The Financial Express

Gazprom set to drill three gas-wells at highest-ever cost

Experts term it unjustified, massive theft

| Updated: September 17, 2020 13:30:10

Lankabangla and Fianancial Express Lankabangla and Fianancial Express
Illustrative photo Illustrative photo

Russian oil and gas exploration company Gazprom is set to get the job of drilling three more gas-wells in Bhola at US$ 21.19 million per well that is the highest-ever cost in the country.

The cost is almost double the drilling cost of the state-run Bangladesh Petroleum Exploration and Production Company Ltd (Bapex), and around 23 per cent higher than the average drilling cost of a well by the US-based Chevron in Bangladesh, a senior Petrobangla official told the FE.

The cost is around 28.65 per cent higher than the previous cost of $16.48 million per well, when the drilling was carried out by Gazprom in the country.

The gas wells that Gazprom is eyeing to drill are - Tabgi-1, Bhola North-2 and Ilisha-1.

When contacted, Energy Secretary Anisur Rahman said the proposal processing committee (PPC) of the Energy and Mineral Resources Division, under the Ministry of Power, Energy and Mineral Resources (MPEMR), has recently rounded off the negotiation with Gazprom through a virtual meeting.

The negotiation is awaiting final nod from the Prime Minister, who is also the MPEMR minister, and the Cabinet Committee on Public Purchase, he added.

Bapex Managing Director Mohammad Ali did not make any comment over the negotiation with Gazprom.

Gazprom has been selected for the drilling job under the Speedy Supply of Power and Energy (Special Provision) Act 2010. The law has a provision of immunity to those involved with a quick fix.

Energy experts said the cost is 'unjustified' and 'unrealistic' given the current context of coronavirus pandemic, when the international prices of oil and natural gas are at record low, and the international oil companies (IOCs) do not have much exploration work in hand.

Rental fees of rig, an important equipment of hydrocarbon exploration, also fell drastically across the globe, as most of the well-drilling rigs are now idle due to inadequate exploration jobs globally, market insiders said.

Gazprom has so far drilled 17 wells in different areas across the country since 2012.

When contacted, energy adviser of Consumers' Association of Bangladesh (CAB) Professor M Shamsul Alam termed the negotiation with Gazprom (an initiative for) 'massive theft.'

A vested quarter is involved to pocket huge money by depriving the country, he alleged.

If (the drilling work is) awarded at a higher cost, it will raise the overall cost and slow down the growth of industrialisation, said Mr Alam.

"We are an ill-fated nation," he lamented.

Professor Badrul Imam of Geology Department of Dhaka University said if awarded, the drilling work will not only be expensive, but it will also undermine Bapex.

Bapex should be given the responsibility of drilling wells in Bhola, which is considered one of the major gas hubs of the country after north-eastern Sylhet region.

Bapex discovered gas at Shahbazpur in Bhola, opening up the potentials of the prospective new gas hub, Mr Imam also said.

Besides, well drilling by Gazprom in Bangladesh has bad track record also. Its drilling was faulty in some wells, which were later developed by Bapex, he added.

Earlier this year, Gazprom inked two memorandums of understanding (MoUs) with Petrobangla and Bapex to jointly carry out gas-field development activities, like conducting two-dimensional (2D) and three-dimensional (3D) seismic surveys in Bhola.

Gazprom is to build a strategic partnership to implement different projects jointly under the deal with Petrobangla.

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