asia invest -energy sector in bangladesh

Energy Sector in Bangladesh

SECTOR 1

THE ENERGY SECTOR IN BANGLADESH

TABLE OF CONTENTS

GLOSSARY OF ABBREVIATIONS......................................................................................................................................4LIST OF TABLES........................................................................................................................................................................51. THE SIZE AND NATURE OF THE SECTOR ................................................................................................................62. REVIEW OF PRINCIPAL ENERGY SUB-SECTORS...................................................................................................7

2.1 GAS SUB-SECTOR...............................................................................................................................................................72.2. POWER SUB-SECTOR ..................................................................................................................................................... 102.3 OIL SUB-SECTOR ............................................................................................................................................................. 12

3. LIST OF MAJOR LOCAL COMPANIES AND REVIEW OF THEIR EXISTING COLLABORATIONSWITH FOREIGN FIRMS........................................................................................................................................................ 12

3.1 GAS SUB-SECTOR............................................................................................................................................................ 123.2 POWER SUB-SECTOR...................................................................................................................................................... 13

4. FORMS OF CO-OPERATION.......................................................................................................................................... 144.1 GAS SUB-SECTOR............................................................................................................................................................ 144.2 POWER SUB-SECTOR...................................................................................................................................................... 14

5. EUROPEAN AND OTHER FOREIGN COMPANIES PRESENT IN THE ENERGY SECTOR...................... 155.1 GAS AND OIL SUB-SECTORS........................................................................................................................................... 155.2 POWER SUB-SECTOR...................................................................................................................................................... 16

6. ANALYSIS OF IMPORT AND EXPORT FLOWS...................................................................................................... 177. ANALYSIS OF THE MAIN MARKETS........................................................................................................................ 17

7.1 LOCATION OF ENERGY MARKETS (LOCAL, REGIONAL AND INTERNATIONAL)......................................................... 177.2 MARKET TRENDS............................................................................................................................................................. 17

7.2.1 Gas Sub-Sector ....................................................................................................................................................... 177.2.2 Power Sub-Sector................................................................................................................................................... 18

7.3 ROLE AND POWER OF LOCAL IMPORTERS..................................................................................................................... 187.4 COMPETITION................................................................................................................................................................... 187.5 THE ROLES OF THE INFRASTRUCTURE DEVELOPMENT COMPANY LIMITED (IDCOL) AND THE

INFRASTRUCTURE INVESTMENT FACILITATION CENTRE (IIFC) IN PROMOTING INVESTMENT IN THE ENERGY

SECTOR.................................................................................................................................................................................... 198. MAIN ENERGY SECTOR-RELATED ISSUES........................................................................................................... 20

8.1 ABILITY OF BANGLADESH GOVERNMENT TO SERVICE INVESTMENTS..................................................................... 208.2 EXPORTS OF NATURAL GAS............................................................................................................................................ 218.3 LAND LEASE AGREEMENT............................................................................................................................................. 218.4 FUEL SUPPLY ................................................................................................................................................................... 22

APPENDICES............................................................................................................................................................................ 22Appendix 1: Information Sources about the energy sector in Bangladesh............................................................... 22Appendix 2: List of Key Contacts.................................................................................................................................. 23Appendix 3: List of Foreign Companies Operating in Bangladesh in the Energy Sector ...................................... 24


GLOSSARY OF ABBREVIATIONS

ADB Asian Development Bank

AES A U.S. Power Company

BAPEX Bangladesh Petroleum ExplorationCompany

BGFCL Bangladesh Gas Field Co. Ltd

BGSL Bakhrabad Gas Systems Ltd.

BMPP Barge Mounted Power Plant

BOO Build – Own – Operate

BOT Build – Operate – Transfer

BPC Bangladesh Petroleum Corporation

BPDB Bangladesh Power DevelopmentBoard

CIDA Canadian InternationalDevelopment Agency

CNG Compressed Natural Gas

DESA Dhaka Electricity Supply Authority

DESCO The Dhaka Electric SupplyCompany

DFID UK Department for InternationalDevelopment

FDI Foreign Direct Investment

GDP Gross Domestic Product

GETCO Greenland Engineers and TractorsCo. Limited

GOB Government of Bangladesh

GTCL Gas Transmission Company Ltd.

GTZ Deutsche Gesellschaft fuerTechnische Zusammenarbeit(German Development Agency)

IDA International Development Agency

IDCOL The Infrastructure DevelopmentCompany Limited

IFC International Finance Corporation

IIFC Infrastructure InvestmentFacilitation Centre

IPP Independent Power Producer

JGTDS Jalalabad Gas Transmission andDistribution System Ltd.

kV kiloVolt

kW kiloWatt

kWh kiloWatt-hour

LNG Liquefied Natural Gas

LPG Liquified Petroleum Gas

MEMR Ministry of Energy & MineralResources

MMCFD Million Standard Cubic Feet Per Day

MW Megawatt (one thousand kilowatts)

OC Operating Company (underPetrobangla)

OPIC Overseas Private Investment Corp.

PBS Palli Bidyut Samity (RuralElectrification Co-operative)

PGCB Power Grid Company of Bangladesh

PPA Power Purchase Agreement

PSC Production Sharing Contract

PSIDF Private Sector InfrastructureDevelopment Fund

RAPSS Remote Area Power Supply System

PSIDP Private Sector InfrastructureDevelopment Project

REB Rural Electrification Board

RPC Rural Power Company

RPGCL Rupantarita Prakritik Gas Co. Ltd

SGFCL Sylhet Gas Field Company Ltd.

TCF Trillion Cubic Feet

TGTDCLTitas Gas Transmission andDistribution Company Ltd.

USGS United States Geological Survey

USPC United Summit Power Company


LIST OF FIGURES AND TABLES

Figure 1.1 Estimate of Capital Flow in the Energy Sector 5

Figure 21 The Gas Network 8

Table 2.1 Some Priority Gas Projects 7

Table 2.2 Power Projects in the Pipeline 10

Table 7.1: Energy Supply Indicators-South Asian Countries 18

Table 8.1 Profile of Private Capital Inflows and outflows in the 19

Gas and Power Sectors


0

100

200

300

400

500

600

700

Ye a r

Estimate of Private Capital Flowin the Energy Sector

GAS POWER

Sourc e : World Bank - FDI in Bangladesh, 1999

1. THE SIZE AND NATURE OF THESECTOR

The energy sector consisting of natural gas, oiland power industries has been by far thelargest recipient of all foreign investment inBangladesh during the past few years.According to an estimate (World Bank 1999),the inflows of FDI into gas and power sectorsof Bangladesh amounted to US$635 millionand US$381 million respectively during theperiod 1994/95 through 1998/99. The totalinflows of FDI into the country were estimated1816 million US dollars for the same period. Inother words, the combined share of gas andpower sectors in total FDI was about 60% forthe mentioned period

The energy sector is also likely to continuereceiving high levels of investment for the nextten years, as the World Bank projections inFigure 1 shows. Until recently, the energysector has been exclusively in the public

domain under the overall control of theMinistry of Energy and Mineral Resources,and administered through sub-sector specificstate owned enterprises.

