[🇧🇩] Energy Security of Bangladesh

[Saif]

Offshore oil and gas exploration delayed further

Offshore exploration for oil and gas in the Bay of Bengal is being delayed again as after not receiving satisfactory response, the immediate past government had approved the proposal to extend the deadline to participate in the tender by three months.

en.prothomalo.com

Offshore oil and gas exploration delayed further
Mohiuddin Dhaka
Published: 01 Sep 2024, 10: 47

Offshore oil and gas explorationFile Photo

Offshore exploration for oil and gas in the Bay of Bengal is being delayed again as after not receiving satisfactory response, the immediate past government had approved the proposal to extend the deadline to participate in the tender by three months.

In the meantime the government has changed hands. Once the interim government issues directives, the tender deadline will be extended. This was learnt from sources in the energy and mineral resources division.

With multi-client survey revealing potential of offshore gas, a number of foreign companies last year expressed their interest in carrying out oil and gas exploration. The energy and mineral resources division sources have said 55 companies were invited to take part in the tender. Six companies have bought tender documents. The dead line to participate in the tender is 9 September.

The maritime territory dispute with India was settled in 2012 and with Myanmar in 2014. Though new Production Sharing Contracts (PSC) were drawn up in 2019, no tenders were floated. Then three years were taken to finalise PSC-2023. On 10 March this year Bangladesh Oil, Gas and Mineral Resources Corporation (Petrobangla) floated an international tender. Previously the last tender had been floated in 2016.

Petrobangla chairman Zanendra Nath Sarkar told Prothom Alo on Wednesday, approval has been taken from the energy and mineral resources division to extend the tender deadline by three months. After approval of the power, energy and mineral resources division is taken, a new notice will be issued.

In the meantime, tenders have been called for 15 deep sea blocks and 9 shallow blocks. Petrobangla officials have said, facilities have been considerably increased this time to attract foreign investment. Interests of the investing companies are also being given importance along with the interests of the country.

Due to political instability, foreign companies didn't want to come. Now the situation has improved. If the deadline is extended by three months, perhaps there will be a good response Badrul Imam, geologist.

It has been learnt that among the multinational oil and gas companies, the US companies ExxonMobil and Chevron, Malaysian company Petronas, Norway and France's joint venture TGS and Schlumberger, Japan's Inpex Corporation and JOGMEC, China's CNOOC, Italy's Eni SPA, Singapore's KrisEnergy and India's ONGC have shown interest at various times and have contacted Petrobangla.

According to Petrobangla officials, after completing the tender process, the contract can be signed in the first half of next year. Then it will take a couple of more months for them to being their vessels and equipment. However, some say after finishing all the details, exploration may begin in 2026.

There are 26 blocks in the Bay of Bengal, 15 deep sea and 11 shallow sea. On 2010 ConocoPhillips got the contract to work on two offshore blocks. They carried out 2D survey but left because their demand for an increase in gas price was not met. Similarly, Australia's Santos and South Korea's Posco Daewoo also abandoned work after signing the contract. Now only the Indian company ONGC is carrying out exploration in two blocks in the shallow sea.

A Petrobangla official, on condition of anonymity, said according to contract, ONGC has up till next February. They drilled one well and found no gas. They are supposed to drill another well. Investment has increased more than planned. In inviting tender thrice for drilling well, they got abnormal rates and so they have not applied to extend their term. They are likely to leave in February.

Petrobangla sources say, Germany's Schlumberger was tasked with carrying out a preliminary feasibility study for offshore prospects. Any interested company can buy the information of the survey. Petrobangla also has details of the ConocoPhillips 2D survey. This too indicates the presence of gas in the Bay of Bengal, though extractable gas reserves cannot be determined without drilling exploratory wells. Till now no well has been drilled in the deep sea. But the two neighbouring countries India and Myanmar have both discovered gas in the same sea.

Geologist Badrul Imam, speaking to Prothom Alo, said that it has already very late. But due to political instability, foreign companies didn't want to come. Now the situation has improved. If the deadline is extended by three months, perhaps there will be a good response. After that, it would not be right to extend the time any further.

