Bangladesh, a nation blessed with abundant natural resources, is undertaking a significant endeavor to tap into its offshore oil and gas potential. In a bid to bolster its energy security and expand its resource base, Petrobangla (Bangladesh Oil, Gas and Mineral Corporation) recently initiated an international tender for offshore oil and gas exploration.
This initiative, supported by a revamped model production sharing contract (PSC), has garnered substantial interest from international oil companies (IOCs). TGS (Tomlinson Geophysical Services Inc.), formerly TGS NOPEC Geophysical Company ASA is an energy data and analytics company. It gathers, interprets, and markets seismic and geophysical data regarding subsurface terrains worldwide in order to evaluate oil and gas formations for drilling operations.
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However, the revival of exploration tenders by Petrobangla is a crucial moment in Bangladesh’s quest to unlock its offshore petroleum potential. After a long break, international tender signals a renewed dedication to exploring and utilizing the country’s natural resources. With the bidding round scheduled to end by September, Bangladesh is ready to draw investments from esteemed international oil companies (IOCs), speeding up offshore exploration activities.
Need investment for offshore gas extraction
Prime Minister Sheikh Hasina’s recent announcement regarding offshore gas extraction signals a significant strategic shift in Bangladesh’s energy policy. The move comes amidst persistent energy scarcity challenges and underscores the government’s commitment to diversifying energy sources. Offshore gas extraction emerged as a key strategy to bolster the country’s energy security and meet growing demand. Recognizing the importance of investment in this endeavor, Prime Minister Hasina underscored the government’s commitment to creating an investment-friendly environment conducive to economic growth.
In February 2022, the government achieved a significant milestone by extending electricity access to all parts of Bangladesh, following a concentrated effort over the past decade. However, this achievement was overshadowed by the outbreak of the Ukraine war, leading to disruptions in power and energy supply across the nation.
Comprehensive Seismic Data Survey
Further enhancing prospects, TGS in partnership with SLB (Schlumberger) and Petrobangla to accomplish an extensive 2D multi-client seismic data survey spanning more than 75,000 square kilometers across all 24 blocks earmarked for the bidding round. This thorough survey, encompassing 12,636 line kilometers, reached its completion milestone in April 2023.
TGS states that the offshore areas of Bangladesh remain largely underexplored, with immense untapped potential for new oil and gas discoveries. The newly acquired high-quality seismic data will provide explorers with valuable insights into subsurface structures and geology, enabling them to de-risk and prioritize the most prospective areas.
TGS Expedites Offshore Exploration with Data Expertise
TGS, plays a pivotal role in facilitating foreign investment in offshore exploration projects worldwide. During an interview, Paul Young, Senior Business Development Adviser at TGS, highlighted the company’s role in promoting foreign investment in exploration by acquiring and recording subsurface data.
TGS’s involvement goes beyond data provision; they also assist governments in refining fiscal terms and conditions to attract oil and gas companies. This collaboration resulted in the release of a new contract by Petrobangla, making Bangladesh more competitive for investment. Young noted a positive response from IOCs, with multiple companies expressing interest in exploring Bangladesh’s offshore potential.
We’re (TGS) able to provide data to companies, firstly to assess the area so they can make a good bid. Secondly, they can use that data to help fulfill the work program that they promised to the government if they’re awarded a block. It fast-tracks the exploration process,“
– Paul Young, Senior Business Development Adviser at TGS
Elisabeth Gillbard, senior geologist at TGS, underlined the vast petroleum potential of Bangladesh’s offshore areas, particularly the Bengal Fan. Despite global exploration in similar systems, Bangladesh’s offshore remains largely unexplored. Gillbard emphasized the need for further exploration, highlighting the potential for significant discoveries in deeper waters.
Addressing the significant untapped opportunities, Gillbard noted-
“While equivalent systems worldwide have undergone thorough exploration and exploitation for petroleum, Bangladesh’s offshore regions remain largely untapped.”
– Elisabeth Gillbard, senior geologist at TGS
Driving Policy Reform
TGS’s influence transcends data provision, as it actively contributes to policy reform initiatives aimed at creating a conducive environment for investment. Young highlights TGS’s role in providing feedback to governments, which has led to the revision of fiscal terms and conditions to attract international investment. This collaborative approach underscores TGS’s commitment to fostering a competitive landscape that attracts global oil and gas companies.
Reflecting on the response from IOCs, Young notes TGS’s success in attracting interest from key players across the globe. The participation of companies from the US, China, Japan, Europe, and Malaysia’s promotional seminars underscore Bangladesh’s growing appeal as a promising investment destination.
Offshore Industry in Bangladesh
The term ‘offshore block’ refers to specific areas of property in a body of water designated for mineral exploration. Bangladesh’s acquisition of maritime territory from Myanmar in the Bay of Bengal has increased the number of exploratory blocks in its Exclusive Economic Zone. In total, Bangladesh has allocated 26 blocks in the Bay of Bengal, comprising 15 deep-sea and 11 shallow-water blocks. The shallow blocks range from water depths of 20 m to 200 m, covering exploration areas between 4500 and 7700 square kilometers each. Deep-sea blocks range from water depths of 200 m to 2000 m, with exploration areas spanning from 3200 to 12453 square kilometers. Bangladesh aims to conduct investigations using its own resources in some shallow-water blocks, while deep-water blocks are open for international bidding to promote economic growth and trade opportunities.
Exploration bidding has occurred in 1993, 1997, 2008, and lastly in 2012. In 2012, the government invited international oil companies (IOCs) to explore hydrocarbons in 12 blocks in the Bay of Bengal, comprising 9 shallow and 3 deep-water blocks. Subsequently, joint ventures like ONGC Videsh Limited (OVL) & OIL India Limited (OIL) signed production sharing contracts (PSC) for Blocks SS-04 and SS-09 with the Bangladesh government, PETROBANGLA, and BAPEX in 2014. KrisEnergy and Santos Sangu Field were jointly awarded the SS-11 block for exploration in the same year. Additionally, South Korean IOC Posco Daewoo Corporation was awarded offshore block DS-12 in 2017. These companies conducted extensive surveys initially to confirm the presence of mineral resources.
Remarkable Offshore Structures in Bangladesh
The Sangu Gas Field, Bangladesh’s first commercial offshore gas field discovered in 1996, is located east of the Bay of Bengal in offshore Block SS 04. Initially operated by an Australian company, Santos, operational rights were later transferred to British oil company Cairn Energy in 1998. Initially estimated to produce about 1612 billion cubic feet (BCF) of gas, production gradually increased to 180 million cubic feet (MCF) per day. However, production levels started declining abruptly in 2009, leading to its abandonment in 2013 after extracting a total of 487 BCF of gas. The government of Bangladesh planned to repurpose the offshore field for LNG storage. A recent study reassessed the field’s total capacity at 1056 BCF, with 847 BCF identified as recoverable. Advanced technology is recommended for extracting the remaining 358 BCF.
Conclusion
With the support of international oil companies and the expertise of companies like TGS, Bangladesh is well-positioned to embark on a new era of offshore exploration and development. As the bidding round progresses, all eyes are on Bangladesh as it takes significant strides towards realizing its offshore energy ambitions.
