A meeting at the energy ministry yesterday finalised the joint venture proposal, which is likely to be placed before the prime minister, who heads the ministry, within the next two weeks for her approval, sources said.

Adviser to the energy ministry Mahmudur Rahman and the managing directors of the Petrobangla subsidiaries--Bangladesh Petroleum Exploration and Production Company (Bapex), Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Ltd (SGFL)--represented their respective organisations at the meeting.

Besides reducing the gas supply shortfall, the first-ever joint venture exclusively of state-owned enterprises (SOEs) will also enhance their production, management and other technical skills and capabilities, a high official of the ministry observed.

He said a large amount of money at the Petrobangla companies is lying idle, which can be profitably invested in developing Begumganj Gas Field.

According to the preliminary estimates, the project will be able to supply gas to the national grid at a price as low as Tk 50 per thousand cubic feet (mcf), while the lowest price rate of any international oil company (IOC) is Tk 122, he added.

Of the project partners, BGFCL and SGFL will invest Tk 150 crore each. Bapex, which owns the field, will not invest any money but will be the working partner in charge of operations.

The project will seek VAT (value-added tax) and duty exemption from the finance ministry, like the IOCs enjoy, sources said.

A 5-member joint management committee comprising two BGFCL, two SGCL and one Bapex representatives will run the project.

An energy ministry official said earlier three IOCs had expressed interest to develop and operate Begumganj Gas Field under joint venture, but the ministry decided to award the gas field almost ready for production to the joint venture of SOEs.

Bapex explored the gas field in 1976-78 and put the amount of proven gas reserve in its first and second wells at 32.7bcf.

Currently five companies--BGFCL, SGFL, Bapex, Shell Bangladesh Exploration and Development BV and Unocal Bangladesh Ltd--are producing gas in the country. Of them, BGFCL, SGFL and Bapex are subsidiaries of the state oil and gas agency Petrobangla, and Shell and Unocal are IOCs operating under production sharing contracts (PSCs).

BGFCL operates eight gas fields--Titas, Habiganj, Bakhrabad, Narsingdi, Meghna, Begumganj, Feni and Kamta.

SGFL runs five gas fields--Sylhet, Kailashtila, Rashidpur, Beanibazar and Chhatak, and also Haripur Oil Field. Of them, Chhatak Gas Field and Haripur Oil Field are now out of production.

The third SOE, Bapex, operates Saldanadi, Fenchuganj and Shahbazpur gas fields.

Shell is producing gas in the offshore Sangu Gas Field. It also operates two other gas fields--Semutang and Kutubdia. Kutubdia is also an offshore field discovered in the 1970s.

The other IOC, Unocal operates Jalalabad, Maulavibazar and Bibiyana gas fields. Of them, only Jalalabad Gas Field is in production.