Cover Article

BAPEX - National Flag Bearer of Bangladesh
Khondkar Abdus Saleque

Gas industry in Bangladesh is more than 50 years old, much older than that of India and China, yet we have fallen far behind them in all the segments of gas value chain. We do not have an exploration company to compare with Indian ONGC or Chinese CNPC. None of Petrobangla companies can match GAIL. We must not talk about any of Petronas companies of Malaysia, which are well ahead. Bangladesh Petroleum Exploration & Production Company Ltd (BAPEX) is a sick and weak company now. It does not have adequate capacity to support its own. After 18 years of formation and despite of rich heritage and track record of predecessor, Exploration Division of Petrobangla it is struggling for existence. This has happened due to very poor gas sector vision & very unfair treatment of Petrobangla. It has not grown into a dynamic self-reliant organization of substance and capability. 

In the last 18 years since 1989 Petrobangla should have grown into a very efficient and self-sustaining dynamic company. But that did not happen. If we do soul-searching we will find right from very outset Bapex was the victim of step-motherly attitude of Petrobangla, very powerful gas sector mafia syndicate planned to keep Bapex crippled to pave the way for the IOCs to dominate our upstream of gas chain. EMRD and Petrobangla management simply played to their tune. In early nineties when BAPEX discovered, Salda and Shabazpur gas fields Prime Minister Khaleda Zia declared that Bapex would be given enough fund and resources to drill four wells every year. But unfortunately that never happened. Bapex was not given fund to carry required exploration efforts; it was not even involved in the further development of our own discovered gas fields. ONGC, the Indian company was given contract to drill development wells in Titas and Habiganj gas fields. Our own Jalalabad gas field was handed over unethically to Occidental. Tiny Irish company Tallow was preferred to hand over the most prized block 9. The Petrobangla top management were silent onlookers.

All these could be avoided if we had a definite vision to make Bapex a competent and efficient drilling company having modern drilling rigs, modern seismic survey equipment, modern laboratory and research facility and a well-trained competent workforce. But over the years people talked about it. But in actual practice these did not happen. The senior Bapex professionals did not get promotions. Non-performing junior officials of Petrobangla were always preferred for promotions, foreign training. The Bapex officials had to fight legal battle to get their service benefits intact. Many competent and efficient professionals left Bapex and got jobs abroad. Many left and went abroad without any firm job commitment. The author met a few in Calgary in 1996 and also in 2002. Consequently it suffered from serious brain drain. Huge inventory of drilling materials were wasted, drilling equipment became junk. If someone visits Madhabpur yard or Chittagong Bapex yard they will find the graveyard of drilling equipment and materials.

The author worked alongside Bapex professionals for a while in 1988 after the Petrobangla Exploration Division, the predecessor of Bapex, discovered Haripur oil field and were preparing for drilling Haripur beside the oil well. The author upon return from a very extensive training on gas transmission from Holland was posted as Manager
(Production), SGFL, to operate the Haripur gas & oil field, Kaillastilla gas field. Chhatak, Beanibazar gas fields were waiting for further development at that stage. The Bapex engineers and professionals used to live beside us on the Chicknagul campus of SGFL. 

We spent several evenings together discussing and dreaming about bright future of Bapex. There were talks about Bapex formation at that stage. Later, the author met Engr Emdadul Haque, Engr Ruhul Ameen, Mr Sattar, and Engr Shamim Siddique while they were involved with the drilling activities of PIU drilling management of Canadian company Challenger in Beanibazar and Kaillashtilla. The author found these persons very competent and knowledgeable. We discussed about the necessity of a separate drilling company at that time. The Canadian drilling manager told us that some of our professionals have competence can work in any major drilling company of the world. Sattar could set up any drilling rig independently. Many drillers, riggers, few petroleum engineers and well site geologists were competent to work for any drilling company of the world given opportunity. Several new engineers recruited in PIU were also doing well. 

But most of these professionals have left Bangladesh gas sector as they were never properly evaluated. Shamim and Ruhul Ameen are doing excellent works abroad for multinational oil companies. Many junior engineers of PIU who later on worked in SGFL at Kaillashtialla are now in Canada and USA.

Petrobangla in 1989 had to form Bapex in the unbundling & restructuring mechanism of vertically integrated gas sector operations. The officials of Drilling Division were transferred to Bapex. But there were so much of controversy and non-transparency in the process that Bapex employees disputed the separation and for several years fought legal battle with Petrobangla. During these years Bapex received serious maltreatment. The competent professionals were ignored in promotion. They did not get proper training. Adequate funds were not given to them to carry forward the drilling program.

Conspiracy for crippling Bapex and in a way the capacity of Bangladesh national company to run exploration and drilling started declining since 1987 after the discovery of oil in Haripur. Sciemiter should never have been here. Pertobangla Drilling Division at that time was more than capable to drill few more wells at Haripur structure to prove the structure. It fact they mobilized for Haripur 8. But following the advent of a highly controversial Scimiter that was abandoned.

