ConocoPhilips Set to Start Seismic in Bay from Feb

Petrobangla has approved a plan by ConocoPhillips to conduct seismic survey in Bangladesh's offshore blocks in February amid hopes for a discovery of a large hydrocarbon structure in the Bay.

Senior Petrobangla officials said the start of the 2D survey by the US oil giant would usher in hunt for oil and gas in the country's deep waters, part of which still remain no-go area due to claims by India and Myanmar.

ConocoPhilips informed Petrobangla that it had hired a Chinese contractor to do the two-dimensional survey, whose results can ascertain presence of oil and gas in a structure, but can't pinpoint the size of the discovery.

"We've approved the ConocoPhillips's proposal to award the contract to the Chinese company BGP. It can now start seismic survey as soon as possible," Petrobangla Director on PSC Muhammad Imaduddin told the FE Tuesday.

He said the seismic survey by ConocoPhillips to delineate the deep offshore prospects will be the country's first-ever deep water hydrocarbon hunt. Irish company Cairn had earlier found gas in shallow water at Sangu in 1990s.

Australian oil company Santos now operates the country's lone operational offshore gas field just off the coast of Chittagong with average natural gas production of only around 14 mmcfd.

"The ConocoPhillips's exploration will help discover the country's deep water hydrocarbon prospects in the Bay of Bengal. It can go a long way to ensure our future energy security," he added.

At present, the country's natural gas supply is overwhelmingly dependent on onshore gas production as over 99 per cent of the total gas output -- 2,024 million cubic feet per day (mmcfd) -- comes from onshore gas fields.

Until now, the country neither has initiated hydrocarbon exploration nor has any data in its deepwater prospects.

But neighbouring India and Myanmar have already discovered major gas fields in deep water gas blocks in the Bay and staked claims in two-thirds of the Bangladesh's 28 deep-water blocks.

ConocoPhillips signed a production sharing contract (PSC) with Petrobangla for oil and gas exploration in DS-08-10 and DS-08-11 blocks in the Bay in June 2011.

Under the PSC, the US firm has nine years to conduct exploration, with five years as a primary exploration period and two years each for the first and second extended exploration periods.

Minimum work programme, under the deal, includes carrying out 973 line km seismic survey and drilling one (optional) well during the initial exploration period.

During the first extended exploration period ConocoPhillips will have to carry out 500 sqkm 3D seismic survey and drill one exploration well having a minimum of 2200 meter from seabed, as minimum bided work programme.

Because of a maritime dispute with Myanmar and India, the US firm will have an access to 5,158 square kilometres areas in the Bay.

It will get another 1,605 sq km for exploration if the maritime dispute with the neighbouring countries is resolved in Bangladesh's favour.

The two blocks that ConocoPhillips has been awarded lie in a water-depth of 1,000-1,500 meters and are some 280 kilometres off Chittagong.

Published by HT Syndication with permission from The Financial Express.