American company Chevron Bangladesh has halted development activities due to non-payment of bills. Concerned parties fear a collapse in gas production.
The company has been supplying about 60 percent of domestic gas. The project to install a compressor in the Jalalabad gas field has been stalled due to outstanding issues. Petrobangla expects that the daily gas production will increase by about 70 million cubic feet if the compressor is installed.
The company's outstanding bill has exceeded 160 million dollars which is equal to their 4-month bill. The company is supplying gas worth 40 million dollars every month. The outstanding bills have not only been due during the interim government, but also since the previous government, and the development project has been stalled due to non-payment of gas bills on time. Despite buying tenders in the deep sea, it has refrained from submitting at the last minute.
The Jalalabad compressor project was planned to start in early 2024. The project has been in operation for 2 years after the project work began. The plan was to supply gas in 2026. But work has not started yet.
Sources said that Bangladesh announced a roadmap in October to pay the arrears. In that letter, it promised to pay 20 million arrears every month along with the running bill. After that letter, the promised amount was released only in November. After that, the arrears continued to increase as before.
Development activities are being hampered due to the gas bill arrears, and Chevron sent a letter on January 9 to pay at least 75 million dollars as soon as possible. The letter, signed by the company's Managing Director and President Eric M. Walker, sought the Secretary's intervention to pay the arrears. Even then, the situation has not improved much. The arrears were 150 million dollars at that time, but have crossed 160 million dollars this month.
When asked about the amount of outstanding dues, Chevron Bangladesh Manager (Media and Communication) Sheikh Zahidur Rahman told Barta24.com that he cannot comment on financial issues due to the company's policy.
Are development activities being disrupted? In response to the question, Sheikh Zahidur Rahman said that the work of a project planned to increase gas production at the Jalalabad Gas Plant has been suspended until the outstanding dues are settled.
He said that the speedy payment of outstanding dues will increase confidence in further investment and increasing gas supply in Bangladesh. We are hopeful that the situation will improve soon.
The multinational company Chevron Bangladesh's outstanding dues have been discussed for a long time. Bangladesh has occasionally waived some money. Still, the company's gas bills for several months are outstanding. Last December, Chevron International Exploration and Production Vice President Frank Casullo visited Bangladesh. During that visit, he met with Chief Adviser Dr. Muhammad Yunus in Dhaka. Sources said that the issue of arrears was also discussed in that meeting.
Chevron is one of the world's leading integrated energy companies. The company has been extracting gas in the Block-12, 13 and 14 areas of Bangladesh. It is supplying about 60 percent of the domestic natural gas production and 83 percent of the condensate production. The largest of these is the Bibiana gas field. It supplied 954.1 million cubic meters of gas on March 17. At one time, the gas field produced over 1,300 million cubic meters, but production has decreased due to declining reserves.
At one time, domestic gas fields produced about 2,800 million cubic meters of gas daily, but only 1,883 million cubic feet of gas was found on March 17. Production is constantly decreasing due to declining reserves. The daily demand of authorized gas customers is about 5.5 million cubic feet. Against which, about 2.8 million cubic feet is being supplied. Demand is increasing every day, and LNG imports were started in 2018 to meet the increasing demand. Gas is available from Chevron at 2.76 dollars, while the cost of importing the same amount of gas is around 10.50 dollars. Along with Chevron, the Qatari government has also urged Bangladesh to pay its dues. 40 cargoes of LNG are imported from Qatar annually on a G2G basis. Just as Petrobangla owes money to various organizations, Petrobangla owes more than Tk. 28,000 crore to various organizations, including the power sector. Of this, about Tk. 18,000 crore is due to the power sector. LNG suppliers from the spot markets are losing interest due to not receiving bills on time. Petrobangla sources said that suppliers are often not available despite repeated tenders.