Bangladesh Approves ConocoPhillips Gas Exploration Plan

Bangladesh approved a plan to explore oil and gas in two deep-sea blocks by ConocoPhillips, according to a government adviser.

"The firm has been permitted to explore in the deep sea blocks and we hope to sign the production sharing contract (PSC) within two weeks so that it can begin seismic surveys and exploration in the coming winter season," said Tawfiq-e-Elahi Chowdhury, energy adviser to Prime Minister Sheikh Hasina.

ConocoPhillips won these two deep sea blocks for oil and gas exploration in 2008, but could not sign the PSC with state run Bangladesh Mineral Oil & Gas Corporation (Petrobangla) as part of these blocks was also claimed by neighboring countries.

As per the latest approval, ConocoPhillips is not allowed to explore the areas of the blocks that are claimed by Myanmar or India.

Bangladesh at present faces acute gas shortages, with production at around 2,000 million cubic feet (mmcft) per day against demand of more than 2,500 mmcft a day.

The government forecasts that current gas reserves will run out in the next five years at the present consumption rate.

ConocoPhillips will invest about $111 million and has offered a bank guarantee of the same amount for the two blocks. Energy officials say it may take five years for the blocks to yield results.

Bangladesh's proven gas reserves are 7.3 trillion cubic feet (tcf) and probable reserves are 5.5 tcf.

Source: Reuters