The American oil companies that are thelargest investors in both the gas and powersub-sectors are very strongly supported by the

Figure 1.1

An Overview

The energy sector in Bangladesh hasbeen the largest recipient of foreigninvestment in the country. Still, with apopulation of 130 million -- almost 100million of whom have no access tocommercial forms of energy like powerand gas -- and with abundant knownreserves of natural gas in the country,there is considerable scope for newforeign direct investment (FDI) in thesector.

What is holding up further FDI and apotentially explosive growth of thesector is the Government’s currentpolicy of not allowing exports of naturalgas to the much larger market inneighbouring India. However, it iswidely believed that this may change ifthe impending general election,expected before October, 2001, resultsin a stronger government with asignificant majority in the Parliament.There is somewhat less oppositioncurrently to the export of powerproduced from natural gas, but the long-term commitment that is necessary forthis to happen is still not there.

With projected GDP growth in excess of6% per year, the domestic energymarket is also likely to grow at a fastrate in the long run.

Concerns about environmentalpollution, particularly in the Dhaka area,may eventually force the Government totake some important policy decisionsfavouring greater use of compressednatural gas (CNG), as has been recentlydone in New Delhi. This, in turn, willcreate significant investmentopportunities for European SMEs.

Potential investors must be aware thatthe government bureaucracy normallyworks at a slow pace in the country(often by design aimed at extractingunofficial premiums). The impendingelection has now caused a virtualstandstill in any bureaucratic decisionmaking, and the situation is not likely tochange before the New Year. Most of thecurrent projects listed later in this reportare affected by this lull. So, potentialinvestors must not be in too much of ahurry to realize the benefits of theirinvestments.


American-Bangladesh Chamber of Commerce,which represents some of the world's largestenergy companies and contractors. TheChamber has been able to generateconsiderable political support in the UnitedStates for the positions of their members,culminating in an official visit by PresidentClinton to Bangladesh, and visits by seniormembers of the Clinton administration tolobby for the export of Bangladeshi gas toIndia.

While European investors are not able tomuster the same level of government supportas American and Japanese investors, they havestill been able to achieve considerable successon their own, with a Shell/Cairn Energy jointventure being a major player in gas explorationand development. There are also a significantnumber of smaller firms investing inspecialised niche areas to support gasexploration and development, and powergeneration.

2. REVIEW OF PRINCIPALENERGY SUB-SECTORS

2.1 Gas Sub-SectorBangladesh has abundant proven reserves ofnatural gas, estimated in 2000 at rangingbetween 15 and 45 trillion cubic feet (TCF).Discovered reserves reached 19 TCF in 2000,after the discovery by the Unocal Corporationof a new reserve containing 6 TCF1. Thesewide differences are mainly the result of the

1 However, according to a report by the US Geographical Survey that

was quoted in volume 5, issue #16 of “Alexander's Gas & OilConnections” on 4 September 2000, Bangladesh has natural gasreserves of 33 TCF, both on land and offshore in the Bay of Bengal,and a potential natural gas reserve of over 45 TCF.

limited amount of seismic and drilling workthat has been carried out to date.

Currently Petrobangla and two foreign oilcompanies, namely Shell/Cairn Energy andUnocal from the United States, are producingan average of 1,000 MMCFD from 9 gasfields, which supplies some 75% ofBangladesh's commercial energy consumption.Gas production is scheduled to increase furtherto 1,100 MMCFD during 2000.

Until the beginning of the 1990s, Petrobangla,the State Oil Company, together with its eightoperating companies, maintained an exclusivemonopoly position in the oil and gas sector,with two national gas production companies,the Bangladesh Gas Field Company Ltd(BGFCL) and the Sylhet Gas Field CompanyLtd. (SGFCL) responsible for gas production.In 1994, Petrobangla set up explorationcontracts with four foreign oil companies,which included Cairn Energy from the UnitedKingdom and Occidental Petroleum,Rexwood-Okland and the United MeridianCompany from the United States. By 1997, sixProduction Sharing Contracts (PSCs) had beensigned for eight blocks by the four operators,

With a daily current production of1,000 million cubic feet per day(MMCFD), and prospects for furthergas discoveries, the energy sector inBangladesh continues to remain by farthe biggest sector of interest forforeign investors, in terms ofexploration, production, support anddownstream activities.

Proven gas reserves are located innine producing fields, two suspendedfields and nine non-producing fields,total 15 Trillion Cubic Feet (TCF)according to Petrobangla, the stateowned oil and gas company.

The Petroleum Policy of July 1993 hassought to encourage foreign oilcompanies to invest in gas explorationin Bangladesh, with Petrobanglaregulating the activities of foreigncompanies under Production SharingContracts (PSC), and acting as thesole purchaser of any gas produced byforeign operators


leading to the first offshore gas production in1998 from the Sangu Gas Field by CairnEnergy which is now supplying the Chittagongmarket, followed by the joint development ofthe Jalalabad field by Unocal and OccidentalOil of the United States, which startedproduction in the first quarter of 1999. In thepast year Occidental Oil have sold theirinterests in Bangladesh to Unocal and so havewithdrawn from the Bangladesh market. InJuly 1997, a Second Bidding Round attracted20 oil and gas companies from 11 countries.However, it then took one full year ofdeliberation before any exploration rights wereawarded to Enron/Okland, Pangea/OMV,Unocal and Shell/Cairn Energy. However by2000, only Enron had signed to the productionsharing. Subsequently OMV has withdrawnentirely from Bangladesh.

The remaining 12 onshore and 3 offshoreblocks were then offered to internationalcompanies, with Tullow Oil Plc, an Irish oiland gas exploration and production companybeing awarded two exploration blocks. Initiallythe company tried unsuccessfully for threeyears to finalise the production service contractbefore going into partnership with Chevronand Texaco. Then in February 2000, theTullow Oil, Chevron and Texaco consortiumreceived permission to drill three exploratorywells in Block 9. Although the permission todrill was received in February, it was stillnecessary to negotiate the production sharingcontract, which again is another timeconsuming effort, but was expected to beconcluded at the time of the visit toWashington of Prime Minister Sheikh Hasina.

Some specific priority projects in the gas sub-sector that were being developed during 2000and which were identified during the workprogramme in Bangladesh are presented in theadjacent Table 2.1

Table 2.1

Some Priority Gas ProjectsPROJECT DESCRIPTION

Rashid-pur-Ashu-gonj gastrans-missionpipelineproject

Construction of an 82 km gastransmission pipeline to be funded byPetrobangla, with provision for twobackup manifold stations. Thegovernment would like to have theproject implemented before June 2001,with a further 57 km extension by June2002.

Nalka-Ishwardigas trans-missionpipeline

Construction of an 85 km gastransmission pipeline to be funded byPetrobangla, intended to beimplemented by December 2001, inorder to facilitate the gas supply to newplanned industries in the Ishwardiexport processing zone and the powerplants at Ishwardi-Bheramara.

Ashu-gonj-Dhanuagas trans-missionpipelineproject

Construction of a 53 km gastransmission pipeline with provision formanifold stations at Monohardi andDhanua, that is intended to beimplemented by June 2003, withpossible funding by the AsianDevelopment Bank and Petrobangla.

Dhanua-Joydeb-purpipelineproject

In order to give additional flexibility tothe supply of gas to Dhaka City, a 30km spur pipeline from Dhanua-Joydebpur (or any suitable location onthe out cut of Dhaka City) may beconstructed by June 2003, with fundingbeing requested from the AsianDevelopment Bank and/or Petrobangla.

