On expiry of about seven weeks, citizens of Bangladesh now allege that the new government has raised as much dust as it liked to cloud the issue of gas export to India. Indeed, because of an unrestrained exuberance and pursuit of many goals in the first one hundred days, suddenly 'gas-confusion' has been created by the authorities, which has sparked countrywide protests, rallies and seminars against the move for gas export. On the other hand the vested interests are endeavouring to influence the authorities to convince: (a) what a Master's thesis of a BUET student has revealed about the critical issues in the gas reserves in Bangladesh, (b) what Unocal, a contractor, operating under the PSC has said about the gas resources and reserves position and the likely benefit may be drawn from the proposed 1,363 km pipeline from Bibiana gas field to India. As members of the geological profession for decades and also as part of the civil society, we owe some responsibility to our society. Pursuant to our article published in The Daily Star on 5th and 6th November, 2001 entitled, "Natural gas export: Cautious steps necessary", we would propose to the government to take into consideration the following.
To begin with, the authorities may:
first try to search through its own information bank (Petrobangla) along with detailed breakdown of gas reserves form all the 21 gas fields ( except Bibiana) discovered in the past 46 years since 1955;
then take a deep look into the relevant provision of the Constitution of Bangladesh, particularly Article 7, 143, 145, insofar as it refers to supremacy of the people, property of the Republic, international treaties and suits in name of Bangladesh;
walk through the Production-Sharing-Contracts (particularly the one now concerns Unocal) signed in 1994-95 to find out the provisions related to Export of Gas ( Article 14.4, 14.5.1, 14.5.4, 14. 5. 5 and 14.6(b);
read between the lines the contents of Unocal's proposal and their anomalous and fictitious presentation on Natural Gas Pipeline Project which contains at least 14 nos. of lies and or misrepresentation of facts.
The Ministry of Energy appears to have identified Hydrocarbon Cell (which is a spoon fed technical arm of the Ministry), and a hand picked Norwegian expert, who has never worked in the field of petroleum reserve estimate etc. in Bangladesh. Perhaps it would have been more appropriate to consider engaging the professional services of either the German Geological Advisory Group (GGAG working in Bangladesh since 1978) or a reputed consultant from Japan or Well-drill of U.K, or IKM of Canada.
But before we make an effort to elaborate the issues, we would like to point out that the most recent troubles erupted overnight during 10-15th October, 2001, when the Planning and Finance Minister, Mr. Saifur Rahman spoke out his mind about gas export to India. The latest statement of the FM is that after keeping gas reserves for 35-40 years of home consumption, export might be considered ( Prothom Alo, 27 November, 2001). The happier news for the citizens however came from Hon'ble Prime Minister Khaleda Zia, when she said, "Gas export only after meeting the country's demand." She also nullified all misinformation given out so far regarding gas export and said that her government has not decided about gas export to India (Ittefaq, 25 November, 2001). We may recall that she had given a similar signal earlier (Dainik Dinkal, 8 May, 2000). Even the BNP general secretary Mr. Mannan Bhuyan categorically expressed that secret plans to export gas to India will be thwarted (Dainik Dinkal, 19 May 2001). However, it is alleged that the phony utterances and prescription's loudly spelled out by the State Minister for Energy Mr. AKM Musharraf Hossain on 14 November, 2001 at BUET, Dhaka and his subsequent statements aggravated the entire situation. We know, that everybody needs a burr under his tail to keep him moving. But whose burr the State Minister for energy is wearing anyway and for what purpose?
We would not even pretend to say that, they are not telling the truth. But why should they be restating the blatant lies of Unocal? The FM said, "Did Awami League sign nine PSCs- to eat gas?" (Prothom Alo, 27 November,2001). Facts will reveal that only four (4) PSCs were signed (block nos. 5,7,9 and 10) at the fag end of the AL period, and for what god-damned reason they know best. But in none of these blocks investments would be made for the next five-year, if no market can be found. The four IOCs have only blocked the blocks and neither these blocks will conceive nor will it produce anything for the next five years. Nevertheless, AL must answer to the people of the country why did they do what they did? On the other hand during 1994-95 as many as six contracts were signed on eight blocks (block nos. 12, 13, 14, 15, 16, 17, 18 and 22) with the IOCs. Now, block 13 and 14 have already been surrendered in January 2000 and most likely, in the first phase of operation block 22 and shortly afterwards block 17 and 18 would be relinquished as per provisions of PSCs. Thus only blocks 12, 15 and 16 would remain alive at the end of the day to bother Petrobangla /Government. The itchy issue now is block 12 and Bibiana discovery. Let's now make a quick analysis of Unocal and Shell's failures in the past five years. Unocal's "Ratna" and "Capna" drilling has failed to produce anything. So did Shell's "South Sangu" (off-shore), "Halda" and "Swandip" drilling programme, i.e. in the past four years, out of eight exploratory drilling programmes, five turned out as dry holes.
Nevertheless, industry and the public were caught by surprise by the actions of the authorities in the past six weeks or so. Although there had been warnings that we were going through an energy supply-demand problem, few had paid any attention. Rather, the bureaucracy and the political government ignored the declining situation over the years and sought adhoc solutions to cool down the crisis and survive. Thanks to Almighty Allah Dr. S.A. Samad, former principle secretary and Dr. Taufic-e-Elahi, former secretary, energy are not in the gobble-dy-gook game.
But it seems the government is rather keen to fish in the dirty water. Mr. State Minister is taking it easy as easy as he did in KAFCO project. This however reminds us the story of a falling man from a 20th floor. When he reached the 9th floor, a window suddenly opened up and a lady behind the window was horrified to see the scene but bravely asked, "What is the situation?" Quick came the reply, "so far so good." Like all sensible citizens of this country we also can appreciate what would happen to the unlucky man.
