Slow progress in gas well drilling

Bangladesh has been facing a gas shortage for several years. Even with the import of expensive LNG (liquefied natural gas), demand remains unmet. Domestic gas production continues to decline.

To increase exploration and production, the government aimed to complete work on 50 wells—covering development, refurbishment, and exploration—by December this year. So far, work on only 20 wells has been completed.

According to the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla), the plan to drill 50 wells over four years was adopted in 2022. The project advanced slowly under the previous government.

Although the interim government accelerated efforts, progress lagged in project approval and tender processes. Preparations have already begun for a new project involving another 100 wells, even before the current one is finished.

Petrobangla says that once all 50 wells are completed, an additional 620 million cubic feet of gas per day (mmcfd) is expected to be added to the national grid. The 20 wells completed so far could potentially produce 210 mmcfd, but only 90 mmcfd has been added so far.

Work is underway on six more wells. Currently, seven drilling rigs are in operation—five owned by Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) and two run by contracted companies. By December, three more contracted rigs are expected to be operational, bringing the total to ten rigs working simultaneously.

Petrobangla is the state agency responsible for extracting the country’s mineral resources. Three of its subsidiaries are involved in gas production—BAPEX, Bangladesh Gas Fields Company Limited (BGFCL), and Sylhet Gas Fields Limited (SGFL). Of these, only BAPEX has its own drilling capability; the other two rely on hired contractors for their operations.

Over the past decade, little emphasis has been placed on gas exploration. To address supply shortages, Bangladesh began importing LNG in 2018. However, when global LNG prices skyrocketed, the government suspended spot-market purchases from July 2022 for seven consecutive months. In response, a project to drill 50 wells was hastily approved to boost domestic production.

At the time, experts warned that completing the work within the stipulated period would be difficult. Senior officials at Petrobangla and its three companies said Bangladesh has experience drilling only two to three wells a year at most. Approving a Development Project Proposal (DPP) alone takes more than a year.

Land acquisition and equipment procurement take several additional months. After drilling begins, it takes at least three and a half months to complete a development or exploratory well, and about two months for a workover well. Officials said that hiring multiple foreign contractors could increase the number of wells drilled within a year.

Petrobangla sources said that without issuing tenders, the previous government had finalised contracts with three foreign companies—from China, Uzbekistan, and Russia—for drilling work.

The interim government, however, repealed the Speedy Supply of Power and Energy (Special Provision) Act. Because contracts now require open tenders, the process is taking longer—but at a significantly lower cost.

Petrobangla Chairman Rezanur Rahman told Prothom Alo, “DPPs for 48 wells have been approved, and only two remain. Work on 20 wells has already been completed. Two more will be finished in November and four in December. The remaining work will be completed by December next year.”

Of SGFL’s 16 planned wells, work has been completed on nine. Of BGFCL’s 14 wells, only three have been finished. BAPEX was tasked with drilling the highest number—20 wells.

Of these, eight are done and one is underway. Contracts for another five wells have been signed with China’s Sinopec. BAPEX officials admit that all wells cannot be completed within the current timeframe.

While onshore drilling remains sluggish, offshore exploration is even further behind. No active exploration work is currently underway at sea.

A draft Production Sharing Contract (PSC) has been prepared and sent to the Energy Division for approval to invite fresh bids. However, the division wants to leave the tendering process to the next political government.

Bangladesh’s daily gas demand stands at 3,800 million cubic feet (mmcf). Currently, 2,700 to 2,800 mmcf is being supplied. Domestic production continues to decline year by year.

Even with imports, it is not possible to bring in more than 1,100 mmcf per day due to limitations in LNG regasification and transmission infrastructure. Experts therefore believe that increasing local gas exploration and production is the only sustainable way to overcome the crisis.

Geologist Badrul Imam told Prothom Alo, “It was possible to complete work on all 50 wells within the scheduled time. After the change of government, procedures changed, slowing things down. Greater emphasis must be placed on drilling—particularly on exploratory wells to boost investment in gas discovery.”