The professional rivalry or jealousy among engineers and geologists destroyed the very fundamental basis of Bapex and Petrobangla. In the early nineties Petrobangla was made a sanctuary of controversial and incompetent geologists. Engr. C.M. Mohsin, a very competent and efficient gas executive who had enviable track record in developing BGSL and PIU was devaluated. From the position of Director (Operation) Petrobangla he was transferred as Managing (Director) Bapex, which was struggling for existence at that stage. Mohsin was the pioneer of historic development of Bakhrabad gas field development and gas transmission & distribution in the South East Bangladesh. He also successfully implemented the drilling of northern gas fields as Director (PIU). Several incompetent geologists were upgraded. The period 1990-1996 saw the downgrading and decline of Petrobangla. Many senior and mid level well-trained and competent professionals left Petrobangla companies. Geologists were placed in almost all key positions.

There were no vision, no mission to make Bapex a dynamic self-sustaining unit. Mohsin was made Bapex MD when he should have been made Chairman, Petrobangla. Not only geologists another incompetent professional group the mining engineers just out of jealousy opposed Mohsin. However, Mohsin in his few months as MD Bapex made significant contribution for Bapex. He arranged a regular source of income for Bapex. But soon he joined government as Joint Secy, ministry of communication. After Mohsin the gentlemen who were MD, Bapex did not have the experience or capability to move it forward till Major Mukhtadir Ali was made MD. He tried to make it lively and vibrant. He recruited fresh professionals took up several projects. But due to rivalry with Petrobangla, Bapex could not grow as expected. In the second round bidding Bapex was made 10% equity partner with Cairn in block 5 & 10 and with Chevron in block 7. Bapex was also assigned to develop Shabajpur gas field which it discovered. It also developed Salda. The rigs and other equipment became outdated. Modern rigs became essential. But gas mafias polluted a certain group of Bapex officials. A massive scandal was detected in the refurbishment of a drilling rig. Certain business house of Dhaka manipulated the tender and almost won a contract at about twice the cost. But the scandal was detected in time and appropriate action saved Bapex and Government siphoning of substantial money. The refurbished rig was to be used for exploration at Srikail. The procurement of rig is still in the process.

All the fair thinking Bangladeshis were pleading for strengthening Bapex at that stage. The author presented a keynote technical paper in the 1999 at the Annual Convention of BUET Chemical Engineers Alumni Association. The paper was titled “Problems & Prospect Gas Sector of Bangladesh Gas Sector.” Journalist Shariar Khan of The Daily Star, Prof Nurul Islam of BUET were among the discussants. Among others the author proposed for aggressive exploration and drilling program both in offshore and onshore to expand reserve-resource base to meet emerging demand. Suggested to strengthen Bapex both technically and financially. Strongly recommended to reserve block 8, 9 & 11 for Bapex. The valued audience supported these recommendations. After few days the author was contacted from the office of President of Bangladesh and was asked to send a copy of the paper. But simultaneously the author was grilled by EMRD Additional Secretary who was Chairman of the Evaluation Committee of second round bidding. The author feels proud now that Bapex has exclusive right for exploration at block 8 & 11. Block 9 has been awarded to Tallow with lot of Scandals.

Niko entered the scene in late 90s. The fortune seekers exploited the opportunity. They realized that if Bapex is turned into Exploration & Production Company and made junior partner of Niko, people will accept Niko for the development of Feni, Chhatak and Kamta gas fields. These fields were illegally declared marginal despite of serious logical reservations of Petrobangla professionals. Moreover, Bapex was struggling as exploration company. They had no previous experience in production. BGFCL and SGFL were performing well as production companies. They were more than capable to look after Feni and Chhatak. Bapex should have been strengthened as exploration company with requisite trained manpower, equipment and resources. BAPEX could develop all BGFCL and SGFL gas fields the way they have been involved now in Titas, Kaillashtila, Narsingdi, Habiganj, Haripur gas fields. But a novice Niko was handed over our discovered gas field and an unexplored frontier Tengratilla in a dubious deal. The corruption and misuses of power are under probe now. The people responsible for this must get due punishment.

Meantime Bapex developed Fenchuganj and started production from the field. They started production from Salda earlier on. Its activity in Shahbazpu, Bhola was messed up with the political controversy regarding the location of Bhola power plant. The BNP-led four-party government could not break the impasse although in a committee report which the author was a member strongly suggested the 30 MW power plant at Bhola town. Mr. Hafiz Ibrahim, a BNP MP and brother of infamous Giasuddin Al Mamun, unnecessary insisted on relocating the power plant near the gas field. Power Ministry could not prevail over it. Consequently the power plant and Bapex initiative suffered. 

Bapex however faltered at Srikail. They did not plan this exploration properly and stopped drilling short of target depth being excited from a gas show from a shallower pocket. The electronic media and print made were sent on a wrong signal of new gas discovery.

It continued the survey works in block 11 and found some structure in Kapasia and Sundalpur. Bapex also carried out seismic survey for both Cairn and Chevron in blocks 5, 7 & 10. It also successfully drilled production wells for BGFCL in Titas and Narsingdi and for SGFL in Kaillashtilla and Haripur.

