Vol. 4 Num 274 Sat. March 06, 2004  

Energising the engine of growth

Energy is fundamental to the quality of our life. It is also the engine of growth in the world economy. Hence, having considerable oil and gas resources has permeating and extensive effect on country's economic development. It fosters positive economic growth, provides greater employment opportunities and over all improves standard of living.

Bangladesh ranks as one of the world's most significant, under evaluated hydrocarbon provinces with 64 exploration wells. The country comprises one of the largest fluviodeltaic-slope fan complexes in the world -- the Bengal Fan. The western Bangladesh and the offshore areas are fairly unexplored. But considering the 22 gas discoveries and one oil discovery, Bangladesh has a very high historical exploration success rate of about 35 percent, very strong by world standards.

Petroleum system
In Bangladesh, the western platform shelf (the Bogra shelf) and the eastern Bengal foredeep constitute the two major tectonic and sedimentological regimes of the Bengal basin. The Bengal basin can be divided into three main petroleum systems. Among which the Bogra system, considered to be Bangladesh's highest potential petroleum system in western part of the country, has not been explored effectively. The other two are the Surma and Hatia systems that contain all discovered and producing hydrocarbon deposits in Bangladesh and the Bogra system can be further subdivided into three systems, bringing the countrywide total to five.

Resource base
Bangladesh resource base is divided into three main categories: Existing field discoveries, field growth, and new field discoveries. Field discoveries consist of prior production and estimates of reserves in existing fields. According to the Hydrocarbon Unit of Bangladesh's Energy and Mineral Resource Division (HCU), the proved plus probable ultimate recoverable gas (URG) reserves estimate for Bangladesh's 22 existing gas fields is 20.44TCF. Until June 2001, cumulative production totaled 4.3TCF from 13 fields, leaving 16.14TCF in proved plus probable reserves remaining countrywide. HCU also estimated an additional 8.03TCF of possible reserves from existing fields. Titas, Habiganj, Kailashtila, and Rashidpur fields, Bangladesh's four largest fields, together contain more than 55 percent of the country's total reserves and the majority of its development wells.

Field growth: Majority of the Petrobangla's gas fields has not been fully appraised leaving scope for field growth. This is further supported by the fact that Titas and Habiganj which have been producing for many years, have shown little pressure drop or any significant water production. For example, the initial estimate of URG at Titas field was 2.1TCF in 1992, but it has produced 1.9TCF (about 90% of its initial URG estimate) during the past 32 years without any pressure drop or water production. The use of new technologies and enhanced recovery techniques within existing fields can further increase reserves significantly. These include 3D seismic surveys -- Petrophysical thin bed analysis, Compression, and Reservoir management.

New field discoveries: Different organisations have carried out a number of assessment studies on Bangladesh's hydrocarbon resource potential over the past several years. The 'Hydrocarbon Habitat Study' was the first comprehensive study that reviewed all geological provinces both onshore and offshore Bangladesh, conducted by Petrobangla with technical support from Well Drill in 1986. An intensive joint technical study on the hydrocarbon potential of Bangladesh was carried out by the Bangladesh Study Group (BSG), which represented four oil companies (Trend International Ltd., Idemitsu Oil Development Co. Ltd., Repsol Exploration Indonesia, and Eurafrep). There have been number of other studies conducted including ODA study, Shell and Unocal assessment, USGC studies and Hydrocarbon Unit Study. According to the HCU study, Bangladesh's total undiscovered resource potential is estimated to range from a minimum of 18.5TCF to a maximum of 63.7TCF, an average of 41.6TCF.

Resource base lifecycle
There are stage development in a resource base lifecycle: Market growth, expansion of the resource base and promotion of reserves.

Market growth: Initially only a fraction of the ultimate resource base may be recognised due to market immaturity with limited economic incentives. After the initial exploration and appraisal successes, the general economy and gas markets in particular will respond and grow, stimulating further exploration and market growth.

Expansion: Expansion of the resource base takes place in most prospective areas, although this may change as data are acquired. Henceforth, the technical database and knowledge tend to be localised in the discovered field areas. For example, 2D seismic data cover 50 percent of the proven petroleum system fairways of eastern Bangladesh but less than 30 percent of the western portion. The early stage of a resource base lifecycle is dominated by unproved reserves.

Promotion of reserves: Continual appraisal and development programmes and ongoing exploration in response to market incentives significantly enhance the technical database and knowledge of the petroleum systems. This allows more reserves to be classified or promoted to the proved category with increasing production dominating the later stage of the lifecycle. Assessment in Bangladesh, in comparison, demonstrates that resource base lifecycle is in the early stage with at least 70 percent in the unproved reserves.

Bangladesh is at a crucial stage of development of its energy sector with its substantial, naturally endowed gas resource base. This requires research and critical analysis for making important choices and timely decisions. This is necessary to successfully meet the country's domestic energy needs and at the same time generate new scope for additional commerce and economic growth for the country and its people.

Nusrat Sharmin Huq is Deputy Manager, Development of Summit Group, Dhaka.