Energy Ministry reneges on promise to make BAPEX self-reliant

The Energy Ministry has apparently reneged on its promise to make BAPEX, the national oil and gas exploration company, into a 'self-reliant' entity, as it is repeatedly pursuing the BAPEX authority to engage foreign companies in gas exploration activities.
In a hasty move, the Energy Ministry has taken up a plan to allow Russian state-run oil exploration company, Gazprom, to drill new production wells at Shahbazpur Gas Field in Bhola bypassing tender process, sources in the Energy Division told the Daily Observer.
In July, BAPEX rejected the unsolicited proposal from Gazprom, at a board meeting, on the ground that Gazprom charges more than double of BAPEX charges for the same task, the meeting minutes read. It also said that Gazprom charges 25 per cent higher than other foreign companies for drilling each gas well.
More than that the output from the wells Gazprom drilled last time was unsatisfactory. Gas production from five wells stopped in a few months after completion of drilling due to different technical glitches. Gazprom drilled 10 wells at that time.
Despite all these realities the Energy Division is once again planning to award Gazprom drilling rights to two more wells at Shahbazpur, at a higher charge, using the much-talked about Speedy Supply of Power and Energy (Special Provision) in the name of producing gas within the shortest possible time.
"Our boys are doing well in onshore drilling, if the authority allows the foreign company it will demoralize our young-smart new generation here, not only that this money starved organization has to pay huge amount in foreign currency to the contractor for this job," a senior official of Petrobangla, the state-owned oil and gas corporation, said.
On April 26 in 2012, the government awarded two contracts to Gazprom bypassing tenders for drilling 10 wells at different onshore fields to increase gas supply by 22.5 crore cubic feet a day.
But the expensive venture yielded only 8.7 crore cubic feet of natural gas a day, leaving five wells out of production. Gazprom charged approximately Tk 154.5 crore on an average to drill each of the 10 gas wells.
"It is a fact that the energy sector is doing well in the last 6 to 7 years compared to other ministries, but people's perception is that a nexus is misusing the Act for their own purposes. Using this law they are getting their 'commission.' Unfortunately, this myth is tarnishing government's image. "Is it only a myth?" Energy expert Prof Dr Shamsul Alam questioned.
Gazprom entered Bangladesh's energy sector under the Speedy Supply of Power and Energy (Special Provision) Act to produce gas within the shortest possible time but it failed to fulfill its commitments.
"BAPEX recommended that Gazprom should participate in the bidding process for 13 exploratory wells to be drilled over the next two years but it disagreed," a senior official of Bapex said.
Gazprom wants to sign direct contracts, it always tries to bypass the tender process, he added.
Pointing finger at the much-talked about Act, Prof Shamsul Alam said, "When the government is repeatedly saying about competitive price why it is allowing unsolicited deals in all projects in the energy sector? It is a gross contradiction."
 "I'm anxious and concerned about the issue, to remove public perception in this regard the government should go for open public hearing when it (government) procures any item from others or before fixing any price of any commodity brought from others, moreover, it can use Parliament floor just to be transparent in public procurements," the professor said.
Compiling all these observations and recommendations, BAPEX sent the opinion to the Energy Division saying that awarding the job to Gazprom would demoralise Bapex officials.
A BAPEX official on condition of anonymity said that there was also pressure from the government high-ups to engage Gazprom for the development of Shahbazpur Gas Field and other potential structures in Bhola.
BAPEX and Bangladesh Gas Fields Ltd have already spent over Tk 100 crore to overhaul two of the five wells which went out of production in a few months after Gazprom drilled them, said officials.
A similar budget would have to be allocated to overhaul three other wells drilled by Gazprom, they added.
At the meeting, BAPEX board was also informed that on December 6 in 2014 Chinese company Sinopec was awarded a project to drill five similar wells at a price of Tk 116 crore per well.
Besides, BAPEX can drill a gas well using rigs, manpower and other resources of foreign companies between Tk 100 crore and Tk 110 crore.