The government is set to award onshore areas to the International Oil Companies (IOCs) for exploration of oil and gas which was previously earmarked for the National Company BAPEX.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid on Thursday announced it at a meet the "Energy Reporters programme" organized by 'Forum for Energy Reporters', Bangladesh, at Bidyut Bhaban in the city.
Bangladesh has not offered any onshore oil and gas blocks for exploration, since 1997as per court verdict. Later the Court lifted its ban and in April, 2014 the Energy Division in principle agreed to allow IOCs to conduct oil and gas exploration in onshore areas.
The onshore areas are currently proscribed for Bangladesh Petroleum Exploration and Production Company Limited (Bapex) in accordance with the government's decision to keep onshore areas for them as it is 'less risky' compared to the offshore areas.
"As part of our plan to increase the gas production, we will award the rest of onshore areas, apart from Bapex-held ones, to the international oil companies (IOCs) through international bidding," the minister told reporters at the function
He said, "We asked Petrobangla for mapping the areas, creating ring fence for Bapex-run fields, then we will go for fresh onshore bidding."
Responding to question on recent press conference of Transparency International, Bangladesh (TIB) regarding Ralpal power plant, Nasrul Hamid refuted corruption charge brought by TIB.
"It's the Prime Minister's clear instruction that there will be no coal-mine where the farmers' crops fields are affected," he replied when asked about the government's decision on coal-mining. "The government will not go for any open pit coal mining where the crops land will be destroyed."
The minister also announced that the government will not give any new gas connection to any household consumers or to any industry for captive power generation. "But industries, located in specific economic zones, will get gas connection only for their boiler operation, not for any other purpose," he said.
Currently, almost the entire natural gas production comes from onshore gas fields, which contribute around 2,480 million cubic feet per day (mmcfd) of gas. Of the onshore production, the IOCs share around 55 per cent of the country's overall output, while the state-owned gas companies, including Bapex, contribute the 1,047 mmcfd of gas, according to statistics provided by Petrobangla.
Following the court verdict, Petrobangla's decision of not offering onshore blocks to foreign companies disappointed the IOCs, including US-based Chevron, which were eyeing increased levels of engagement in new onshore blocks in the country.
At a series of parleys with the IOCs, energy sector policy makers discussed the issue and reversed the decision in a meeting chaired by energy adviser Dr Tawfiq-e-Elahi Chowdhury, at the energy ministry last year.
"Bapex is now sitting idle. But the state-owned exploration company will be strengthened so that it should not be kept idle," the State Minister said.
Describing the government plan to enhance the energy output, Hamid said the government had drawn up short, medium and long term strategies to address power and energy sector. In the past years, they set up many rental and quick rental power plants as part of short term strategy.
"Now, we are concentrating on medium and long term strategies. The Prime Minister will launch four new power projects on May 3 through video conference. Another 13 power plants will come into operation next year to meet the growing demand of energy and power," he added.
He informed that at present, about 71 percent of the country's people are getting electricity and the supply has been load-shedding free. But, now there are disruptions in power supply due to problems in transmission and distribution system. "It will take 3-4 years more to ensure uninterrupted power supply.
Hamid said huge projects have been undertaken by the PDB, DPDC and Desco to introduce pre-paid metres for power consumers in next three years and to add green energy, the government is now emphasising on development of solar power. Some large projects have been identified to implement having total capacity of 100 MW.
Responding to different questions about the government measures to address the growing demand, the state minister said the government has taken a number of projects to increase gas production which include import of LNG and popularise the LPG and in all projects the private sector will get chance to contribute.
"If needed, the government will provide subsidy to the LPG to bring its price to an affordable level," he added.
Energy secretary Abu Bakar Siddique said, "A new model PSC is being examined by the energy division for a new round of offshore bidding to be invited in 2016 where the issue may be considered."
The IOCs are currently operating in eight blocks in the country-five onshore and three offshore. However, the Bapex, a wholly owned subsidiary of the Petrobangla, incorporated in April 1989, has experience in carrying out oil and gas exploration only in onshore areas.