Dhaka Cityring main

In order to maintain a stable pressurethroughout the City of Dhaka, a new 80km city mains ring will connect city gatestations at Demra and Joydevpur aswell as other locations, and is intendedto be developed by June 2005.

250 km 20-24"pipelineprojectunder J.VorBOT/BOObasis

Bangladesh Petroleum Corporation(BPC) plan to install on either a joinventure or BOT/BOO basis, a 250 kmmulti-product pipeline from Chittagongto Dhaka. The pipeline will transport arange of products, which include:diesel, petrol, octane, kerosene,lubricant etc. It is intended that thepipeline will be built to run parallel to anexisting natural gas pipeline betweenDhaka and Chittagong.

Bakhra-bad gasfield

A number of priority projects forenhanced gas recovery from bothmarginal fields and fast depleting fields,including the Bakhrabad gas field, areunder consideration by a number of gascompanies. Following a threedimensional seismic survey, a work-over drilling programme will be taken,after which the BGFCL intends to installa power plant.


The following sketch map gives the gas network (planned ones are dotted). Figure 2.1


2.2. Power Sub-Sector

The Government of Bangladesh [through theMinistry of Energy and Mineral Resources(MEMR)] bears overall responsibility for thepower sub-sector in Bangladesh.

Consumption of commercial energy per headin Bangladesh is one of the lowest in Asia, ifnot the world. A lack of commercially pricedsources of electricity has been a major factor in

deterring foreign investment hindering GDPgrowth. Per-capita generation of electricitywas 110 kWh in 1997/98, according toBangladesh Economic Survey, Ministry ofFinance (2000). With about 22% of householdsreceiving electricity, most commercial energyis consumed by industrial and residentialcustomers.

Frequent power failures due to inadequatemaintenance continue to disrupt industrialproduction, water supplies and irrigation. In2000, the currently installed capacity of publicpower plants as listed by the World Bank, is3,300 MW, though actual daily generatingcapacity is often reduced to 2,400 MW, againsta total daily demand of 2,675 MW to 2,725MW. This usually results in extensive load

shedding, which has now become a factor ofdaily life in Dhaka. The situation is worse

outside the capital city. In 1999, there weresome recorded 1,690 hours of load shedding.

There is considerable foreign investor interestin the power sector. Contracts for four bargemounted power plants (BMPPs) with a totalcapacity of 470MW have already been signedand several other contracts are in the pipeline.A total of US$750 million of FDI in this sectoris expected in the next three years, reflecting

principally the external financing of importedpower plants and auxiliary equipment.

The estimated capital requirement for thepower sector during the next five years is$5-6 billion . [Source: MEMR]

Since the Government of Bangladeshcannot finance the power system'sexpansion and development programmesfrom their own resources, they are nowseeking multilateral and bilateralassistance, as well as private sectorinvestments for adequate and sustainabledevelopment of the power sector.

The Power Development Board'sMaster Plan stipulates raising presentgeneration capacity from 2900 MW to10,000 MW by 2015. As part of theplan, about 2000 MW of powergeneration capacity is expected to beadded by 2005 at a cost of $1.2 billionthrough foreign investment byIndependent Power Producers (IPPs).

Areas of Power Sector BusinessOpportunities for European SMEs

• New independent power projects in the private sector that are being sought on both BOO/BOT basis;

• Rehabilitation, maintenance and up-grading of a number of existing publicsector power generating plants;

• Maintaining and expanding existingpower transmission systems;

• Supply of mini-power generation plantsto private sector industry, particularly inareas that lack transmission networks;

• Technology transfer throughmanufacturing/assembly of powerequipment;

• Commercialisation of state owned powertransmission and distribution agencies.

• Services to support the aboveopportunities.

• Privately owned Remote Area PowerSupply Systems (RAPSS).


At the suggestion of the InfrastructureInvestment Facilitation Center (IIFC)2, theGovernment has recently agreed to licenseprivately owned remote area power supply

Table 2.2Power Projects in the Pipeline

Name ofproject Status of the project

Dhakaarea Two100-MWgasturbinepowerplantproject.

Five consulting firms, each in a jointventure with a local Bangladeshifirm, have submitted proposals toconduct the feasibility study, andthen prepare tender documents fortwo 100 MW power plants. BPDBwill begin the tendering processafterwards.

Chandpur100MWpeakingpowerplant

BPDB has already completed thefeasibility study and selected a siteadjacent to the existing gridsubstation, and after necessaryapproval from the board regardingsite selection, BPDB will preparethe tender documents and issue acall for the tender.

Fenchugomj 90 MWcombinedcyclepowerstation.(Phase II)

BPDB is preparing the tenderdocument for a 90 MW combinedcycle power station, containing 2gas turbines and a steam turbineplant, to be added to an existing 90MW combined cycle power plant atFenchugonJ. The existing plant wasbuilt by the Sumitomo Corporationfrom Japan, with equipment byHitachi, also from Japan.

210 MW-steampowerplant atKhulna

BPDB is preparing the tenderdocuments for an additional 210MW steam power plant to be addedto the existing 60 MW & 110 MWsteam power plants at Khulna whichwere manufactured by SkodaExport from the Czech Republic.

Bheramara 450 MWcombinedcyclepowerplantproject

BPDB has completed the projectproforma for the above mentionedproject and after getting approvalfrom the Ministry, will appoint aconsultant to prepare the tenderdocuments, and so allow them torelease for the tender.

2 A GOB entity set up in 1999 (with initial funding from the World Bank ,

CIDA, and DFID) to promote and facilitate private sector investments ininfrastructure sectors

systems (RAPSS) in rural areas. These mayprovide very good investment opportunities forEuropean SMEs in foreseeable future. Somespecific power projects that were beingdeveloped during 2000 are summarised inTable 2.2.

Transmission Projects

A number of projects are being funded toupgrade the highly inadequate transmissionsystem in Bangladesh. These include new sub-stations, extension of existing sub-stations, andnew transmission lines across the country.

The Power Grid Company of Bangladesh(PGCB) was created mainly to take overmanagement and development of transmissionnetwork throughout the country, but in realityit only has a small transmission corridor underits control so far. PGCB had hoped toimplement the first three of the followingprojects during 2000, with financing providedby the Asian Development Bank:

1. A new sub-station at Aminbazar, with abudget of US$ 16 million, to be completedwithin a time frame of three months;

2. Sub-station extension project at Hasnabad& Tongi, with a budget of US$ 12 millionand to be completed within a time frame ofthree months;

3. A 60 KM transmission line runningbetween Hasnabad, Aminbazar and Tongi,to be completed within a time frame ofthree months.

4. 367Km – Ishwardi-Bogra-Barapukuria230KV transmission line to beimplemented by 2001.

5. 100Km Tangail-Modhupur-Jamallpur132KV single ckt line to be implementedby 2001.

6. 88 Km Dohazari – Cox’s Bazar 132KVsecond ckt second string to be implementedby 2001.

Future power generation projects ofBPDB include 40 MW gas turbineplant at Gazipur. 450 MW combinedcycle plant at Serajganj, 220 MWthermal power station at Khulna and50 MW thermal power station no. 2 atSikalbaha which are expected to becommissioned by 2005.


