Sunday, June 30th, 2013

Over-extraction by Chevron could destroy gas fields

The US-based international oil company, Chevron is now extracting an additional 116mmcfd (millions of cubic feet per day) of gas from its three gas fields, as called for by the government.

According to the Production Sharing Contract (PSC), the company is expected to produce 1060mmcfd of gas, but as of June 20, now produces 1176mmcfd.

This means Chevron’s contribution amounts to more than half of the country’s total gas production of 2250mmcfd.

Experts say if the additional extraction of gas continues, it might result in the destruction of the gas fields, as was seen at Bakhrabad and Sangu fields that experienced production reductions.

According to the state-run Oil, Gas and Mineral Corporation (Petrobangla), the Jalalabad gas field has the capacity to produce 230mmcfd of gas, but Chevron extracts 242.4mmcfd.

The company extracts 85.8mmcfd of gas from the Moulvibazar gas field instead of 60mmcfd. It is supposed to extract 770mmcfd from the Bibiyana gas field, but is extracting 847.5mmcfd.

When contacted, Naser Ahmed, the external affairs director of Chevron Bangladesh declined to comment on the matter.

Petrobangla director, Muhammad Imaduddin, however, said Chevron is extracting the extra gas to meet demand.

“The over extraction may cause danger to the gas fields,” said energy expert Dr Ijaz Hossain, a professor at the Bangladesh University of Engineering and Technology (BUET).

“The expected gas could not be extracted from the Bakhrabad and Sangu gas fields because of over extraction.”

The Bakhrabad gas field could produce 250mmcfd, but now can only produce 28mmcfd. The Sangu gas field could produce more than 150mmcfd, now reduced to 6mmcfd.

“This is bad luck for us,” said the BUET professor. “Petrobangla has not conducted a study on the gas reserve for a long time. It should have done so before deciding on additional extraction.”

According to the PSC, a company cannot produce more than 7.5% of the proven and probable (P1 plus P2) reserve of gas in a year.

Chevron has interests in two PSCs in Bangladesh, covering Block 12 (Bibiyana field) and Blocks 13 and 14 (Jalalabad and Maulavibazar fields) in the northeastern Sylhet region. The company sells the gas it extracts to the government under long-term sales agreements.

“The additional extraction of gas by Chevron will not hamper the gas fields,” said Petrobangla chairman, Hossain Monsur.

Dr Ijaz said: “There is [a game of] hide and seek about the estimated reserve of the Sangu gas field.”

Energy expert, Badrul Imam, a professor at Dhaka University said: “It has been found from past experience that over extraction affected the gas fields. Petrobangla should take the matter seriously.”

He was skeptical about whether Petrobangla was conducting any monitoring on possible consequences of over extraction.

Source: http://www.dhakatribune.com/environment/2013/jun/23/chevron%E2%80%99s-over-extraction-could-destroy-gas-fields