The obligation of feasibility study through a third party in oil and gas exploration remained. Feasibility study through a third party is considered one of the obstacles to the backwardness of the energy sector. In whose interest is it maintained, who will benefit from it is the big question now!
On the one hand, feasibility study is a waste of time, and on the other hand, it is a waste of money. After much deliberation during the previous government, the process of exempting from feasibility study in oil and gas exploration was started. The approval process was almost in the final stage. Janendra Nath Sarkar, former chairman of Petrobangla, played a leading role in the work.
His argument was, if we dig a well, we may get gas, or we may not. If we get gas, there will be a lot of profit, and if we don't get it, the entire investment is zero, what is the point of feasibility study here again? This is not a bridge-culvert that we will verify the feasibility. The return may come from here, it may not come again. Before we finalize the well drilling site, a lot of work including seismic survey has to be done, which is also a kind of feasibility study. So why should we verify the feasibility through a third party.
The consultant recruitment process is a very long process, and also very expensive. The work that will cost Tk. 50 to 60 lakh through a consultant. Petrobangla can complete the same work for a nominal price of Tk. 50 thousand to Tk. 1 lakh. The work that takes a consultant a few months to do, Bapex-Petrobangla can complete the work in 15 days. The work that the consultant does also depends on the information of Petrobangla and with the help of their people. A group from the middle takes some money and leaves. Many wells have failed in the past and this may be the fate in the future too. If 10 exploration wells are drilled and gas is found in 1, it is considered commercially successful. In Bangladesh, this rate of achievement is three to one.
A source in Petrobangla said that the Planning Ministry had dropped the feasibility study through a third party in the case of exploration wells, 2D, and 3D. It would have been finalized only after receiving the approval of the Cabinet Division. But it has been canceled without giving approval.
Petrobangla Chairman Rezanur Rahman confirmed the cancellation to Barta24.com. He said that he has rejected the proposal to exempt the feasibility study through a third party. If the DPP is above Tk 50 crore, the feasibility study will have to be done through a third party.
The current Secretary of the Energy and Mineral Resources Division, Mohammad Saiful Islam, also tried hard to get exemption from the feasibility study. He gave a letter to the Secretary of the Planning Division.
In that letter, he requested the Energy and Mineral Resources Department to exempt the feasibility study through a third party for the investment project above Tk. 50 crore issued by the Planning Division in June 2022 for the formulation of the DPP.
In that letter, he wrote that the letter sent earlier to the Planning Commission seeking exemption from the obligation to conduct a feasibility study is being reconsidered by the Planning Commission. He wrote that it is possible to conduct a feasibility study without additional expenditure by forming a committee comprising the relevant experts of Bapex in the fastest time and in a cost-effective manner. In the case of important projects, many steps have to be followed in completing the feasibility study of the project. It takes 6 to 12 months to get the final feasibility study report after following all these activities. In addition, 30 to 40 lakh taka is required for each project for the study. An example of how the DPP complexity affects Mobarakpur, Pabna, can be this example. Work started with a 10,000 PSI (pressure square inch) blowout control preventer (BOP) to dig a well in Mobarakpur. During the digging of the well, it was found that the internal pressure was 12,000 PSI. The pressure was increasing further, forcing the work to be stopped and the DPP to be revised since there was no financial resource of 15,000 BOP in the DPP. It took a long time to approve the RDPP. Bangladesh did not learn from this either.
Many such complications can arise, which are very difficult to predict in advance. How many tools have to be purchased, they are excluded from the list of PPR, and the price is also unknown. In that case, when buying, there is a long process, preparation of requisitions, store clearance, technical specification committee, writing to the manufacturing company asking for possible prices, and then in some cases, approval from the cabinet regarding the purchase. It takes more than 2 years to do all this. The Division of Energy and Mineral Resources has to face all such complications. However, the concerned company has to keep the wells unprotected and look at the file.
Amjad Hossain, former Managing Director of Bapex, told Barta24.com, "Feasibility studies often hinder work in oil and gas exploration. I used to work in many ways. In the case of exploration wells, it was said without land acquisition. I then added a condition that if gas is found, I will acquire the land immediately. During the excavation of Shahbazpur No. 2, I temporarily acquired 7.5 acres of land for the road and well. If gas is found, it is acquired permanently immediately. That condition was added to the DPP.
He said, there was a lack of foresight in the case of Pabna, decisions should have been taken based on geophysical history. Many of us do not have transparency, many do not have the idea, the issue of risk should be kept in the DPP. In this case, the PDK should be smart and diplomatic. In my time, I would have kept some extra money, If not needed, the money would have been returned.
Energy experts believe that no one considered it necessary to take into account that the energy sector is a specialized sector. Some people act with foresight. If there is a crisis in the country, they can import LNG from abroad, hire foreign contractors. This allows them to make commission trade, which is not the case when a domestic company digs wells and extracts gas.
An official of Bapex told Barta24.com on condition of anonymity that an organization of former bureaucrats (IIFC) works in the field of feasibility studies. Those who are now unable to complete the work. That company has close contacts with top bureaucrats. They may be working as catalysts here because if the feasibility study is closed, their income will decrease. Now they are charging Tk. 40 lakh for each project. Our people may be working with our data, they are just giving a seal. And Petrobangla wanted us to finalize it by holding a meeting with our own people, our own information, and BUET teachers.
Energy experts believe that the current gas crisis is due to the lack of special attention to this sector. Exploration and development cannot be considered as building bridges and roads. And if exploration is not accelerated, the gas crisis cannot be eliminated.