*This report appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir​

 

[Saif]

Significant impact of cut on fuel prices unlikely

Under the monthly fuel adjustment introduced by the deposed government in March last, the first such revision to the relief of some has been effected by the interim government. The relief is because of the downward adjustment of fuel oil prices. However, the slashing of oil prices is unlikely to be

thefinancialexpress.com.bd

Significant impact of cut on fuel prices unlikely
Published :
Sep 02, 2024 23:04
Updated :
Sep 02, 2024 23:04

Under the monthly fuel adjustment introduced by the deposed government in March last, the first such revision to the relief of some has been effected by the interim government. The relief is because of the downward adjustment of fuel oil prices. However, the slashing of oil prices is unlikely to benefit all strata of society. With a nominal cut by Tk 1.25 on a litre of kerosene and diesel for the month of September without any such adjustment in August by the previous administration, the more deserving lower segments of society will hardly benefit from the move. These segments are the major consumers of these two types of fuel oil. Petrol and octane are considered luxury fuels for reasons understandable and the two have become significantly less costly by Tk 6.0 a litre from Tk 127 down to Tk121 and from Tk 131 to Tk 125 respectively.

The inescapable fact is that the poorer segments of society reeling from unrelenting inflation and lately from the impact of floods in several areas of the country needed some pragmatic move towards lessening their sufferings. If farmers who need diesel for operation of irrigation pumps or boatmen for trawlers or mechanised boats as well as public buses, trucks and covered vans for running them could enjoy a substantial cut on this particular type of fuel, it would have a beneficial impact on production of crops and transportation of commodities. This would ultimately reflect on the galloping inflation. Petrol used in cars, on the other hand, much as it may become cheaper, will have no or little impact on the economy. Had the price tags for different types of oil been reversed, it would make an immediate impact on transport fair and carrying costs of commodities including the daily essentials. Under the guideline on automatic oil pricing the Bangladesh Petroleum Corporation (BPC) prepared, the prices between diesel and petrol/octane have to vary by at least Tk 10. There is no bar to have a higher price differential between those. In fact, the price gap is of Tk 15.50 between kerosene/diesel and petroleum and of Tk 19.50 between octane and the former cheaper variety now costing Tk105.50 a litre.

Effective from September 1, the new fuel prices are unlikely to give enough cause for celebration by the common people. There is a need for a comprehensive review of the requirements of fuel oils in different areas in order to assess the priority sectors in terms of production and contribution to the economy. Bangladesh's domestic oil production is next to nothing and hence it must prioritise the use of imported fuel for reaping the optimal benefits.

In this context, it is worth noting that oil import in 2023 declined by 20 per cent not because prices went up but because devaluation of Taka and dollar crunch did not allow the import of a little over 10 million tonnes it imported in 2022. With almost similar amount of expenditure, the country ended up importing 8.26 million tonnes in 2023. Since there is no scope for import of oil by private companies other than the BPC, industrial units with reduced availability of fuel had to curtail production. This explains why a contractionary monetary policy was followed and the economy shrank. So there is no alternative to rationalising use of fuel oils.​

 

[Bilal9]

Adani says it supplies electricity to Bangladesh at cheapest rate

Adani Power, an Indian multinational power and energy company, says it supplies electricity to Bangladesh at the cheapest rate among all other imported coal-based plants, according to a CNBC report. In response to claims of supplying costly power to Bangladesh, the company pointed out the comparat

thefinancialexpress.com.bd

Adani says it supplies electricity to Bangladesh at cheapest rate
FE ONLINE DESK
Published :
Aug 30, 2024 14:26
Updated :
Aug 30, 2024 14:26

View attachment 7977

Adani Power, an Indian multinational power and energy company, says it supplies electricity to Bangladesh at the cheapest rate among all other imported coal-based plants, according to a CNBC report.

In response to claims of supplying costly power to Bangladesh, the company pointed out the comparative power costs detailed in the Bangladesh Power Development Board’s report for the 2022-2023 fiscal year.

The company sources stated that it supplies electricity to Bangladesh at a rate of Tk 14.02 per unit, compared to Tk 16.02 per unit from the Payra Power Plant and Tk 14.12 per unit from the Rampal Power Plant.

The company also referenced the average power prices over the last 12 months, as per the merit order dispatch data.

The average per unit price of electricity provided by Adani Power in last 12 months was Tk 11.89. Meanwhile, the average price of Matarbari Power Plant in the period was Tk 13.36, Payra’s price was Tk 12.00, and Rampal’s price was Tk 13.57 per unit. The cost per unit includes capacity charge, fuel cost and variable cost.

Fully commissioned in July 2023, Adani Power's Godda plant uses imported coal and supplies about 7 to 10 per cent of Bangladesh’s total power demand.

