"The basic investment policy [of Bangladesh] is very well thought out and there is a good set of working conditions. Unfortunately that slows down due to too much bureaucracy," said Fawthrop, who has also been the longest serving chief executive officer (CEO) of Chevron Bangladesh [previously Unocal Bangladesh].

In an interview with The Daily Star last week prior to his departure from the country, Fawthrop pointed out that the government has to understand that the bidding round is a marketing issue and therefore Bangladesh will have to have a good understanding of the world market.

He noted that Bangladesh has been immensely benefited by the production sharing contract (PSC) with his company, which took all the risks and invested everything needed. Under PSC, with free gas given to Petrobangla as profit share, Chevron's gas, from all its fields, costs less than a dollar for most of the lifetime of gas production from these fields.

Serving in Bangladesh from late 2002 amid a gas export controversy created by his company, Fawthrop led Chevron to become the biggest and the most cost effective foreign oil company in the country. He has recently been assigned to lead Chevron's Nigeria operation.

Andrew believes that the country's gas extracted from land based discoveries cannot be exported due to high local demands. He said high domestic demands will require expansion of the Bibiyana field between 2011 and 2015.

But his company had refrained from developing Bibiyana gas field after its discovery in 1999 arguing that Bangladesh market would not be able to absorb it and therefore it had to be exported, Andrew's leadership changed the perspective in early 2003 and Bibiyana is now serving the country.

Unless there is a major off-shore discovery, the issue of gas export is unlikely to return, he said.

"If Bangladesh is lucky, there will be a big off-shore discovery. In case of such a big discovery, both the company and the country need to look at the best way to use it... only then the country might consider exports," he pointed out.

He believes that the disagreement over the Magurchhara blowout compensation claim between his company and the government will not affect the relationship.

"All legitimate claims have been paid. There is one outstanding claim by the environment ministry and we did our assessment through a third party initiative... There is now an ongoing discussion between Chevron and the Ministry of Environment on this matter," Fawthrop pointed out. "This is just one disagreement. We have resolved many issues over the last nine years."

Andrew Fawthrop's advice to his successor is that he should work closely with the government and all stakeholders in an onshore area. "We have a strong national workforce to depend on and we should continue our corporate responsibility programmes (CRP)," he said adding that such programmes are not just important for the communities, but also for the sustainability of the oil company. He noted that Chevron's CRP is continuously being evaluated and it has been receiving very strong feedback.

"It takes time to make a community comfortable about a foreign company. Now people smile at us and shake hands," he added.

BIBIYANA
The Bibiyana field is Chevron's biggest stake in Bangladesh. With an initial assumption that this field has a reserve of 2.4 trillion cubic feet (tcf), Chevron set up a gas processing plant of 600 million cubic feet per day (mmcfd) capacity. Its contract with Petrobangla outlines a supply of 500 mmcfd.

Chevron invested a total of 250 million US dollars to develop the field that started gas production from March this year at the rate of 200 mmcfd. It is now producing around 300 mmcfd from five wells with 2000 litres of condensate. Chevron expects to produce 600 mmcfd by August.

Fawthrop noted that all the drilling at Bibiyana will be completed by June this year. "Then we will prepare a new [reserve assessment] model -- which will take three to four months. Then we will have a good idea about the proven reserve of this field," he said adding, "We believe Bibiyana is bigger than 2.4 tcf. After we get new information, we can sit with Petrobangla to discuss further development plan for the field."

The launching of the Bibiyana field now gives the chance for all the gas fields of the country to temporarily shut in one by one to run detailed analysis programme. "Later this year, we will shut in the Jalalabad and Moulavibazar fields to run detailed analyses of the size of the fields," he added.

Before Bibiyana came into operation, the gas fields could not afford to rest for a day even for such an important work, which would immensely help improve gas supply management of the country.

The Jalalabad field has been operating for eight years and the one in Moulavibazar for two years. According to Petrobangla, Jalalabad has a proven reserve of 1.1 tcf and Moulavibazar 0.4 tcf.

Fawthrop said after completing a seismic survey in Block 7, Chevron is now analysing the data to detect potential drilling sites. This means Chevron will 'absolutely continue to stay in Bangladesh'. "Chevron dismisses quitting from Bangladesh," Fawthrop asserted.

COST ISSUES
It is often said that gas produced by international oil companies is very costly, but Chevron's gas from Jalalabad costs only 98 US cents per unit and the prices for gas from the fields of Moulavibazar and Bibiyana are also projected to be around a dollar in the long run.

Fawthrop claims that with 90 percent of Chevron's workforce being local, the company's operating cost is among some of the lowest in the country. "Our fields were operating at more than 99.6 percent efficiency last year," he said.

Explaining why Chevron's Bangladesh operation is cost effective he said, "Chevron runs three fields and one exploration block from one office. This contributes to low cost operation."

Besides, as Chevron's Jalalabad field's cost recovery phase is over, the cost of its gas has become very cheap.

The Moulavibazar field was developed at a very low cost of 42 million dollars and only a small part of the investment remains to be recovered. "Our daily cost may be higher than that of Bapex. But we implemented this project very fast and made ourselves competitive with Bapex," he pointed out.

Chevron also relinquished all areas under blocks 12, 13 and 14 except for the three producing gas fields.

"We are very pleased with our performance," Fawthrop said adding, "We don't believe in unnecessary spending to make our cost recoverable investment higher. We believe that profit is better than cost recovery."

Lauding Petrobangla's technical expertise, he emphasised continued training of all technical and auditing staff to keep them updated on the latest global practices.