Better prices may attract oil companies to Bangladesh

Energy Adviser Tawfiq-e-Elahi Chowdhury addresses a roundtable on energy at the CIRDAP auditorium in Dhaka yesterday. Photo: Star

Bangladesh should offer attractive gas prices to international oil companies to encourage them to invest heavily to search for new discoveries, experts said yesterday.
They urged the government to develop coal mines without further, as Bangladesh's gas reserves are fast depleting and reliance on expensive imported oil is increasing.
The plea came at a roundtable styled "Primary energy: a big challenge to vision 2021", organised by Energy & Power, the country's leading energy magazine, at the Cirdap auditorium.
M Tamim, former energy adviser to a caretaker government, said the country must tap its indigenous resources, as it would be tough to meet the country's energy demand on import-based energy in the coming future.
He urged the government to revise its energy pricing so that international firms can be lured in to Bangladesh for exploring oil and gas fields.
"If we limit onshore fields to BAPEX [Bangladesh Petroleum Exploration and Production Company Ltd] and offshore fields to international oil companies [IOCs], we will not get any gas."
Prof Rafiqul Islam, who was a state minister for energy between 1996 and 2001, too, called for better pricing for IOCs.
Although the country has sorted its electricity crisis for the short-term, the country is yet to take measures to maintain the status quo, he said.
He, therefore, recommended extensive diplomatic efforts to bring in hydropower from India and Nepal.
Islam went to criticise Petrobangla for misguiding the government by exaggerating the discovery of new gas fields. "These fields were basically discovered in 1996-97.”
“The gas prices have to be raised to make IOCs interested in exploring energy resources in the country,” said Andrew DeGaris, president of Santos Bangladesh.
Energy Adviser Tawfiq-e-Elahi Chowdhury, however, said the government is seriously considering revising the fiscal regime to woo IOCs to the country.
Although behind schedule, the country would still go ahead with its plan to import 500mmcfd liquefied natural gas from abroad, he said.
The former bureaucrat also urged the industrialists and entrepreneurs to seek alternative fuel sources in case the country runs out of gas.
"All industries can't rely on gas and captive power. Besides, they need to take measures to ensure energy conservation and energy efficiency."
About the alleged environmental impact of the planned Rampal coal power plant, he said: "The proposed plant is very far away from the Sundarbans and the buffer zone. Still some people are scared."
During his presentation, Khondkar Abdus Saleque, an energy adviser to Afghanistan, said Bangladesh's future energy security lies on fossil fuel, as the country would not be able to produce more than 5 percent of its electricity from renewable energy sources due to a lack of hydropower potential.
He said the good quality coal in the northern region could help the country produce at least 10,000 megawatt of electricity in the next few years.
The expert said Bangladesh, Bhutan, Nepal and India can jointly invest in hydropower projects and share power in the regional grid.
Saleque also said Bangladesh should mine coal on priority basis, adopting off-the-shelf proven mining method.
Mahbubul Alam, president of Chittagong Chamber of Commerce and Industry, said machineries worth Tk 3,000 crore are lying idle in the port city, as factories could not be set up due to gas scarcity.
"We can't set up new industries due to an adequate supply of gas. As a result, we are not being able to create jobs and contribute to the poverty alleviation efforts of the nation," he said.
Mosharraf Hossain, a former chairman of Petrobangla, said there is no alternative to gas exploration.
"We have to bring in IOCs as well as strengthen BAPEX. We have to amend Production Sharing Contract and make prices attractive. Nobody will come if we continue to maintain gas prices set decades ago."
Ijaz Hossain, a professor of chemical engineering at Bangladesh University of Engineering and Technology, said gas-based power plants are being set up in the country although the supply of energy has not been ensured.
He also said there is no gas utilisation policy. "Now the energy ministry, instead of Titas Gas Distribution Company, provides gas connections."