Bangladesh Power Development Board(BPDB) Projects

During 2000, BPDB had plans to tender for theconstruction of two new electricity sub-stationsat Satkhira and Gopalgonj and for theconstruction of two new transmission linesbetween Khulna and Satkhira and betweenMadaripur and Gopalgonj.

Dhaka Electricity Supply Authority (DESA)Projects

DESA plans to seek offers during 2000 for theconstruction of two new sub-stations atKamrangirchar and Tongi, and for theextension of two existing sub-stations atBhulta and Palash.

2.3 Oil Sub-sector

The oil sub-sector in Bangladesh is negligiblein comparison with other Asian countries, withproven reserves of only 5.69 million barrelsand a production of 2,900 barrels per day,according to an Oil & Gas Journal'sWorldwide Survey in December 1999.

Up until the 1990s, Petrobangla, the Stateowned oil company, together with its eightoperating companies maintained an exclusivemonopoly position in the oil and gas sector. Inrecent years, the Government has sought toencourage foreign oil companies to invest inoil exploration in Bangladesh through privatesector participation, with Petrobanglaregulating the activities of foreign companiesunder Production Sharing Contracts, andacting as the sole purchaser of oil and gas fromthe companies. Currently Shell, Texaco, CairnEnergy, Holland Sea Search, Unocal,Rexwood-Okland and UMC BangladeshCorporation are active in exploration under sixProduction Sharing Contracts (PSC)partnerships with Petrobangla, though up tonow, oil exploration has not been successful.

3. LIST OF MAJOR LOCAL COMPANIESAND REVIEW OF THEIR EXISTINGCOLLABORATIONS WITH FOREIGNFIRMS

3.1 Gas Sub-Sector

The Petrobangla Group employs in excess of8,000 employees, with some 600 employed byPetrobangla itself and the rest spread over theeight operating companies. Exploration anddrilling activities are managed by onecompany, Bangladesh Petroleum ExplorationCompany (BAPEX). Two national companies,the Bangladesh Gas Field Company (BGFCL),employing 900 people and the Sylhet GasFields Comapny (SGFCL), employing 400people, manage gas development andproduction activities.

The transmission, distribution and marketingof natural gas in Bangladesh is managed bythree franchised operating companies of thePetrobangla Group, namely: Titas GasTransmission and Distribution Company(TGTDCL), employing 2,500 people;Bakhrabad Gas Systems Ltd (BGSL),employing 1,400 people and Jalalabad GasTransmission and Distribution System Ltd.(JGTDSL), employing 600 people. A fourthcompany, the Gas Transmission Company Ltd.(GTCL), incorporated in 1993 will eventuallybe responsible for the high-pressure nationaltrunk system. GTCL, with 100 employees, wasset up as a common carrier and is permitted toform joint ventures with private sector partnersto facilitate equal pipeline access by privategas producers. However, due to thebureaucracy and long delays in the transfer ofassets by the three Transmission andDistribution companies, GTCL currently onlyoperates less than 20% of the high-pressuretrunk network.


Natural gas, liquids and liquefied petroleumgas (LPG) are products handled by theRupantarita Prakritik Gas Company (RPGCL).With 100 employees, it was set up in 1991 forthe transportation and fractionation of naturalliquid gas, as well as the distribution ofcompressed natural gas. Petrobangla hasrecently set up a new operating company tooperate the Barapukuria coal mine, which isunder development by a Chinese consortium,with a full production of one million tons peryear scheduled to commence in 2002.

3.2 Power Sub-Sector

There are three main operating entities in thissector. The Bangladesh Power DevelopmentBoard (BPDB), was until recently the solepublic sector power generator in Bangladesh. Itis also responsible for transmission anddistribution of electricity outside Dhaka and insome of the rural areas, as well as forgeneration and transmission planning. It is anintegrated utility that distributes electricitydirectly to retail consumers, owning some3,091 MW of generating capacity. At presentBPDB owns the majority of the transmissionnetwork, and is responsible for distributingabout 42% of the total capacity sold inBangladesh.

The Dhaka Electricity Supply Authority(DESA) is responsible for transmission anddistribution of electricity in and around Dhaka,which is the largest load centre in Bangladesh,consuming about 41% of all electricity sold.

The Rural Electrification Board (REB), whichwas established in 1977, distributes electricityin rural areas through 67 operating Palli BidyutSamities (PBSs), or consumer-owned co-operatives. REB's mandate is to electrify ruralareas. The rural electrification has beenextended to 61 of the country’s 64 districts(excluding the three hill districts), but not tothe remote islands.

BPDB, DESA and REB are all controlled byMEMR (Power Division), including the awardof contracts over specified limits, namely US$2.1 million for BPDB and DESA and US$1million for REB.

The Bangladesh Government also created twonew companies in November 1996, namely thePower Grid Company of Bangladesh and theDhaka Electric Supply Company (DESCO),with the intention of handing over all of thetransmission assets of both BPDB and DESAto PGCB, and the distribution system fromDESA to DESCO. Both companies are fullyowned by the Bangladesh Government throughshares held on their behalf by ex-officiomembers of BPDB and DESA respectively.

The Rural Power Company (RPC), a publiclimited company, has been formed to generateelectricity under the sponsorship of REB and afew large PBSs.

Since the mid 1990's, a number ofinternational foreign developers havepresented several unsolicitedproposals for private sector powerplants to meet the growing powershortages. Following this, the PowerCell of the MEMR was set up to act asa single window for the solicitationand evaluation of proposals on thebasis of competitive bidding.

The Bangladesh Government hassigned three PPA with private sectorbarge-mounted power companies allof which are now producing power.During February 1999, US companiessigned contracts with the Governmentfor two combined cycle powerprojects (360 MW in Haripur and 450MW in Meghnaghat). A U.K. basedsubsidiary of the American CompanyCinergy signed a letter of intent withthe Government to build a 100 MWbarge-mounted power plant (BMPP) inBaghabari.


4. FORMS OF CO-OPERATION

4.1 Gas Sub-Sector

The main form of collaboration in the gassector is the requirement that all private sectorparticipation be by way of a production-sharing contract (PSC) with Petrobangla.

Under the PSC system, all of the costs ofexploration, development and production arepaid by the contractor but are fully recovered,if sufficient gas is discovered. Hence underPSCs, the private producer cannot sell directlyto the customer or to other private producers,but only to Petrobangla who are required tobuy all the gas produced, with one exception.

According to the PSC, the Contractor has theright to export gas in the form of LNG, withthe only limitation being that Petrobangla canclaim up to 20% for the first 10 years and up to30% thereafter. But if the Contractor choosesto sell its share of the gas domestically,Petrobangla is bound to buy their full shareregardless whether it can access supply fromany source.

However, oil and gas exploration andproduction programmes require considerablesupport services for their implementation.There are a large number of oil service

industry support firms that are involved in theoil and gas industry in Bangladesh thatnormally work under sub-contract to the maincontractors. Hence, in general, the majorinvestment opportunities for smaller andmedium sized companies in the gas sector inBangladesh, are mostly in providing supportservices for exploration, production andtransmission of gas. In this way, cash flow tothese smaller companies is usually guaranteedby the main operator and not the Governmentof Bangladesh.

In April 2000, the government awarded block7, which is located in South West Bangladeshto Unocal Bangladesh Limited, as a jointventure with the Bangladesh PetroleumExploration Company Limited (BAPEX). Theagreement gives Unocal five years forexploratory drilling, as opposed to the standardthree years in most other PSCs.