As per company sources, Bangladesh currently has long-term Power Purchase Agreements (PPAs) with four other imported coal-based power generators—Payra, Rampal, Matarbari, and Barisal Electric Power.​

We really do not need Adani's "cheap" electricity. We have plenty of surplus power generation options already.

Scrap the deal I say, good riddance. Stop financing Adani and indirectly, Modi.

Rampal for that matter - can go as well. Meaning the Indian consultants and their operational help as per voidable agreement.

Just use the "escape clause".

 

[Saif]

Hydropower import from Nepal: India seeks 'variable' transmission charge

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational. The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of

thefinancialexpress.com.bd

Hydropower import from Nepal: India seeks 'variable' transmission charge
Syful Islam
Published :
Sep 04, 2024 09:45
Updated :
Sep 04, 2024 09:45

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational.

The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of electricity from Nepal into Bheramara of Bangladesh in addition to Tk 0.09 as 'trade-in' margin.

Trade-in margin is a fixed charge and has to be paid in Indian rupee while the transmission charge will remain flexible and be paid in US dollar.

Nepal will get Tk 7.32 as hydropower price in US dollar for selling 40-megawatt electricity from its two power plants.

In June this year, the power division got tariff approval from the cabinet committee on government purchase for importing electricity from the Himalayan country.

Officials concerned told the FE that power adviser M. Fouzul Kabir Khan Monday approved a power-division proposal to go forward making a tripartite deal among Nepal Electricity Authority, NTPC Vidyut Vyapar Nigam Limited, and Bangladesh Power Development Board to begin inflow of electricity.

The five-year agreement is expected to be completed in a few weeks, according to Power Division officials.

Before advancing for the tripartite agreement, the Power Division sought opinion from the Finance Division, Financial Institutions Division, the National Board of Revenue, and the central bank, as payment in foreign currency and duty and taxes are involved with the power trade.

Sources have said the power division has so far received opinion from the finance division where the custodian of the coffer insisted that the transmission charge should be fixed one like the other charges.

Unless the transmission charge is fixed, India can raise it "arbitrarily at any time, causing trouble in cost estimation for the finance division".

The finance division suggested the power division to renegotiate the charge and make it fixed instead of variable.

Power Division Senior Secretary Habibur Rahman could not be reached for a comment in this regard despite repeated attempts.

However, a senior Power Division official told the FE that the transmission charge has been kept flexible in line with the rules of the Central Electricity Regulatory Commission of India that was enacted in 2018.

"We have to follow Indian rules if we want to use its transmission line,' said the official, seeking anonymity.

The official thinks the tripartite deal will open a new avenue for Bangladesh for cross-border power trade, creating scope to import more low-cost electricity from Nepal and Bhutan.

However, a finance official has said so far India has no deal for cross- border electricity transmission and Bangladesh had enough scope to negotiate and fix the transmission charge instead of keeping it changeable.

"If we sign the deal keeping the transmission charge flexible, India will take the advantage and raise the charge as and when it wants," he says.

According to purchase committee's approval, Bangladesh will have to spend Tk 1.30 billion annually to import power from Nepal. Of the total sum, India will get Tk 120 million as transmission charge and Tk 14 million as trade-in charge.

If the transmission charge is increased any time during the deal tenure, the cost will go up further, a Finance Division official says.​

 

[Saif]

Energy sector graft to be identified in White Paper

The White Paper Preparation Committee is expected to find out the irregularities and corruption committed in the energy and power sector during the tenure of the immediate-past government, committee chief Dr Debapriya Bhattacharya said on Tuesday. "If necessary, we would review the agreements with

thefinancialexpress.com.bd

Energy sector graft to be identified in White Paper
Committee chief says as areas of work selected in its second meeting
FE REPORT
Published :
Sep 04, 2024 00:31
Updated :
Sep 04, 2024 00:31

The White Paper Preparation Committee is expected to find out the irregularities and corruption committed in the energy and power sector during the tenure of the immediate-past government, committee chief Dr Debapriya Bhattacharya said on Tuesday.

"If necessary, we would review the agreements with foreign companies and parties in the sector," he told journalists, following the second meeting of the committee in the capital. The first meeting was held on August 29.

Dr Debapriya, also a distinguished fellow of the Centre for Policy Dialogue (CPD), said that the reasons and extent of the capital flight from Bangladesh would also be reflected in the paper.

"We have selected some areas and sectors to prepare the paper," he said. These are: macro economy, energy sector, health and education, and some institutional issues like banking sector, tax administration, capital flight, mega projects, poverty, inequality, and regional disparity will be reflected there.

