Dhaka, August 1:

Keen to boost exploration efforts to find new gas and oil reserves, Bangladesh is planning to offer new blocks by the year-end even as it mulls inviting foreign investment in setting up refineries. “We are embarking on the third round of exploration by the end of this year. We are currently engaged in the preparatory work before going in for the international bidding process,” said Bangladesh energy advisor Mahmudur Rahman, during an energy meet organised by the US Energy Association (USEA) and USAID, “Though we have not finalised the blocks, there will definitely be some offshore blocks.” The process of finalising some of the blocks has been held up due to court injunction, the official said. He said the process to get the order vacated was on along with preparation for the bidding process and finalisation of blocks. Rahman, who also heads the Bangladesh Board of Investment, stated that “being an international tender, Indian companies are free to bid for the blocks”.

Bangladesh last invited bids for exploration blocks in 1997. Under the earlier two rounds of bids, Bangladesh had offered 10 exploration blocks to companies like US’ Unocal, Britain’s Cairn Energy, Canada’s Niko Resources and state-owned Bangladesh Petroleum and Exploration Company (BAPEX). Experts have estimated Bangladesh’s gas reserves to be about 30 trillion cubic feet (TCF), half of them proven reserves, and coal reserves equivalent to 70 TCF of gas. So far Bangladesh is estimated to have utilised about 5 TCF of gas reserves.

Targeting higher economic growth, Bangladesh is planning to raise its gas production from 1,530 million standard cubic feet per day (MSCFD) currently to 1,700 MSCFD by October next year to meet the growing demand from the industry, transport and domestic consumers. Encouraged by gas discoveries in the Bay of Bengal basin by India and Myanmar, Bangladesh is also planning to offer offshore blocks in the next round of bids. According to Bangladeshi officials, so far offshore exploration has only been done within a 10-metre radius. Besides exploration, he said theyare studying investment offers received for setting up refineries.

“There is tremendous interest among several countries to help us set up refineries. Interest has been shown by Saudi Arabia, the UAE, Kuwait and Qatar. Some of our local companies are in touch with companies in these countries for possible joint ventures,” he said.

Bangladesh currently imports most of its requirement of about 3.7 million tonnes of crude as it has only one out of 24 gas fields producing some oil.

“Our refinery is currently processing about 1.2 million tonnes of crude. We are importing 2.5 million tonnes of petroleum products and that is the capacity we are looking for in the new refinery if you consider only the domestic consumption,” he said. On possible Indian participation in the refining activities, he said, “On principle, I foresee no problem in Indian companies participating in the bidding process and targeting outside markets besides domestic consumption by setting up a five million tonnes capacity refinery.” Rahman said Bangladesh was also mulling a proposal from a Malaysian company for conversion of gas into liquid. Bangladesh is also exploring alternative energy sources like solar energy, wind energy and biogas.