Since 1972 he has been with the USGS working on resource assessment methods and the integration of economics into USGS oil, gas, and coal assessments. He received a BA in mathematics from Evangel College and a PhD in economics from the University of Missouri.
Craig Wandrey is a petroleum geologist who has worked at the USGS for the past 15 years and in the petroleum industry before that. Since coming to the USGS he has been involved in numerous oil and gas assessments in the US and South Asia. He is presently the USGS World Energy Project regional coordinator for South Asia.
