Gas exploration best option to beat energy crisis: ICCB
Bangladesh would have faced an energy crisis even if the Russia-Ukraine war had not taken place as production at local gas fields has been declining since 2015 and will continued to drop in the near future, according to the International Chamber of Commerce Bangladesh (ICCB).
In a news bulletin released yesterday, the ICCB suggested exploring untapped gas resources amounting to 32-34 trillion cubic feet would ensure a stable gas supply for the country for the next 30 years.
The global energy landscape has been severely impacted by increased market uncertainty due to the Russia-Ukraine war.
Even before the war began, there was a rebound in energy demand triggered by supply constraints and price spikes for multiple commodities.
While gas prices hit a 30-year low at the start of the pandemic in 2020, it reached a nearly two-decade high in 2021 and power prices showed similar volatility, the ICCB said.
"The Russia-Ukraine war is certainly a reason for the global energy crisis that has also affected Bangladesh but experts say with all certainty that even if the war had not taken place, the country would have still faced an energy crisis," it added.
ICCB then said production at local gas fields has been declining since 2015 and will continue to decline in the near future. On the other hand, geoscientific studies testify that there is more untapped natural gas in Bangladesh than what has so far been extracted.
A two-year joint study in 2001 by the US Geological Survey (USGS) and Petrobangla shows that Bangladesh has a mean probability of 50 per cent of undiscovered natural gas resources to the tune of about 32 trillion cubic feet.
Another joint study by the Norwegian Petroleum Directorate and Hydrocarbon Unit that same year suggested the mean probability of Bangladesh's undiscovered gas resources is 42 trillion cubic feet.
In 2011, European oil and gas consultant Ramboll updated the undiscovered gas resource assessments for Bangladesh and suggested that it is 34 trillion cubic feet in 90 per cent mean probability.
Although Bangladesh has further potential in the gas sector, the number of exploration gas wells is less than many other gas basins in the world.
Bangladesh has an area of 147,000 square kilometres and has so far drilled about 100 exploratory wells in total.
On the other hand, the Indian state of Tripura that has an area of 10,000 square kilometres has drilled more than 150 exploratory wells. This statistic shows how poor the rate of gas exploration in Bangladesh actually is and yet, the country has discovered more reserves than Tripura.
Of Bangladesh's 25,500-megawatt (MW) generation capacity, 3,500 MW is off-grid (solar home and captive), while 4,000 MW cannot be operational because of forced/unforced shutdowns and fuel shortage.
Bangladesh has started importing liquefied natural gas to meet the present crisis and future need for electricity generation.
Bangladesh will become a middle-income country in 2026 and as such is going to lose a number of the benefits enjoyed as a least developed country.
Besides, with declining foreign exchange reserve, the country is expected to be hard-pressed in the next 2-3 years, when the debt repayment comes due.
In addition, $26 billion debt repayment of private sector borrowing may also make it difficult to manage foreign debt repayment.
Comments