The energy ministry's proposal to float a tender for deep sea survey, stalled by the cabinet last week, is inappropriate as it will not help address the upcoming gas crisis, they said.

Quoting the draft of a gas sector master plan, they stress that in addition to inviting foreign oil and gas companies for a third round bidding, the government should also focus on tapping the potential gas reserves of the existing fields like Titas or Bakhrabad.

Moreover, the national exploration company Bapex should be given adequate allocation to conduct seismic surveys in blocks 8 and 11 with an aim to drill five exploratory wells by 2008-09. If it is not possible for the government to give Bapex funds from the Annual Development Programme (ADP), Bapex should be given financial autonomy to make its own earning and benefit both itself and the nation. Otherwise, the gas supply situation will be grim, they think.

There have been little exploration activities during the BNP-led coalition rule. All major explorations were undertaken by the previous Awami League government.

If the government continues to sit idle, officials and experts say, the country will fail to meet its targets of millennium development goal (MDG) affecting the targeted GDP growth rates.

The MDG wants Bangladesh to attain a GDP growth of over seven percent, which is hard to achieve but not impossible. "If we can just ensure a smooth power supply, we can achieve an additional GDP growth rate of 1 percent, for instance," said one official.

Even with the current gas demand when the GDP growth is 5.5, the country needs 16 trillion cubic feet (tcf) of new gas till 2025. If it wants to meet the MDG, the country needs seven percent GDP growth and 26tcf new gas till 2025. And to achieve GDP growth rate of above seven percent, it needs 35tcf new gas.

The government's draft final Gas Sector Master Plan being prepared by British consultant Wood Mackenzie says that the proven gas reserve of 9.2tcf will be able to meet the country's forecast demand till 2011. Petrobangla provided these figures.

Even if the country can tap a probable gas reserve of 14.4 tcf (inclusive of the proven reserve), the crisis starts from 2015. If a possible reserve of 22tcf can be tapped, the crisis will begin from 2019.

"The earliest period when gas supply may potentially fall short of demand is 2010-2015," the draft master plan says. This situation demands proper appraisal of the discovered fields to prove the potential, probable and possible reserves as well as the urgent need for new exploration drilling to prove the potential yet-to-find (YTF) resource, the plan adds.

Sensing an inevitable crisis, Petrobangla made some homework earlier this year and came up with some realistic suggestions to resolve this. It marked seven off-shore blocks, which are not deep sea ones and which were previously opened for the second round block bidding. It also marked 11 on-shore blocks which were previously opened for the second round bidding with different block identification. Besides, it proposed the second round bid's two blocks open for the bid.

"In total there are 20 blocks which can be open for a third round block bidding. We can open these blocks after just deciding some incentive packages because some of them were previously explored and oil companies may not be interested in those," said one source.

Such incentives can include Petrobangla's advance commitment to purchase gas from an oil company that discovers gas from a least lucrative block. For such blocks, the government may also offer the oil companies a higher gas price.

Petrobangla also thought of another 20 deep sea blocks which need to be identified first to go for future exploration. "Deep sea blocks demand heaviest investment. Even if we find big gas reserve there, it will take quite a long time and substantial amounts of money to bring that gas to some use. We will need them in future but opting for deep sea blocks will not give us any immediate solution," said one expert.

The energy ministry however brushed aside the idea of opening the existing 20 blocks and opted for the deep sea 'spec survey' which would cost about $10 million.

Sources said the ministry was actually promoting someone's business interest over the national interest. The spec survey will take at least a year to complete.

The energy ministry last week sought cabinet approval of the spec survey. The cabinet did not approve it and formed a committee headed by Health Minister Mosharraf Hossain to 'review' it.

Energy ministry Adviser Mahmudur Rahman had objected to the cabinet decision saying that it will jeopardise future gas supplies. But officials and experts say his position is not proper.

"We have some down to earth options deserving government attention. We already have the Bibiyana gas field under development. This is a major field and it will increase our total proven gas reserve within a year," said one expert.

Besides, Petrobangla has initiated a $20 million three dimensional survey financed by the Asian Development Bank in the existing fields of Titas, Bakhrabad, Rashidpur, Kailashtila and Sylhet. Once these surveys are complete and new gas layers are identified, the country can have new gas at minimal cost.

"Bapex was awarded two blocks -- 8 and 11-- last year. It has the capability to conduct seismic survey extending 750 line km to 800 line km. But the Planning Commission would not give it the required fund. So it has limited its tasks to 300 to 400 km. At this rate, it will take ages to finish the survey and start drilling four to five wells," he pointed out.

It will take $9 million to complete the survey and $6 million to drill each exploratory well. "If Bapex is allowed to sell its gas at the rates of the other oil companies, it can give the government more than Tk 100 crore a year and save itself another Tk 100 crore. It is just a matter of decision. But nobody is paying any attention," he noted.