OVL-Gail Plan Foray Into Bangladesh Gas

New Delhi, July 25: | Updated: Jul 26 2002, 05:30am hrs
In a move that will mark India’s entry into Bangladesh’s exploration sector, ONGC Videsh Limited (OVL) and Gas Authority of India Limited (Gail) have drawn up plans to jointly acquire 60 per cent stake in exploration block-22 in Bangladesh. This comes at a time when Bangladesh is yet to make up its mind over the issue of gas exports to India.

The onshore block, located in South-East Bangladesh, is owned by the US-based company Xpronet Inc. Gail and OVL have agreed to “farm in” 30 per cent stake each in onland exploration block-22.

Senior government officials said the prospective gas reserves of this block are estimated at around 25 billion cubic meters (bcm). This is based on the technical evaluation report submitted by a team of Gail officials who visited Dhaka early this year.

“Considering the prospectivity of the block besides its strategic location (as it is close to Blocks 26 of offshore Bengal and A-1 of Myanmar — where both OVL and Gail have investment plans), it will be beneficial to join this block as the entire area is gas prone and has a number of discovered gas fields in adjacent areas,” sources said.

Officials said OVL has in fact got offers for participating in two exploration blocks in Bangladesh. Refusing to give details of the other block they said, “OVL is currently evaluating the technical and commercial data for that block. OVL and Gail have meanwhile conveyed their interest for picking up 30 per cent stake each in Block-22 in Bangladesh”.

Gail’s chairman and managing director, Proshanto Banerjee confirmed the move and said his company’s board has recently cleared the proposal to pick up 30 per cent equity in Block-22.

In order to establish the economic viability of the project, Gail and OVL will now jointly undertake a study on the techno-commercial aspects of this block,” he added.

Sources said Block-22 was originally awarded to UMC Bangladesh Corporation (now Ocean Energy Corporation) and the production sharing contract for this block was signed between the Bangladesh government, Petrobangla and UMC in 1997.

In the same year, Xpronet picked up some stake in the block. Currently the Xpronet Group, sources said, has assumed 100 per cent interest in Block-22.