Tullow starts trial gas production in Bangladesh

DHAKA, May 7 (Reuters) Ireland-based Tullow Oil and Gas Exploration Co. on Sunday started trial production at a natural gas field in Bangladesh's southeastern Bangora area, a top energy official said.

''If it's successful, we will be able to add up to 80 million cubic feet of gas per day (mmcfd) to the national grid,'' Musharraf Hossain Bhuiyan, chairman of state-run Bangladesh Oil, Gas&Mineral Corp. (Petrobangla) told Reuters.

At present four international oil companies (IOCs) are engaged in developing and operating 10 of the country's 23 hydrocarbon blocks.

State-owned Bangladesh Petroleum Exploration and Production Co. (BAPEX) is working in some of the remaining blocks.

The IOCs are U.S.-based Unocal Corp., which has been acquired by Chevron Corp., UK-based Cairn Energy Plc. and Canada-based Niko Resources Ltd.

Bangora's estimated reserves are about 457 billion cubic feet, energy officials said.

Tullow discovered gas at Bangora in Comilla district in block 9 and began drilling last November.

According to production sharing contracts signed in 2001, Tullow will drill two other offshore blocks -- block 17 and 18.

Tullow, at a meeting in January with officials of the ministry of energy, power and mineral resources in Dhaka, said there was a high potential of huge oil reserves in and around the island of Saint Martin, off the country's Teknaf beach.

They have conducted seismic surveys around the island and would confirm the existence of oil there by October, officials said.

French oil and gas company Total SA has expressed interest in working with Tullow, they added.

Petrobangla said the supply of gas would match demand, with total production reaching 1,650 mmcfd by next month.

Bangladesh's total gas supply capacity is now 1,570 mmcfd, leaving a daily shortfall of 80 mmcf, energy officials said.

The country has 14 trillion cubic feet of proven and recoverable gas reserves, according to energy ministry estimates.

REUTERS CS RK1215