But, even with the kindest-heart we would not like to place a very soft padding on the landing ground for this desperate soul because his thoughtless action is nothing but a bid to sell out the most valuable asset (gas) of this poor country to India depriving our own people!
Now let's give a quick look at some salient features of the PSCs signed during 1994-95, in particular the contract signed by Occidental of USA ( now in operation by Unocal). Unocal has submitted the Natural Gas Pipeline Project on the basis of discovered gas at Bibiana (greater Sylhet). Through an internationally reputed independent consultant/ certifying agency the reserve of gas has finally been assessed at 2.4 Tcf (earlier Unocal propagated very loudly for two years the reserve at 6 Tcf, which has now been accepted at 40 per cent of their original publicity). As per PSC the Unocal is entitled to produce annually up to 7.5 per cent of the proven plus probable reserve. However, Article 14.5.1 states that the contractor shall have the right to export marketable gas as Liquefied Natural Gas(LNG) and not piped gas (which they have now proposed violating the provisions of PSC). It is also important to note that as per Article 14.6(b) contractor will be free to find a market outlet in the domestic market (not outside). Moreover, Article 14.6 of the PSC has not been operationalized i.e., Gas Purchase and Sales Agreement (GPSA) has not been signed. How did the contractor (Unocal) dare to violate the provision of PSC, which is destined to market gas in India? And who has given Unocal the right and authority to state (without prior consultation with Petrobangla), "Unocal and Petrobangla dedicate reserves?" Unocal (closed its eyes like a cunning fox) very cleverly indicated (as a comparisn) that Bibiana's proven and probable reserves account for less than 5 per cent of Bangladesh's currently estimated resource base (assuming 61 Tcf as resource, a concocted figure). This is a blatant misrepresentation of fact for a company of Unocal's standing. The fact of the matter is that, not even a stupid would try to compare "Reserve" with "Resource" because they are two different animals of the same phylum. If however, one compares with the actual reserve figure, the comparison would be around 22 per cent of the total reserve. In fact, there is still another catch-- it will now be even 33 per cent of the total reserve! Here is the fallacy: proposed throughput in the pipeline is 500 million cubic feet per day ( MMCFD) for 20 years i.e., 500x 365x20=3.65Tcf? Where from Unocal would commit an additional 1.25 Tcf? Referring to an independent study (?) Unocal stated that Bangladesh gas market is "oversupplied" for eight years before the country can absorb any volumes from Bibiana and more than 15 years before Bangladesh can utilize Bibiana's maximum production. This is not a fallacy, it is a lie, an understatement about Bangladesh's gas demand in the near future because gas has already been taken to the western zone(across Jamuna river) and the entire zone is energy hungry. The 30" dia pipeline is meant for supplying gas for generation of electricity (the demand of which is expected to quadruple by 2020 as stated recently by the State Minister for power), which will also provide an expanded market for fertilizer, industry and other commercial activities as it did in the eastern zone in the 1980s and the 1990s. Currently, only the eastern zone is consuming about 1100 MMCFD, which would increase to 1750 MMCFD by 2005 as per demand forecast (i.e.500 MMCFD increase or about the same Unocal proposes to export to India).
The most important issue not being discussed at all is how the Unocal pipeline will cross the Jamuna river. There is only one pipeline of 30" diameter and with compressor facilities it can carry a maximum of 850 million cft of gas per day to the west side. If this pipeline is used for carrying 500 million cft to India then only 350 million cft can be supplied to northern and Southern Bangladesh. This amount will be far less compared to the requirement of the western zone. It is rumoured that the Unocal pipeline will cross the Jamuna in the traditional 'river bed crossing method'. But the latest feasibility for crossing the Jamuna by this method by a famous consultant appointed by the World Bank, "Rendall, Palmer and Triton" as late as 1982 found that this is not possible. Did Unocal have a recent study on the issue, if so then why are they silent on this point? The nation, particularly the people of the west zone of the country have a right to know about the studies made by Unocal regarding the crossing of the Jamuna. The economic development of the west zone depends on this.
We would also like to make a comment (on a statement by an eminent economist of the country) that the present debate on gas export is not between "two or three engineers" and the geologists' community rather it is a debate between a small group ( may be around ten at the most) of vested interests and the people of Bangladesh. This is not an emotional statement. Secondly, Bangladesh's gas reserves position cannot be compared with Canada (which had 50 years reserve policy earlier), U.S.A, Indonesia, Malaysia or even India simply because Bangladesh is a "mono-energy" (gas only) country while all other countries mentioned above are multi-energy (that too with huge reserves of oil, gas, coal and nuclear). Another confusion arose because of Unocal's mix-up of data between resource and reserves, which has been beefed up without any field study (except Bibiana, Jalalabad and Moulvibazar) by a phenomenon called field growth as a result of applying new technologies to the existing gas fields in Bangladesh.
We suggest that instead of trying to discover "new gas" hypothetically IOCs and Petrobangla should go to the gas fields and conduct 3-D surveys appraisal drilling and obtain reliable data on gas reserves in Bangladesh. However the results so obtained must be certified by internationally reputed independent specialized consultants / appraisers as Unocal did for Bibiana gas field.
To conclude, let us remind ourselves the often quoted joke: if gas is exported against the wish of the people of Bangladesh to India as proposed by Unocal -- "Bibiana gas will be used by the Bibis" of India for baking 'nun' while the Bangladeshi women-folk will fly to Delhi by DC-10 to cook rice everyday".
Nuruddin Mahmud Kamal is former Chairman, Power Development Board and S.K.M Abdullah is former Chairman, Petrobangla.
Source: The Daily Star, Dhaka 4 December 2001