Under this contract, Unocal became the firstamong the 22 companies that took part in thesecond round bidding in 1997, to have beenawarded a production sharing contract. It wasalso the first time that BAPEX has formed analliance with an international gas explorationcompany.


As part of the private sector power generation policyof Bangladesh, the Bangladesh Government solicitsproposals from independent power producers (IPPs),to develop facilities to generate power and then sellthe power generated to a local power distributorunder a Power Purchasing Agreement (PPA) and bepaid in hard currency. These independent powergenerating facilities, which would increase electricitysupply and reduce Bangladesh's power shortages,would be built on a build, operate and transfer (BOT)basis over a 15 year concession period. However,development of these facilities also requires the IPPnot only to develop a power purchasing agreement,but first to secure an implementation agreement in

Under the PSC model, theGovernment of Bangladesh andPetrobangla enter into a contractualrelationship with a contractor for theexploration, development andproduction of oil or gas. The title ofthe assets and the oil or gas remainwith the government and in exchangefor the capital resources invested inthe exploration, development andproduction, the contractor obtains ashare of the volume of the gasproduced at an agreed price in orderto cover both costs and profits. Thecontractor then recovers its costs byselling the gas to Petrobangla orthrough a Liquefied Natural Gas (LNG)export project.


order to ensure a continuous fuel supply, a fuel supplyagreement and possibly the most difficult, a landpurchase or lease agreement. Many potentialinvestors are believed to have withdrawn not only onaccount of the bureaucratic delays encountered, butmostly on the difficulty in securing the vast array ofagreements needed.

It was noted that the developers of the first barge-mounted power plant were able to joint venture witha local firm who was already involved in fueldistribution, thereby removing much of thecomplication of a fuel supply contract.

One local company that has been particularly activein developing all types of business collaborationswith foreign firms in all aspects of the energy sector,both in oil and gas, was the Cosmos Group, whoseown customers include all of the major state oil, gasand power companies in Bangladesh. They also actas representatives of a number of foreign firms andalso seek selected partners for specific projects. Twoother private companies named United Summit Co.and Kaltimex are active in power generation.

5. EUROPEAN AND OTHER FOREIGNCOMPANIES PRESENT IN THEENERGY SECTOR

The energy sector in Bangladesh is dominatedby a small number of very large internationalenergy companies, mostly from the UnitedStates, Europe and Japan, with over US$1billion already invested in gas exploration andproduction. The largest investors being CairnEnergy, Shell and Unocal in gas exploration,

and AES Corporation and Marubeni fromJapan in power generation, plus a much largernumber of small to medium sized foreign firmsthat provide specialised support services.Currently there are at least 40 foreigncompanies who are actively involved indevelopment and production in the various oil,gas and power sub-sectors. A list of foreigncompanies operating in the energy sector isgiven in Appendix 3.

During the visit of the Bangladesh PrimeMinister Sheikh Hasina to the United States inOctober 2000, it was claimed by theBangladesh Foreign Ministry that the UnitedStates investment in gas exploration and powergeneration had risen from US$ 20 million in1996 to US$ 800 million in 2000.

5.1 Gas and oil Sub-sectors

In October 2000, only two international oilcompanies had commercial gas fields inproduction, namely Unocal BangladeshLimited, which is producing 100 million cubicfeet per day from its Jalalabad gas field, andthe Shell Cairn Energy joint venture, which isnow producing more than 100 million cubicfeet per day from its offshore Sangu gas fieldin the Bay of Bengal.

Although bids have been submitted by anumber of major oil companies such asChevron, Texaco, Unocal, Mobil Union, TexasPetroleum and others for a number of keyblocks, for which competitive bids werelaunched, to date no new exploration contractshave been awarded. However, Tullow Oil incollaboration with Chevron and Texaco expectto finalise their production sharing contract inOctober 2000.

As mentioned above, although each gas field isoperated by a major international oil company,a large number of medium to large sizedcompanies (supported by foreign oil industry)

It was observed that most of the successfulindependent power producers usuallyconsist of a consortium of variouscomplementary parties, both local andforeign working in joint ventures. Hence,the major opportunities for small tomedium sized companies in the powersector are to approach investments as partof a consortium.


have developed business collaborations with

the field operators. Such companies include:Western Atlas Logging and Schlumberger forline logging, Brown and Root and Halliburtonfor oil field engineering and development,

Mott Macdonald and Momentum Engineeringfor engineering services, Canadian Helicoptersand Bristow Helicopter for transportationservices to remote and offshore sites,Geoservices for geological surveys etc. Hence,the presence of many international operatorssuch as Shell and Unocal has a positivemultiplier effect, since neither firm can operatein Bangladesh without a very wide range ofessential niche support services that arenecessary for gas exploration and production.


The approach taken by NikoResources, a medium sizedCanadian company, should be ofparticular interest to European SMEinvestors, as it demonstrates that ifa joint venture can be developedwith a strong and competent stateowned enterprise, such as BAPEX,and is strongly supported by theirnational government, with access tobilateral institutional investors, thenit would have a good chance ofbeing successful.

Following the merger between MobilOil and Exxon Corporation and theirsubsequent global reorganisation,both companies have decided tocancel two major investmentprojects, abandoning their jointventure plans with MohammadiPetrotrade Private Limited to set upa liquefied petroleum gas (LPG)import terminal at Mongla, and theMobil-Jamuna lubricant plant andimport project in Chittagong.Potential European investors maybenefit from this development.

Status of Private Sector PowerDevelopment in Bangladesh

1. The first private power project, a jointventure of two local companies and theFinnish firm Wartsila NSD (now majorityowned by Coastal Energy), begangenerating electricity from a 110 MW bargeplant in Khulna in September 1998.

2. The second barge-mounted power plantowned by the Malaysian firm, Westmont, isalso generating between 90-100 MW.

3. A third barge project of similar size becamefunctional in June 1999. This project wasjointly developed by 2 U.S. energycompanies Ogden and El Paso incollaboration with Wartsila NSD. It isseeking finance and credit insurance fromthe US export credit agency, OverseasPrivate Investment Corporation (OPIC).

4. The U.S. firm AES, which was the lowestbidder for both Haripur 360 MW andMeghnaghat 450 MW power plants, signedits contract for Haripur in September 1998and Meghnaghat in July 1999, and has 30months from signing to deliver power.

5. During early 1999, the BangladeshGovernment started to negotiate withMarubeni from Japan, for the second phaseof the Meghnaghat power plant, in conflictwith an agreement the government hadmade with the World Bank-led donorsgroup, that they would not negotiate anynew projects with independent powerproducers, other than the 1,330 MWprojects that were already in the pipeline.Despite this agreement Marubeni wasawarded a contract on the basis ofunsolicited negotiations. Initially the donorprotested and took steps to stop thefinancing of Meghnaghat I, but later,following negotiations with the government,the donors agreed to relax the conditionson the understanding that in future thegovernment would follow the conditionsoriginally agree in the "aide memoire".

6. The Government Power Cell signed a letterof intent in September 1998 with the Britishfirm, Cinergy Corp., for a 100 MW project atBaghabari.

