Bangladesh JV first local firms to develop gas field

DHAKA, Oct 17 (Reuters) Three state-owned energy firms will jointly develop a new gas field in Bangladesh in a wider effort to limit reliance on foreign companies, a government adviser said on Tuesday.

The joint venture comprising Bangladesh Petroleum Exploration and Production Co. Ltd. (BAPEX), Bangladesh Gas Fields Co. Ltd. and Sylhet Gas Fields, would be the first by domestic firms to develop a gas field in the country, energy adviser Mahmudur Rahman told Reuters.

The three have signed a memorandum of understanding to jointly develop the Begumganj gas field, about 180 km (112 miles) southeast of the capital Dhaka. They will invest 3.0 billion taka (.28 million) and enjoy equal shares, he added.

''By this venture we are encouraging our own energy firms to develop gas fields to reduce dependence on foreign firms,'' Mahmudur said.

''If we succeed, may be in future we will not award foreign firms to explore on-shore gas fields. But we will offer foreign companies to develop offshore gas fields as we don't have financial and technical capabilities for sea exploration,'' the adviser said.

The Begumganj field, located in block 10, has proven reserves of about 32 billion cubic feet (bcf) of gas, but energy officials said the reserves could be up to 400 bcf.

The field was discovered in 1977 and it was expected that about 10 million cubic feet of gas could be extracted from this field each day, officials said.

At present four international oil companies are engaged in the development and operation of 10 out of the country's 23 hydrocarbon blocks.

In 1993, Bangladesh divided its exploration sites into 23 blocks, including seven in the offshore. BAPEX is working in some of the remaining blocks.

The international oil firms are U.S.-based Unocal Corp., which has been acquired by Chevron Corp., UK-based Cairn Energy Plc and Canada-based Niko Resources Ltd But Niko in June said it was scaling back operations just months after unveiling a new investment plan for the country, due to disputes with the government, putting a million investment plan on hold. Niko is producing a small amount of gas from the Feni gas field.

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

REUTERS SBA DS1427