US multinational company Chevron has been operating in Bangladesh for three decades. Although Chevron extended its contract during the previous government’s tenure, the company halted new investments due to unpaid bills.
Later, the interim government cleared all outstanding dues, but Chevron has not yet submitted its plan to resume operations.
According to Bangladesh Oil, Gas and Mineral Corporation (Petrobangla), the government has emphasised increasing gas production to meet the existing energy crisis, but Chevron is not cooperating.
The US firm was supposed to install a compressor at the Jalalabad gas field to increase gas production, and the project was set to complete by December this year. Now Chevron is delaying starting the work.
On 4 April last year, Chevron sent a letter to Petrobangla informing the latter that they would defer investment in the Jalalabad compressor project until its outstanding dues are paid in full.
As of 5 August until the fall of the Awami League government, Chevron’s outstanding dues were $237.5 million. After the interim government took the office, they cleared the monthly payments, as well as paid the full amount of the arrears on 17 April.
After that, Petrobangla sent a letter to Chevron on 20 April, hoping the US company would start work at Jalalabad since all dues were cleared.
Prothom Alo asked Chevron, despite the company’s 30 years of business in Bangladesh, why was investment in Jalalabad halted over just a few months of due bills? When will Chevron begin work, and when will they complete it?
In reply, Chevron media and communication manager Sheikh Zahidur Rahman told Prothom Alo that Chevron does not publicly disclose specific future plans. The company regularly evaluates mutually beneficial opportunities in Bangladesh’s energy sector. However, Chevron does not disclose detailed information about its commercial activities in Bangladesh in line with its long-term policy.
Two responsible officials at Petrobangla told Prothom Alo that Chevron did not respond officially to the letter as of 19 April. But a joint management committee meeting between Chevron and Petrobangla was held on 15 May where Petrobangla raised the issue. In response, Chevron officials said the investment proposal has been sent to their headquarters and that plans would be shared once approval was granted.
Petrobangla officials said Chevron has approved the budget for April–June, but it does not include the Jalalabad investment. This means the work is unlikely to start soon. Once it begins, it could take up to two years to complete.
Petrobangla chairman Rezanur Rahman told Prothom Alo Chevron showed a positive attitude on starting the work and they maintained regular communication with the US firm. They would soon hold discussions so that they could start working as quickly as possible.
People concerned said Chevron first signed a production sharing contract (PSC) in 1995, and started gas production from Sylhet’s Jalalabad field in 1998, followed by Bibiyana in 2007. The company also produces gas from the Moulvibazar field.
In 2015, however, Chevron considered withdrawing investments from this region and has already exited Myanmar. In 2017, Chevron even negotiated with a Chinese company to sell its Bangladeshi assets, but the deal did not proceed.
Currently, Chevron operates three onshore gas fields (blocks 12, 13, and 14): Jalalabad in Sylhet, Bibiyana in Habiganj, and Moulvibazar. Daily production figures are 138 million cubic feet from Jalalabad, 936 million from Bibiyana, and 15 million from Moulvibazar. Output is declining at all three fields.
Chevron, however, extended the Bibiyana contract until 2034 and wanted to extend it further to 2039, which the government does not agree with. The Moulvibazar contract runs until 2038 and Jalalabad’s until 2034. Chevron secured a five-year extension in 2022 by promising to drill new wells and increase production.
During the previous government, Chevron sought gas exploration in Rashidpur, Chhatak, and Block 11 (covering Sunamganj–Sherpur–Mymensingh), as well as offshore exploration in five blocks in the Bay of Bengal without competitive bidding. Later, tenders were floated but Chevron did not participate.
After the interim government took office, a Chevron delegation visited Bangladesh and expressed interest in new investments, including Rashidpur, Chhatak, and Block 11.
As the government repealed the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act in November, thus, eliminating the option for awarding contracts without competitive bidding.
Gas reserves at all three fields operated by Chevron are nearing depletion. Bibiyana, which is the country’s largest-producing field, can sustain current production for two more years and production may decline sharply.
The other two fields already saw a production decline. Chevron’s gas production may no longer be commercially viable after two years without new gas discoveries. So, the US firm is reassessing its strategy on new investment.
Geologist Badrul Imam told Prothom Alo that foreign companies come here to make profit. Since they collected their dues through pressure, it would not be appropriate for Petrobangla to stay silent now, and Chevron should work as per the commitments.
He maintained that Petrobangla must maintain a firm stance and pressure them to start work. If Chevron breaks promises, Petrobangla must take necessary actions.