"In today's meeting, we have assigned our members specific areas of coverage. The method of writing reports has also been determined," he added.

The committee members will hold discussion with different expert groups, including researchers and professors in Dhaka and outside Dhaka and even outside Bangladesh for preparing the reports, said the committee chief.

"We will collect information from different sources. Then we will verify the sources critically. We will also compare the available information with the best global practices to ensure a standard form. We will also find our better research on the areas being touched," he added.

He said the committee is expected to complete its preliminary work within the next two months before finalising the white paper.​

 

[Bilal9]

Hydropower import from Nepal: India seeks 'variable' transmission charge

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational. The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of

thefinancialexpress.com.bd

Hydropower import from Nepal: India seeks 'variable' transmission charge
Syful Islam
Published :
Sep 04, 2024 09:45
Updated :
Sep 04, 2024 09:45

View attachment 8056

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational.

The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of electricity from Nepal into Bheramara of Bangladesh in addition to Tk 0.09 as 'trade-in' margin.

Trade-in margin is a fixed charge and has to be paid in Indian rupee while the transmission charge will remain flexible and be paid in US dollar.

Nepal will get Tk 7.32 as hydropower price in US dollar for selling 40-megawatt electricity from its two power plants.

In June this year, the power division got tariff approval from the cabinet committee on government purchase for importing electricity from the Himalayan country.

Officials concerned told the FE that power adviser M. Fouzul Kabir Khan Monday approved a power-division proposal to go forward making a tripartite deal among Nepal Electricity Authority, NTPC Vidyut Vyapar Nigam Limited, and Bangladesh Power Development Board to begin inflow of electricity.

The five-year agreement is expected to be completed in a few weeks, according to Power Division officials.

Before advancing for the tripartite agreement, the Power Division sought opinion from the Finance Division, Financial Institutions Division, the National Board of Revenue, and the central bank, as payment in foreign currency and duty and taxes are involved with the power trade.

Sources have said the power division has so far received opinion from the finance division where the custodian of the coffer insisted that the transmission charge should be fixed one like the other charges.

Unless the transmission charge is fixed, India can raise it "arbitrarily at any time, causing trouble in cost estimation for the finance division".

The finance division suggested the power division to renegotiate the charge and make it fixed instead of variable.

Power Division Senior Secretary Habibur Rahman could not be reached for a comment in this regard despite repeated attempts.

However, a senior Power Division official told the FE that the transmission charge has been kept flexible in line with the rules of the Central Electricity Regulatory Commission of India that was enacted in 2018.

"We have to follow Indian rules if we want to use its transmission line,' said the official, seeking anonymity.

The official thinks the tripartite deal will open a new avenue for Bangladesh for cross-border power trade, creating scope to import more low-cost electricity from Nepal and Bhutan.

However, a finance official has said so far India has no deal for cross- border electricity transmission and Bangladesh had enough scope to negotiate and fix the transmission charge instead of keeping it changeable.

"If we sign the deal keeping the transmission charge flexible, India will take the advantage and raise the charge as and when it wants," he says.

According to purchase committee's approval, Bangladesh will have to spend Tk 1.30 billion annually to import power from Nepal. Of the total sum, India will get Tk 120 million as transmission charge and Tk 14 million as trade-in charge.

If the transmission charge is increased any time during the deal tenure, the cost will go up further, a Finance Division official says.​

IMHO - depending on power transmission via or through India from a third country (Nepal or Bhutan) or power generated from within India (like Adani) is a strategic security risk for Bangladesh.

Any leverage given to India which they have control of - they will end up using to their full advantage.

Indian whims will mean Bangladesh will run short of power which is sometimes critical for industrial production, especially for exports.

We should invest more in power generation within our borders, and that should (increasingly) be renewables like Solar energy.

One or two deals with Nepal can exist where they supply token power, Nepal as a friendly nation are in need of revenue as well of course.

