CAPITAL: Dhaka

MONETARY UNIT: Taka

REFINING CAPACITY: 33,000 b/cd

OIL PRODUCTION: 2,000 b/d

OIL RESERVES: 56.9 million bbl

GAS RESERVES: 10.6 tcf

The Bangladesh government maintained its resistance to natural gas exports to India, a move the government and opposition parties both opposed.

Oil companies had warned they would not spend money to develop reserves they could not bring to market.

Opposition parties claimed gas exports would drain the country`s only major energy resource. The government was unsure about the size of reserves; Bangladesh Oil, Gas & Mineral Corp., the state-owned gas exploration company, said they were only 12.6 tcf.

Oil firms said reserves exceeded 38 tcf, at least a 30-year supply for Bangladesh.

Andrew Vaughan, managing director of Shell Bangladesh Exploration & Development BV, said, "Bangladesh has potential in the energy sector to attract massive foreign investment. But the country should make clear its intention of exporting gas after meeting domestic needs."

He said if Bangladesh wanted 7%/year economic growth it would need more than $12 billion in foreign investment over 15 years in the energy sector.

"If the gas consumption does not grow it will be difficult to have foreign direct investment in the country," he said.

Upstream

In 1999 Bangladesh was producing more than 900 MMcfd of gas, including 105 MMcfd by British Cairn Energy PLC at offshore Sangu field and 100 MMcfd by Occidental Corp. at northeastern Jalalabad field.

Petrobangla was drilling six wells in Habiganj and Rashidpur gas fields in the northeast to produce 200 MMcfd. It also began producing 40 MMcfd from Bianibazar field.

Petrobangla awarded joint venture partners Cairn and Shell a license for Block 10 in Bangladesh.

The partners were earlier awarded Block 5. Cairn and Shell began negotiations with Petrobangla over production sharing contract conditions for the two licenses. Shell took over operatorship of Blocks 15 and 16 off Bangladesh from Cairn. The companies agreed for Shell to operate assets mainly owned by Cairn, including Sangu field.

Occidental of Bangladesh Ltd. started gas production from Jalalabad field on Block 13 in Bangladesh`s Sylhet province. Initial production was 100 MMcfd of gas, equal to about 12% of the country`s gas demand.

The field also produced 2,000 b/d of condensate, which doubled Bangladesh`s output. Development of Jalalabad, with an estimated 1.6 tcf of gas in place, began in early 1998. Niko Resources Ltd., Calgary, signed a deal with Petrobangla to develop and produce Chattak, Feni, and Kamta gas fields. The shut-in fields had produced 84 bcf of gas.

Downstream

Bangladesh began importing unleaded gasoline on July 1, 1999, in an effort to reduce emissions from automobiles.

Also, the government planned to place high tariffs on imports of two-stroke engines and to require that catalytic converters be installed in buses, trucks, and other motorized vehicles. Wesfarmers Energy Pty. Ltd., Perth, formed a consortium with Malaysia`s Elpiji and Bangladesh`s Palmal Group to import, market, and distribute LPG in Bangladesh. Wesfarmers had a 55% stake.

The group planned to build an import terminal in 2000 and establish distribution points in southern Bangladesh.

Wesfarmers produced about 250,000 tonnes/year of LPG, which it marketed and distributed throughout mainland Australia.

Unocal Corp. was planning the $700 million Western Region Integrated Project, which would develop Shahabajpur gas field in southern Bhola and lay a 93 mile pipeline to southern Khulna to feed a 350 Mw power plant. Petrobangla opened the field, which had reserves of 350 bcf.