7. Meanwhile, a smaller 70 MW plant inMymensingh, with the European GasTurbine from France contracted to supplythe equipment, and Sumitomo from Japan,acting as the main engineering contractor.


6. ANALYSIS OF IMPORT AND EXPORTFLOWS

The Bangladesh Government refuses to allownatural gas to be exported, since thegovernment is afraid of not having sufficientsupply to meet medium term demand, since atits current rate of production, the country hasonly sufficient proven reserves for the next 38years3. However, on account of considerablepressure being exerted by foreign oilcompanies who are only willing to keep oninvesting capital to explore for more gas,providing they can export a part of theirdiscoveries, it is expected that the governmentwill eventually allow exports, particularly toIndia.

However, if exports were to be permitted, itwould take at least five years to create thenecessary infrastructure to make exports toneighbouring countries viable.

7. ANALYSIS OF THE MAIN MARKETS

7.1 Location of energy markets (local,regional and international)

Currently the main market for both gas andpower is the domestic market in Bangladesh.Bangladesh is now producing 1,000 millioncubic feet per day of natural gas, of whichabout 80% is consumed by the power andfertiliser industries, about 10% by otherindustries, 8% by residential consumers 2% byothers.

Currently, power is marketed only within thecountry, though there have been someproposals from India, whereby India wouldinvest in power stations in Bangladesh togenerate power from natural gas fortransmission to India. At a Trade and 3 According to a paper "Bangladesh Natural Gas Exports to India"

published in the Oil & Gas Journal on the 19th June 2000.

Investment Opportunities Seminar held inSingapore on 30 August 2000, the BangladeshiIndustries Minister claimed that Bangladeshwas seeking to attract more independent powerproducers to undertake more than 2,000 MWof new power, which would then enable thegovernment to allow electricity exports toIndia.

7.2 Market trends

7.2.1 Gas Sub-Sector

There is also a very large uncertainty on howgas will be utilised in the medium term, withthe major oil companies wishing to see aportion of the gas exported to neighbouringcountries, particularly India, while thegovernment's energy plan calls for doublingelectricity capacity by 2010 and Petrobanglapreferring to see the gas used domestically toproduce value-added items such as fertilisers,or to see gas turned into liquified natural gas(LNG) that could then be exported by tanker.

In order to provide information that will benecessary to resolve this issue, the UnitedStates Government had sent a US GeologicalSurvey (USGS) team in September 2000 to

While Petrobangla is currently targetinggas production to reach 1,700 to 1,800million cubic feet per day between2003-2005, market trends are moredifficult to predict on account of manydegrees of uncertainty, particularlyregarding the failure of Petrobangla toexpand the country's pipelineinfrastructure and the frequentproblems encountered with gasdelivery to power stations.

Currently all gas production is restrictedto domestic consumption and cannot beexported, until the Government can beassured that Bangladesh has sufficientgas reserves to guarantee gasproduction for 50 years.


map and estimate the gas reserves inBangladesh and report their findings to theBangladesh Government by December 2000.

If this issue is resolved and international oilcompanies are allowed to export gas, Unocalhave publicly claimed that they would beprepared to consider building a US$1.7 billionpipeline from New Delhi, India to Ashuganj inBangladesh to allow the exportation of gas toIndia.

7.2.2 Power Sub-Sector

It is assumed that the market for power inBangladesh will remain solely a domesticmarket, however, predictions of market trendsis not straightforward and so this cannot besaid to be definite. It is also assumed thatpower demand will increase at around 6% peryear for the foreseeable future. However, whiledemand increases each year, generatingcapacity never seems to catch up with it due tonumerous bottlenecks in distribution, systemlosses (that have now reached up to 40%),delays in the construction of new plants.

Nevertheless, some of this uncertainty could beresolved through power sector reform andestablishing a sound regulatory system .

7.3 Role and power of local agents

This was confirmed by companies like CosmosMarketing Consultants or Greenland Engineersand Tractors Co. Limited (GETCO), both ofwhich have over the years developed jointventure relationships with foreign firms, either

on a project by project or a long-term basis,within the energy sector. While bothcompanies are listed in the global directories ofsupport services to the oil and gas industry,

Cosmos is also listed in Europe at the EnergyIndustries Council in London, where theyprovide information concerning new energyprojects in Bangladesh

7.4 Competition

Since the distribution of gas and power areboth in the hands of public sector companies,there is no competition in domestic markets atthis time. If Bangladesh were to export gas,they would likely face considerablecompetition from several neighbouringcountries as well as other countries in theregion, namely, India, Indonesia, Malaysia,Myanmar and Vietnam, all of which haveattracted foreign investment for gasexploration, and where Bangladesh is rankedin the lower half of the group on account oftheir poor economy and only a small toaverage field size on an oil equivalent basis.However Malaysia, Myanmar and Vietnam areranked in the upper half, with Vietnam beingespecially attractive due to its large offshorepotential and large concessions. Table 7.1below lists the energy supply indicators inSouth Asian countries.

However, New Delhi and Eastern India wouldbe a market where Bangladesh could have a

It must be noted that the public sectorstill commands the dominant share ofthe energy sector and that the publicsector procurement in Bangladesh issubstantial. Officials responsible forgovernment procurement in thecountry usually prefer to deal withBangladeshi principals, particularly inthose niche areas that will be of mostinterest to small and medium sizedfirms from Europe. Hence the role oflocal agents may not only be vital, butalso essential.

The role of the local agent ordistributor can be of vital importancefor small to medium sized Europeanenterprises trying to enter theBangladesh market.


competitive advantage, since the indigenousgas fields of India are located primarily inWestern India and the transport infrastructurefrom Bangladesh would be both closer andmore convenient than competing LNG importsfrom the Middle East or domestic sources thatwould have to be piped across the country.

The US Energy Department in October 2000,stated that since it would take at least fiveyears to create adequate infrastructure to pipenatural gas to New Delhi, they believe thatLNG would represent a better option for thepotential export of gas to neighbouring China,India and Pakistan. However if they were to dothis, they would then be in direct competition.

7.5 The Roles of Two New GOB Companies,IDCOL and IIFC

The World Bank funded a Private SectorInfrastructure Development Project (PSIDP),to facilitate private sector infrastructureprojects. The project first created twoinstitutions, the Infrastructure DevelopmentCompany Limited (IDCOL) to administerproject financing on behalf of the government,and the Infrastructure Investment FacilitationCenter (IIFC) to promote and facilitateimplementation of privately sponsoredinfrastructure projects.

Both IDCOL and IIFC were created as GOB-owned companies in 1998. Their first draftbusiness plan included several energy relatedprojects.

IDCOL is already operational and is providingproject financing for three small power plantsin Savar, Comilla and Narshingdi, which arebeing developed by the United Summit PowerCompany (USPC), who have already signedpower purchase agreements with the RuralElectrification Board (REB) to develop thethree 11 MW plants by the end of 2000.USPC, a local independent power producer, isinvesting 30% of the project cost of the threeplants, which is estimated to be US$20 millionfrom their own resources, with the rest comingfrom IDCOL and local banks. The initialfunding for IIFC comes from the Governmentof Bangladesh, IDA, the soft loan wing of theWorld Bank, DFID of the United Kingdomand CIDA of Canada.

