Discoveries, developments boost interest in Bangladesh

Eastern Bangladesh Fields, Discoveries [89784 bytes]

The government of Bangladesh is expected to open a new exploration licensing round by yearend, following approval of a new model production sharing contract this fall.

Initial interest in new licenses from international companies is high, and a number of new contracts are expected to be signed in 1997, said Wood Mackenzie Consultants Ltd., Edinburgh.

State firm Petrobangla is expected to give companies 90 days to submit bids once the exploration round is announced. It is not known whether the round will include rights to undeveloped or partially developed fields.

"If subsequent drilling is as successful as it has been in the past," said Wood Mackenzie, "then the future for the oil and gas sector in Bangladesh appears very promising."

Discovery of multipay Sangu gas field by Cairn Energy plc, Edinburgh, early this year created great interest among international companies. The analyst estimated Sangu reserves at 1 tcf of gas. Sangu, on Block 16 in the Bay of Bengal, is being considered for development with a small production platform and a pipeline to shore (OGJ, Mar. 4, p. 42).

Existing licenses

Five licenses were awarded foreign firms as a result of 1993 reforms to petroleum legislation: Blocks 15 & 16 offshore to Cairn, and land Blocks 12, 13 & 14 to Occidental Petroleum Corp.

The Oxy license areas contain a number of gas/condensate fields operated by Petrobangla, said the analyst. One includes the Jalalabad discovery, which Oxy has a license to develop.

Cairn has drilled two wells in Sangu field and acquired seismic data on Block 15 with the aim of drilling a new pool wildcat in early 1997. This license includes rights to an existing discovery, Kutubdia, in the bay.

Oxy was said to have applied to drill an exploration well in the Moulavi Bazar prospect on Block 14, and is expected to spud the well in 1997.

Petrobangla has drilled a number of wells recently, most notably making the Shahbazpur discovery in 1995, which has estimated reserves of 400 bcf of gas.

Production prospects

Wood Mackenzie reckoned remaining total reserves in Bangladesh amount to 60 million bbl of liquids and 10.6 tcf of gas. Production to date is estimated at 4.5 million bbl of liquids and 3 tcf of gas.

Most of the fields are in the eastern foldbelt and have stacked Miocene and Plio- cene reservoirs (see map, OGJ, Nov. 1, 1993, p. 31).

Petrobangla began producing the country's only oil field, Sylhet, in 1987. However, wax buildup in the export pipeline led to the field being shut in during July 1994, and there is no sign of Sylhet being put back on stream.

Associated liquids production currently amounts to about 1,500 b/d, said Wood Mackenzie, but in 1998 Petrobangla's Kailastila field is expected to begin raising output from 600 b/d now to a plateau of 2,000 b/d in 2005.

Also, Oxy is expected to bring on stream Jalalabad field in 1997, with the aim of reaching plateau liquids production of 1,000 b/d by 1999.

"Gas production has been gently but continuously increasing since 1985," said Wood Mackenzie. "In 1994 gas production was boosted when Petrobangla's Rashidpur field was brought on stream. Initial production of 25 MMcfd quickly rose to just less than 100 MMcfd by end 1995."

From a total 330 MMcfd in 1985, gas production is expected to reach a peak of more than 1.2 bcfd in 2001 as Cairn and Oxy complete developments.

"Petrobangla has plans to bring several other fields on stream over the next 2 years, including Belabo, Fenchu- ganj, Beanibazar, and possibly Shahbazpur," the analyst said.

The gas and gas/condensate reservoirs are mainly the Lower Miocene Bhugan and lower Middle Miocene Boka Bil formations. Both formations comprise the Surma Group.

"It is expected that Occidental will bring Jalalabad field on stream during 1997, followed by Cairn with Sangu field in 1998. Both Occidental and Cairn are considering independent power projects."

A serious power generation shortage is developing in Bangladesh, but successful exploration could lead to available gas supply outstripping total domestic gas demand.

"So an alternative market would need to be developed," concluded Wood Mackenzie. "One possible solution would be to export gas to the east coast of India or across the Bangladesh/India border to Calcutta. However, for this to happen, a number of political hurdles would need to be cleared."