Three Petrobangla subsidiaries on Thursday inked agreements involving $193.55 million with the Russian state-run gas corporation Gazprom International for drilling 10 wells in five gas fields.
Secretaries of the Bangladeshi gas companies and Gazprom’s acting chief executive Yuri Skok signed the deals. Petrobangla on January 20 initialled the agreement with Gazprom.
Finance minister AMA Muhith, prime minister’s adviser for economic affairs Mashiur Rahman and energy adviser Towfiq-E-Elahi Chowdhury, state minister for power, energy and mineral resources Mohammad Enamul Huq, chairman of the Board of Investment SA Samad, energy secretary Mohammad Mesbahuddin, Petrobangla chairman Hossain Monsur and other officials of the ministry and Petrobangla attended the signing ceremony.
Officials said that Bangladesh Gas Fields Company Limited, Sylhet Gas Fields Limited and Bangladesh Petroleum Exploration and Production Company employed Gazprom for the job without keeping any provision for realising compensation for losses of natural gas or damage to gas reserves.
Gazprom will pay the premiums of insurances of $60m for each of the gas wells and $2.50m for each third-party service in drilling the wells. It will also deposit 5 per cent of the total expenditure in performance guarantee, they said.
According to the agreement, Gazprom will complete drilling the wells in 20 months after opening the letter of credit. The contractor will, otherwise, pay liquidated damages.
Petrobangla, the state-owned Oil, Gas and Mineral Resources Corporation, expects to supply around 250–300 million cubic feet of natural gas a day to the national grid by drilling the 10 gas wells.
Under the scheme, Gazprom will drill five wells in the gas fields of Bangladesh Petroleum Exploration and Production Company, or Bapex — two wells each in the Shahabajpur and Semutang gas fields and one in the Begumganj gas field.
Gazprom will also drill four wells in the Titas gas field under Bangladesh Gas Field Company Limited and five wells in BGFCL and SGFL gas fields — four wells in Titas gas field of the BGFCL and one in Rashidpur gas field of SGFL.
According to the agreement, Bapex will pay $18.64m each for drilling each of the five gas wells in its gas fields while the BGFCL and the SGFL will pay $20.06m for drilling each of the other five gas wells.
The drilling of five wells in the Titas and Rashidpur gas fields was taken up on a fast-track programme adopted by the government in 2009 but the contractor informed Petrobangla in February 2011 that it would not drill the wells claiming that the Titas field was leaking gas.
Poszukiwania Naftyi i Gazu Krakow (Oil and Gas Exploration Company of Cracow), a Polish oil company, in early 2010 was awarded for the job from 24 other bidders through a tender process in early 2010.
Immediately after refusal of Krakow, Petrobangla initiated the process and took more than a year to employ Gazprom under the Power and Energy Fast Supply Enhancement (Special Provision) Act 2010 without any tender.
The other five gas wells in three gas fields under Bapex were under the gas extraction enhancement programme initiated in 2010.