IIFC is expected to engage specialised energyconsultants for energy projects. IDCOL, whichis also supported by IDA, offers subordinatedloan finance on concessional terms toinfrastructure companies, to reduce investors'risk, and thus attract private investment. It hasa policy of not lending over 40% of totalproject cost.

Table 7.1: Energy Supply Indicators in South Asian Countries

Fossil Fuel Proved Reserves Fossil Fuel Production, 1998Crude Oil,

1/1/00(Millionbarrels)

Dry NaturalGas, 1/1/00

(Trillioncubic feet)

Coal,12/31/97

(Billion shorttons)

Petroleum(Million

barrels perday)

Dry NaturalGas (Trillioncubic feet)

Coal (Millionshort tons)

ElectricGeneratingCapacity,

1/1/98(Million

kilowatts)

Crude OilRefiningCapacity,

1/1/00 (‘000barrels per

day)

Bangladesh 57 10.6 0 0.002 0.3 0 3.3 33

Bhutan 0 0 0 0 0 0.001 0.3 0

India 4,838 22.9 82.4 0.76 0.8 358.8 100.3 1,858

Maldives 0 0 0 0 0 0 0.03 0

Nepal 0 0 0.002 0 0 0.01 0.3 0

Pakistan 208 21.6 3.2 0.06 0.7 3.5 13.0 143

Sri Lanka 0 0 0 0 0 0 1.6 48

Total 5,103 55.1 85.6 0.82 1.8 362.3 118.8 2,0821 Includes crude oil, natural gas plant liquids, other liquids, and refinery processing gain.

Sources: Crude Oil and Natural Gas Reserves: PennWell Publishing Co., Oil & Gas Journal, 12/28/99. Crude Oil RefiningCapacity: PennWell Publishing Co., Oil & Gas Journal, 12/21/98. All Other Data: Energy Information Administration,International Energy Database, December 1999.


8. MAIN ENERGY SECTOR-RELATEDISSUES

8.1 Ability of Bangladesh Government toservice investments

One of the major concerns of all majorinvestors in the energy sector is the long tomedium term debt-servicing ability of theBangladesh Government to sustain theincreasing foreign exchange payments thatwould be necessary to cover profit repatriation,interest payments and amortisation of private

debt, particularly from a sector that cannotdirectly generate foreign exchange.

This concern was particularly highlighted bythe World Bank study, Foreign DirectInvestment in Bangladesh: Long-runSustainability, which was published in 1999.Table 8.1 below presents the projections fromthat study. It illustrates how the projectedoutflows by 2010 will be so much greater thanprojected capital inflows.

Table 8.1

Profile of Private Capital Inflows and outflows in the Gas and Power Sectors(US$ million)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Inflow Gas 51 134 441 177 246 92 113 110 107 105 133Outflow Gas 111 111 111 111 111 111 158 147 138 131 282Inflow Power 185 245 214 146 203 158 248 200 203 128 90OutflowPower

30 76 114 160 188 141 141 304 343 386 414

Source: World Bank. FDI in Bangladesh: Issues of Long-run Sustainability. 1999

This particular concern was further illustratedduring the middle of 2000, when it wasreported in the Economist Intelligence UnitCountry Report on Bangladesh thatPetrobangla had been accumulating large debtsto foreign oil and gas companies and the reportsuggested that it owed about US$ 72 million toShell and Unocal as outstanding dues for thepurchase of gas from these companies during2000 alone, with some US$ 50 million owed toShell and US$ 22 million to Unocal.

During the visit of the Bangladesh PrimeMinister Sheikh Hasina to the United States inOctober 2000, when the subject was constantlydiscussed in the media, Petrobangla explainedthat these payment delays are the result of non-payment of gas bills by domestic users andstate owned enterprises, claiming they are

owed some Taka 2.5 billion by the BangladeshPower Development Board, Taka 670 millionby the Bangladesh Petroleum Corporation, andthe Bangladesh Chemical IndustriesCorporation also owed a substantial amount. Indefence of breaching their contractualobligations of the production sharing contractssigned with the oil companies, Petrobanglaclaim that the delay of payments is not abreach of contract, since they are payinginterest on payment of arrears.

These payment problems are of particularconcern to medium sized investors, who seethe problems being experienced by largeinternational oil companies to get theirpayment, especially since these oil companiesare able to obtain high levels of nationalsupport, even from the US President.


Similar concern is also felt by the independentpower producers, who sell under powerpurchase agreements to the Bangladesh PowerDevelopment Board (BPDB), when it wasreported that the BPDB was facing liquidationat the end of 1999, when its major distributorand marketing agent Dhaka Electric SupplyAuthority (DESA) failed to make anypayments for a number of months. It wouldappear that DESA had failed to collect arrearsfrom many of its customers, and owes BPDBsome US$ 491 million. Already the oil and gascompanies that supply fuel to the variouspower stations have warned BPDB that fuelsupplies would be cut off, if large unpaid billsare not paid. While this may be a temporarystate of affairs, it is still of great concern,particularly to new potential investors, whohave to make risk assessments of the returnsthey might expect for investing in the energysector and the ability of the BangladeshGovernment to meet their obligations.

8.2 Exports of natural gas

At the rate of production, Bangladesh hasenough recoverable gas to meet consumption

for between 38-40 years. The potentialinvestors are particularly concerned thatPetrobangla's financial resources are notsufficient to absorb any substantial increase ingas purchases and unless they have a hard-currency market for increased production, it isvery hard to justify investment on whichreturns are uncertain.

8.3 Land Lease Agreement

One key issue that had created considerablepublicity during 2000 was the problemsencountered by the AES Corporation in theirnegotiations with the Bangladesh PowerDevelopment Board (BPDB) over thesuitability of the land being offered by theBPDB as part of their agreement to allow AESto build and operate the 450 MW MeghnaghatPower Station. A land lease agreement is anintegral part of the complex negotiations that aforeign independent power producer mustconclude before it can initiate the constructionphase.

However in the case of the Meghnaghat Powerproject, the dispute began in December 1997,when AES declined a site that the BangladeshPower Development Board (BPDB) hadoffered them as part of the land leaseagreement, on the grounds that it had not beenadequately developed, as per their land leaseagreement. However, the BPDB insisted thatAES take possession within 7 days, whichAES refused to do. The dispute then draggedon for some months with AES threatening towithdraw from the project. The dispute wasonly settled with the intervention of the PrimeMinister Sheikh Hasina, who had to dictate asupplementary agreement. However repeateddisagreements between AES and the BPDBmay well have delayed the project for sometwo years.

Because of flood problems and alluvial soil, inBangladesh, selection of the correct site is offundamental importance, and all prospectiveinvestors in new power stations are stronglyadvised to review with extreme caution theland that is offered as part of land lease or landpurchase arrangements in such ventures.

There has been constant pressure onthe Bangladesh Government by thoseforeign oil companies that areinvolved in gas exploration, to allowgas to be exported and morespecifically, exported to India. Thecurrent position of the government isthat exports would only be consideredif Bangladesh had proven reserves tomeet their consumption needs for aminimum of 50 years.


8.4 Fuel Supply

Fuel supply and connectivity is also anotherarea of concern to new independent powerproducers (IPP) wishing to negotiate fuelsupply contracts prior to concluding powersupplies and in the case of natural gas, thepressure at which it is delivered. Since theBPDB have had considerable problems inpaying Petrobangla for fuel purchases, therehave also been a number of supply disruptions.This can be a problem area, where an IPP signsa contract to deliver a certain quantity ofpower at a certain time, but cannot operatetheir generators due to lack of fuel.


