Gas - Some facts and figures [Nov 5, 2001]

Date: Mon Nov 5, 2001 9:47 am
Subject: [ALOCHONA] Economy Watch: Gas - Some facts and figures



It is not wise to rush for any sensitive decision which is closely related
to the peoples interest. I am talking about the Government's position about
the issue of gas export. Yet they didn't take the final decision, but looks
like in an agreeable position for the export of gas. I don't know exactly
but I am afraid government is under serious pressure from any external
power. Otherwise they suppose to not to support any issue processed by
earlier government. Despite any kinds of influence, we hope government will
take more time to estimate the proven reserve of gas and the future impact
of export on our country.

I am not an expert in this sector and dont have enough knowledge. But I read
some articles on this issue and I got some fact and figures which I prefer
to share with other alochoks (I know there are many experts in alochona who
knows much better than me. I am requesting them to write me if any figure
looks wrong):

Total current reserve of gas: 11 TCF (trillion cubic feet)
Demand of gas after next 50 years: 70 TCF (an estimation based on 13% growth
rate)
Current consumption can run: 20 years (with 11 TCF)
Total consumption in a day: 1100 MCF (million cubic feet)
Annual requirement: 401 BCF(billion cubic feet)
Consumer rate from total population : 18% of total population
Expecting increase rate of consumption: 13% per annum

In the world of exploration of natural resources there is a ratio and
percentage based on what the exploring company decides the amount of
reserve and the feasibility of production. If the feasibility is less than
95% it is not wise to take any firm decision about the reserve. That's a
common sense in oil and gas exploring world. Now lets see what is our
position.

According to the joint survey of USGS (United States Geographical Survey) &
Petrobangla, Bangladesh have 5% possibility of having 62 TCF, 50% of having
32 TCF 95% possibility of having 8 TCF. So the our total secured
reserve(which is called proven reserve) is around (11+8)= 19 TCF. We should
take all our steps based on this quantity.

Can we export our gas from this reserve? I ask myself. We are talking about
the alternative energy resource after 20 years. But who can gurantee that
kind of technology will be available for us or we will have enough money to
use that? We still couldn't supply uninterrupted power supply even in our
capital city Dhaka.

Now I will try to give a brief description how much Bangladesh can earn from
a gas field. This is based on the existing PSC (Product Sharing Contract).
For every exploration average cost of recovery is 50% of total cost. Balance
gas is distributed in 60/40 ratio. A picture can be found from the following
data about two company Shell's & Unocal's two gas field:

-Shell producing 150 TCF in Sangu everyday. Cost recovery= 90 TCF, Shell= 30
TCF, Bangladesh=30 TCF
-Unocal 100 TCF Jalalabad everyday. Cost recovery=55 TCF, Unocal=16.875 TCF,
Bangladesh=28.125 TCF
-Shell is selling their full share(120 TCF) to Bangladesh @2.89/1000CFT=
$346,000.00 daily
-Unocal is selling their full share(71.875 TCF) to Bangladesh
@2.784/1000CFT= $200,100.00 daily

So we can see that Bangladesh can get maximum 30% of total reserve. We are
purchasing balance 70% from the foreign companies to meet our domestic need.
If we explore additional gas now with the help of foreign company they cant
sell it domestically because our domestic need already fulfilled. We may
need additional gas after 20 years. But who will wait for another 20 years
after investing a lots of money. That's why they want to sell the gas
outside of Bangladesh right now. For doing that they are trying to convince
us (our government) with showing high reserve estimate. If decide to export,
we may run out of gas before our estimated period. Example of Nigeria was
rightly pointed out by Mr Badruzzaman and others.

One more thing:
Cant we rebuild BAPEX? We shouldnt forget they have explored 6 gas field & 1
oil field in Bangladesh from out of their total 28 digging work. The ratio
is very much respectable 4:1 and very exceptional in the exploration world.
Isnt it better to use our own people as much as possible? This will help us
to be more self-dependent and to have accurate information about our own
resources?

Peace for all,

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**Note: My article in Alochona