So despite severe constraints Bapex performed appreciably in Bangladesh standard in the recent past. But it still lacks competent manpower, drilling rig, seismic equipment and other resources. It does not have its own office. There present office is in hired building in a busy congested city area. Once Bapex and its predecessor had some brilliant enterprising petroleum engineers, accomplished drilling engineers and geologists. Now it does not have required petroleum engineers, reservoir experts, drilling engineers, experienced geologists, competent HRD experts and financial analysts. If we check the HRD program of other regional exploration companies like ONGC, Petronas, we can learn how they changed systematically into international drilling company of repute. 

It is very encouraging now that the caretaker government has now realized the requirement of strengthening Bapex and make it the true flag bearer of Bangladesh in the upstream exploration and development of Petroleum. Several new exploration and development is scheduled to be assigned to Bapex. It will be provided that the necessary fund and resources to purchase modern rig and other necessary equipment, carry out development of some relatively smaller gas fields, undertake further development of some gas fields and carry out exploration in its assigned blocks.

The existing capacity of Bapex must be thoroughly assessed and it must be made truly competent to meet the challenges. Bapex must have at least Planning and Engineering Division, Exploration & Drilling Division, Research and Development Division, Reservoir Management Division, Production Management Division, HRD Division, Administration & Finance Division. Some of the above divisions now existing in Petrobangla should be moved to Bapex. It should also have an office of its own. A huge Petrobangla office with bare minimum operational activities is mere wastage.

It is the dream of the nation that Bapex becomes a competent and worthy national exploration company and take care of most of the exploration and development in the onshore area. But to make it happen we must assess its present technical, managerial and financial capacity and assign them the responsibility commensurate to these. Otherwise overburdening Bapex at this stage may prove counter productive and will only benefit that section of our gas syndicate who always conspired to cripple the vital national company to pave the way of unworthy and incompetent international companies like Scimitar, Niko, Occidental to destroy our resources. A strong Bapex could take better control of our exploration activities. It could monitor the works of IOCs in much better way.

Bapex will soon be vested with the responsibility of the following projects.

• Drilling two more development wells at Salda.

• Drilling of additional well at Shahbazpur.

• Develop Semutang.

• Develop Begumganj.

• Futher explore Srikail.

• 3 D seismic survey for BGFCL & SGFL at Titas, Bakhrabad, Habiganj, Rashidpur & Kaillashtilla gas fields.

Government will also provide fund for purchasing a modern rig. We must see the rig procurement do not become a target of the gas mafias again.

Bapex has also requested for an increase for the gas that they deliver to national grid. Present, it gets only Tk 7 per mcf wile the IOCs are paid Tk 200. Petrobangla companies earn Tk 115 per mcf on the average. This can not continue forever. Government is seriously contemplating paying Bapex a price, which will cover cost and add 15% over it. BERC to be relied upon for computing the appropriate price of gas for national producers including Bapex. Unless the gas prices of national companies are increased these companies can never raise their capital after meeting their expenditures to keep the operations going. It should not be a big deal as government is said to have planned to propose a gas price of about 4.5- 5 US$ per mcf for upcoming deep water gas.

Bapex requires training of various professionals. Drilling professionals need certificate from accredited training institutions. Otherwise, Bapex assets can not be have insurance coverage. The Bapex organogram needs to be time tested. It should have its own reservoir study unit and its panning and research cell must have competent professionals. It should pay off the undesirable huge manpower and retain only those who are competent. It should recruit fresh professional. The new MD, Bapex Mr Emaduddin has vision. If supported he will deliver. He is a rare bird in otherwise depleted gas sector. 
For Bapex to achieve success in its assigned tasks it will need committed efficient manpower. For commitment the professionals will need appropriate compensation package. It may follow the way PGCB has organized its salary structure. The officials must be given attractive pay package for retaining competent professionals. Exploration & drilling is a specialized activity. You do not get cheap professionals anywhere. IOCs and dynamic energy world will lure way our young competent professionals if they are not paid well. Shares of Bapex should be let out in the local stock exchange. But before doing that Government should inject some equity.

Bapex is a bit late in the day. It may be a bit of a burden to perform as expected too soon. It may find strategic partners for some operations. But it should be like Niko or Sciemiter. Petronas, Pertamina may be taken as ideal. Partnership will ensure transfer of technology, changing of attitude and aptitude of professionals. Bapex board should also be reorganized with line professionals, competent economists and legal experts. Academicians having no hands on experience and bureaucrats cannot bring any meaningful changes.

Bapex is still competent for most of the works onshore. It could very well develop Jalalabad gas field, could also work in Feni & Chhatak independently. But the self-seekers caused immense damage to our national interest in handing these over to IOCs. If Bapex can conclude strategic partnership with competent drilling companies it can grow as international company of choice in 5-7 years. We must have a clear vision and target and approach aggressively with a mission. It must be involved in someway in drilling offshore for capacity building. If Bapex becomes a truly vibrant company soon some of its professionals struggling abroad in Canada and other countries may return.

Best of luck to our own Bapex and Bangladesh.