Drilling Push Despite Slim Gas Prospects
Graphics: Agamir Somoy
An initiative has been taken to drill three gas wells to address the gas crisis. The project cost has been estimated at Tk 406 crore. Of the total, Tk 324.80 crore will come from foreign loans, while Tk 81.20 crore will be financed from the own funds of the Bangladesh Petroleum Exploration and Production Company Limited (BAPEX).
If approved after processing, the project is scheduled to begin this year and be implemented by December 2027. However, several questions have already been raised at the proposal stage of the project. Two wells with very low prospects have also been included in the drilling list.
A meeting of the Project Evaluation Committee (PEC) on the proposal is scheduled for July 14. Officials concerned are expected to face questions at the meeting to be held at the Planning Commission.
A responsible official of the Industries and Energy Division of the Planning Commission told Agamir Somoy that Sadullapur-5 in Gaibandha, Subarnachar-1 in Noakhali and Noakhali-1 wells will be drilled under the project titled “One Appraisal cum Two Exploration Wells Drilling.” The proposal has raised various questions, which will be placed before the PEC meeting.
According to sources, at a meeting held on Oct. 3, 2024, chaired by the then adviser at the Energy and Mineral Resources Division, it was decided that a feasibility study would be conducted through the University of Dhaka. However, the feasibility study for the project was carried out through the International Finance Corporation (IFC), a member of the World Bank Group. Questions will be raised over why the feasibility study was conducted by IFC. Questions will also be asked about the process through which IFC used survey results obtained from BAPEX to produce new outputs.
An explanation is also needed on whether IFC has its own capacity to conduct well exploration work. Although the feasibility study was carried out by IFC, the reality is that the prospects of discovering gas in the exploration wells are comparatively low. In this regard, Subarnachar-1 has a 16 percent probability and Noakhali-1 has a 12 percent probability of finding gas. Questions will also be asked about whether previous failed exploration projects and updated geological data were properly reviewed through Chevron Bangladesh. The PEC meeting will seek explanations as to why the two exploration wells were included despite their low prospects.
In addition, compensation of Tk 2.60 crore has been estimated for land acquisition involving 16 acres for the three wells — five acres for Subarnachar-1 and Noakhali-1 and six acres for Sundalpur-5. Questions will be raised as to whether the expenditure estimate was collected from the offices of the respective deputy commissioners.
The meeting will also seek to know whether the project cost estimates were prepared in accordance with the guidelines for the formulation, processing, approval and revision of development projects in the public sector.
The Planning Commission said no external member was included in the committee that prepared the detailed item-wise cost estimate of the project. It appears to be a one-sided and internal cost estimate. A review of component-wise costs found that many items were estimated on a lump-sum basis. Specific units were not mentioned for those items. A lump-sum allocation of Tk 64 lakh has been proposed for hospitality expenses, which the commission considers excessive.
Meanwhile, the commission believes that estimated expenditures under various revenue items, including vehicle rentals, transportation costs for rigs and rig equipment, temporary labor wages, and publicity and advertising, need to be rationally reduced. The project's procurement plan proposes the purchase of goods worth Tk 210.68 crore under a total of 68 packages. Questions will also be raised at the PEC meeting as to why such a large number of packages are approvable at the project director (PD) level.
In addition, goods of the same nature have been divided into separate packages for each well.
In this case, the Planning Commission believes that higher authorities, Petrobangla or the ministry, have been bypassed in procurement approvals. It also said this constitutes a violation of Rule 25(6) of the Public Procurement Rules-2025.
