Bangladesh to Explore Gas in Restive Hill Region

DHAKA (Dow Jones Newswires), Dec. 28, 2010

Bangladesh has invited some of the world's leading state-owned gas giants to help explore its insurgency-hit southeastern hill tracts region, an official said Tuesday.

The Chittagong Hill Tracts, or CHT, region makes up one-tenth of the South Asian country's landmass but has been largely left unexplored due to a decades-long insurgency involving mainly Buddhist tribal groups.

Following the signing of a peace deal in 1997, the central government is now moving in to explore for gas, said Murtaza Ahmed Faruq Chisti, head of state-owned exploration company, Bapex.

"We are currently holding talks with Gazprom to see if they can join us in a joint exploration work in the CHT," he said.

He said Bangladesh has also invited "to talk on the issue" Chinese firms China Petrochemical Corp., known as Sinopec Group, and Cnooc; Thailand's PTT Exploration & Production; Malaysia's Petronas and India's Oil & Natural Gas Corp. Ltd.

"We want to sign deals as quickly as possible to start exploring for gas in this potential energy-rich region," he said, adding that energy giant Shell had done preliminary explorations in the region decades ago.

The move comes as Bangladesh has been struggling with an acute energy crisis with domestic demand far outstripping supply amid rapid economic growth.

Last year, three offshore gas blocks were awarded to oil giants ConocoPhillips and Tullow Oil, but the government couldn't strike final deals due to ownership disputes with India and Myanmar.

Bangladesh now faces a 20% shortfall in daily gas supply and has stopped supplying gas to energy-guzzling state fertilizer plants and new factories.

The insurgency in the CHT has claimed more than 2,500 lives since it began in the early 1980s, according to official figures.

Despite the formal treaty and the withdrawal of most troops last year, low-intensity unrest has continued as tribal groups demand key clauses of the deal be implemented, including dismantling settlers' villages and army camps.

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