TO SELL OR NOT TO SELL: ASSESSMENTS OF UNDISCOVERED HYDROCARBONS - AN EXAMPLE FROM BANGLADESH

The Government of Bangladesh (GOB) is faced with a major policy decision – whether or not to export some of its natural gas resources into international markets. At present, international oil companies (IOCs) operating in Bangladesh are producing natural gas under production-sharing contracts with the GOB. The combined production of the IOCs and the Bangladesh national oil company, Petrobangla, are more than sufficient to meet the present internal needs of Bangladesh for natural gas, and proven and probable reserves of 12-15 trillion cubic feet (Tcf) are sufficient to meet the needs of Bangladesh for several decades. It appears that, at present, renewed large-scale exploration efforts by the IOCs will not occur without additional export markets. A recent assessment of Bangladesh’s natural gas resources in the large, lightly explored Ganges-Brahmaputra delta by a team of scientists and engineers from Petrobangla and the U.S. Geological Survey resulted in an estimate (mean) of about 32.1 Tcf of technically recoverable undiscovered natural gas. This estimate assumes active exploration for natural gas for the next 30 years, and does not include the potential for gas in small fields, in the large deep-water portion of the Bengal fan, or for field growth of discovered and potential undiscovered natural gas fields. Although the long-term development of internal markets for natural gas within Bangladesh is a first priority of GOB, it appears that the IOC’s will tailor their immediate exploration efforts to the size of current potential markets, which will result in early returns on capital investment.