 

[Saif]

Restoring power to the people: A step towards a fair energy pricing system

For nearly two years, Bangladeshi consumers have suffered under an executive system that gave the government unchecked power to set energy prices without their input.

www.thedailystar.net

Restoring power to the people: A step towards a fair energy pricing system

A major issue is the inefficiency within companies like BPC, where operational problems, such as fuel leakages, are passed on to consumers through higher prices. FILE PHOTO: REUTERS

Exactly 10 days after taking office, the interim government of Bangladesh made a significant shift in the power and energy sector by announcing the discontinuation of the Quick Enhancement of Energy and Power Supply Act, 2010 and the cancellation of its executive authority to raise power and gas prices without a public hearing by the Bangladesh Energy Regulatory Commission (BERC). This much-needed shift towards transparency and accountability repeals the controversial clause, which allowed the Ministry of Power, Energy and Mineral Resources to unilaterally set energy prices, and will help restore BERC's authority. This reinstatement of public hearings marks a return to democratic principles in energy governance and reflects a broader commitment to safeguarding consumer interests.

For nearly two years, Bangladeshi consumers have suffered under an executive system that gave the government unchecked power to set energy prices without their input. The 2022 amendment to the BERC Act was intended to stabilise energy supply and address economic needs quickly. Instead, it led to repeated price hikes, straining household budgets and causing widespread dissatisfaction. In 2024 alone, the former government raised electricity tariffs four times without offering any public justification.

The now-repealed Section 34 (A) of the BERC Act bypassed the regulatory oversight intended to check government power, undermining transparency and public participation. By sidelining BERC, the government weakened the commission's role as a regulatory authority and eroded public trust. Without public hearings, consumers felt powerless and excluded, leading to a sense of injustice and disenfranchisement.

Repealing the ministry's price-setting powers and reinstating BERC's role is more than just restoring procedure—it represents a commitment to public involvement in crucial decisions. This move underscores the government's dedication to transparency and good governance, particularly in the energy sector. However, while reintroducing public hearings is a positive step, it alone cannot ensure fair or rational energy pricing. The existing challenges, along with BERC's diminished authority since the 2020 amendments, raise doubts about the effectiveness of this approach in truly serving the public interest.

In addition to electricity and gas prices, BERC should also take responsibility for setting fuel oil prices, a role currently held by the Bangladesh Petroleum Corporation (BPC). BPC's dual role as both the sole importer and regulatory authority raises concerns about the credibility of its price determinations, especially for petrol, diesel, octane, and kerosene. Since BERC already regulates the price of imported LPG, extending this responsibility to other fuels would be a logical and necessary step.

Public hearings enhance transparency by involving stakeholders in the price-setting process, but transparency alone does not guarantee rational tariff outcomes. Anomalies in the financial accounts of public authorities raise questions about financial transparency and credibility. The data provided, especially by the BPC, must be rigorously scrutinised to ensure it reflects the true financial state of the energy sector. Concerns are growing that information from BPC and the Bangladesh Power Development Board (BPDB) may not be accurate, with discrepancies in financial reports potentially leading to misguided decisions.

A major issue is the inefficiency within companies like BPC, where operational problems, such as fuel leakages, are passed on to consumers through higher prices. These inefficiencies should not become a public burden. Instead, they must be measured, reported, and resolved at the source to ensure that price adjustments reflect actual costs, not the inefficiencies of the providers.

To achieve true fairness and effectiveness in energy pricing, BERC's original powers from the 2003 act must be reinstated. Before the 2023 amendments, BERC had the authority to conduct energy audits, enforce standardisation, introduce competitive bidding, and hold both government and private entities accountable. The legislative weakening of BERC has significantly undermined its role as an independent regulator. To ensure an effective energy transition, these crucial powers must be restored.

Additionally, competitive pricing should align with international market standards to ensure that Bangladesh's energy prices reflect global trends. Pricing mechanisms must also account for the broader impact on the transport and power sectors, which are heavily reliant on energy costs. Any new pricing structure should be implemented with careful consideration of its ripple effects across these critical sectors to avoid unintended economic disruptions.

Helen Mashiyat Preoty is senior research associate at the Centre for Policy Dialogue (CPD).​

 

[Saif]

Nat'l body formed to review AL govt’s power, energy deals

The interim government has decided to review the deals signed under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 by the previous government.

www.thedailystar.net

Nat'l body formed to review AL govt’s power, energy deals

The interim government has decided to review the deals signed under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 by the previous government.

Today, the power division formed a five-member national committee to review the contracts signed under the act, said a gazette notification issued by the Ministry of Power, Energy and Mineral Resources.

Justice Md Moinul Islam Chowdhury, a retired judge of the High Court will lead the committee.

The other members of the committee are Prof Abdul Hasib Chowdhury of Buet, chartered accountant Ali Ashfaq, former lead economist of World Bank's Dhaka office Zahid Hussain, and prof Mushtaq Khan at the University of London, the gazette notification added.​