Ignoring state-owned gas and oil exploration company Bapex to drill five gas wells at several gas fields, the government proposes to use Russian energy giant Gazprom – at double the cost.
The job will be awarded under the Speedy Supply of Power and Energy (Special Provision) Act, 2010, without going through a tender procedure.
“We recently forwarded a proposal for approval by the Cabinet Committee on Purchase. The proposal will be placed at the next committee meeting,” Energy and Mineral Resources Division Secretary Abu Bakar Siddique told the Dhaka Tribune yesterday.
Bapex, a Petrobangla subsidiary, has had a record of success in exploration but Gazprom, in a previous drilling job in 2012-14, failed to draw out the amount of gas it had expected to extract.
A Petrobangla official, seeking anonymity, said: “Bapex’s cost of discovery is also lower than most international oil companies.”
Gazprom’s drilling of the five wells will cost around Tk150 crore per well, whereas Bapex could do the same job for Tk70-80 crore per well, the Petrobangla official said.
Moreover, the procurement of three new drilling rigs recently had made Bapex fully equipped to do the job, but now the rigs will remain unutilised.
The five gas wells to be drilled under the contract – Bakhrabad 10, Rashidpur 9, 10 and 12, Srikail 4 – are owned by three different state-owned companies.
According to the proposal, Gazprom’s average drilling cost per well will increase to $19.64m (around Tk150 crore) from $19.35m in 2012 – a 1.47% rise, officials said.
Gazprom International Investment BV will spend Tk22.05 crore to construct a new road and for the development of Rashidpur wells 9, 10 and 12.
The civil work will be carried out by Gazprom instead of Sylhet Gas Fields Ltd, the state-owned company that owns the wells.
Previously in 2012-14, Russian state-owned gas exploration company Gazprom failed to extract the amount of gas that it had expected to add to the national grid.
The company was signed by the Bangladesh government to drill 10 wells and extract around 300 million cubic feet per day (mmcfd) of natural gas, but managed to extract only around 146mmcfd, said sources at Bangladesh Oil, Gas and Mineral Corporation, commonly known as Petrobangla.
Gazprom signed two drilling contracts under the Special Act, worth an estimated $193.55m, with the government in April 2012, without tendering for them.
Gazprom was supposed to finish drilling all 10 wells by the end of last year but took an additional 11 months to complete the job. After the deals were signed, work started much later than scheduled due to delays in rig mobilisation.
Gazprom sub-contracted a third party, a Russian company named Ariel Corporation – which was permitted by the agreement – but did not monitor Ariel’s work.
Several problems occurred during the drilling phase of the gas wells.
The country incurred a loss of around Tk200 crore in 2012-14 due to faulty extraction procedures by Gazprom in two wells of Titas gas field, said an official at Petrobangla subsidiary Bangladesh Gas Fields Company Limited.
Badrul Imam, a teacher at Dhaka University’s geology department, told the Dhaka Tribune that using Gazprom for the drilling job was unnecessary.
He said Bapex was capable of carrying out the job, adding: “I think the government should not to give the job to Gazprom.”
