The New Nation - Internet Edition

BSS, Dhaka

Petrobangla, the state-run oil and gas company has approved a 12 million US dollar project to complete 3D seismic survey in the Bay of Bengal to explore hydrocarbon potential in Magnama structure, an extension of the Sangu gas field.

"We are set to start the 3D seismic survey in December next in block 16 under which between 350 to 1500 square kilometer seismic would be conducted," a Cairn official told BSS yesterday.

It will take 4 months to complete the seismic and after that we will evaluate the data, however, however, the data will give us a real scenario about the structure, he added.

Following the energy ministry's approval to allow UK-based Cairn Energy for sealing gas to third party other than Petrobangla produced from Magnama and Hatiya, Cairn is now set to go for 3D seismic survey, although, earlier it was declared "inconclusive' by the company.

"The result of this seismic is very important to us as the gas crisis in Chittagong areas is mounting every day, Sangu is declining and we don't have other source to feed the commercial city now we can hope for the best", Professor Hossain Moonsur, Chairman Petrobangla told the agency.

To feed the country's starving energy sector, the government allows the Cairn to explore hydrocarbon potential in the Bay, allowing the company to sale its portion of gas to any third party although it was the second option in PSC model.

Aiming to increase gas production from the Sangu gas field to feed the country's port city Chittagong, Petrobangla asked Cairn Energy two months ago to submit its development plan on Magnama and Hatiya structures in the Bay of Bengal under block 16.

Cairn official said gas production from Magnama and Hatiya structures would be possible by next three and a half years (if there is any), according to the official first it would conduct three-dimensional (3D) seismic survey by next one year, drill appraisal wells in the following year and initiate gas production on completion of development works.

"A total of 500 million US dollar would be required to implement the plan," the official said.

According to PSC, Cairn is selling gas to Petrobnagla at a price of 2.9 US dollar for 1,000 cubic feet (Mcf), following the approval it could fix its rate as per negotiation.

Cairn and the Santos now have 37.5 per cent stake each in the Sangu Development Area and 37.5 per cent each in block 16. Cairn also holds a 45 per cent stake in block 7.