APPENDICES

Appendix 1: Information Sources about the energy sector in Bangladesh

Alexander's Oil & Gas Connections is a free news-site for the global gas, oil and gas and powerindustry. The site gives a selection of news, trends and happenings in and around the global energymarkets, including reports about the gas, power and oil industry in Bangladesh www.gasandoil.com/goc

Annual Energy Statistics and Balances of Non-OECD countries. Published annually by OECD, Parisand covers Bangladesh

Bangladesh Energy Report February 2000, published by the US Energy Information Administration,Washington DC and available on Internet at www.eia.doe.gov/emeu/cabs/bangla.html

Bangladesh Natural Gas Exports to India. Oil & Gas Journal. 19 June 2000

Comprehensive Bangladesh gas strategy. Oil & Gas Journal 21 August 2000

Economic Intelligence Unit (EIU) publications: Bangladesh Annual Country Profile and quarterlyreports as well as the Asia Business all cover energy sector in Bangladesh and can be downloaded on afee basis at www.eiu.com

Power in Asia: Financial Times Energy. London. Published every two weeks. £760 per year. Details atwww.ftenergy.com

Private Power Generation Sector Report DTI London July 1998

World Bank: Staff Appraisal Report: Gas Infrastructure Development Project, 7 April 1995

World Bank: Bangladesh Energy Strategy Note 9 November 1998

World Bank 1999. Foreign Direct Investment in Bangladesh: Issues of Long-run Sustainability.October 1999.

World Markets Online provides a fee based online that covers risk assessment service in the energysector in Bangladesh, including both the oil & gas sub-sectors at www.worldmarketsonline.com

A certain amount of the information used in the sector profile originated from an initial search carriedout on the Reuters Online Press Service, which identified a number of press sources for newspaperarticles concerning the energy sector in Bangladesh, where it was noted that a significant amount of theReuters News coverage came from two Bangladeshi newspapers, the Independent, whose quotedarticles were accessed online at http://independent-bangladesh.com/news and the United News ofBangladesh, whose quoted articles could be found at both www.unbd.com and www.dhakacourier.com.The Daily Star, the largest circulation English newspaper in Bangladesh, is available atwww.dailystarnews.com.

http://www.gasandoil.com/goc

http://www.eia.doe.gov/emeu/cabs/bangla.html

http://www.eiu.com/

http://www.ftenergy.com/

http://www.worldmarketsonline.com/

http://independent-bangladesh.com/news

http://www.unbd.com/

http://www.dhakacourier.com/

http://www.dailystarnews.com/


Appendix 2: List of Key Contacts

Ministry of Energy & Mineral Resources(MEMR)Bhaban 6, Bangladesh Secretariat (1st Floor)Dhaka 1000Tel: 880 2 861 3992Fax: 880 2 861 11101/ 880 2 861 5097

Bangladesh Oil, Gas, & Mineral Corp.(Petrobangla)Petrocenter Bhabhan , 3 Kawran Bazar C/A,Dhaka-1000Tel: 880 2 814972, 880 2 814936Fax: 880 2 811613

Bangladesh Petroleum Corporation (BPC)1/D Agrabad C/AChittagongTel: 880 2 235 046/ 880 2 721 064 (Dhaka)Fax: 880 2 891 3375 (Dhaka)

Bangladesh Petroleum ExplorationCompany (BAPEX)Bapex House Building,Finance Corporation BhabanDhaka 1000Tel: 880 2 956 1473Fax: 880 2 956 1473

Bangladesh Power Development BoardWAPDA Building, 48 Motijheel C/ADhaka 1000Tel: 880 2 956 2154, 880 2 956 3532Fax: 880 2 956 4765

Rural Electrification Board (REB),Joarsahara, Khilkhet,Dhaka,Tel: (880-2) 891-6412, 891-6403,Fax: (880-2) 891-6400

Power Grid Co. of Bangladesh LtdHouse No. 1/A (5th flr), Rd. No. 13, Mirpur Rd.,Dhanmondi, R/A,Dhaka 1209Tel: 880 2 812-3225, 812-3226, 812-3228,Fax: (880-2) 812-3227

International Finance Corporation IFCC/o World Bank3A ParibaghDhaka 1000Tel: 880 2 861 1056Fax: 880 2 861 7521Email: [email protected] site: www.ifc.org

The World Bank office in Bangladesh3A Paribagh, G.P.O. Box 97Dhaka-1000, BangladeshTel: (880-2) 9669301-8,Fax: (880-2) 8613220www.worldbank-bangladesh.org

Asian Development Bank2nd Floor BSL Office ComplexSheraton Hotel Annex1, Minto Road, RamnaDhaka 1000Tel: 880 2 933 4017 to 22,Fax: 880 2 933 4012Email [email protected] site: www.adb.org

The Federation of BangladeshChambers of Commerce and IndustryStanding Committee on Oil, Gas and NaturalResources.Biman Bhabban, 4th floor100 Motijheel C/A,Dhaka-1000, BangladeshTel: 880 29563641,Fax: 880-2-9551195E-mail: [email protected] [email protected]

mailto:[email protected]

http://www.ifc.org/

http://www.worldbank-bangladesh.org/


http://www.adb.org/




Appendix 3: List of Foreign Companies Operating in Bangladesh in the Energy Sector

Cairn Energy PLCHouse N° 8, 28 Park RoadBaridhara, Dhaka 1212Tel: 880 2 8829845, 880 2 600680Fax: 880 2 8822592

Unocal Bangladesh Ltd.House N° 12, Road N° 137Gulshan-1Dhaka 1212Tel: 880 2 9885881, 880 2 855983Fax: 880 2 988 4398

Shell Company of BangladeshShell Explorations & Development B.V.IDB Bhaban (9th Floor)E-8A Rokeya SharaniArargaon Dhaka 1207Tel: 880 2 9882954, 880 2 8828194Fax: 880 2 9882947

Maersk Bangladesh LimitedJahangir Tower (93rd Floor)Kawran Bazar, Dhaka 1215Tel: 880 2 8117824, 880 2 811 7847Fax: 880 2 811 2154

Mott MacdonaldHouse # 122, Road # 1, Block # F, Banani,Dhaka-1213Tel: 880 2 882 4026Fax: 880 2 882 3393

Cosmos Energy Services Pvt Ltd.69/1 New Circular Rd. Malibagh,Dhaka-1217BangladeshTel: +880-2-9330859, 411564, 8312024E-mail: cosmos@citechco,netWeb site: http://www.cosmosgroup.net

Deutag BangladeshPlot CES -18, Road N° 123/125Gulshan, DhakaTel: 880 2 98886104, fax: 880 2 988 7060Email: [email protected] site: www.deutag.com

Pangaea PartnersChandrasshila Tower, 5th Floor69/1 Panthapath, Dhaka 1205Tel:: 880 2 867 625, fax:: 880 2 867 624Website:www.pangaeapartners.com/banglipri.htm

Cinergy Global Power/Baghabari Power Co.Ltd54 Park RoadBaridhara Dhaka 1212Tel: 880 2 9881854

Brown & Root Bangladesh Ltd/HalliburtonHouse N° 11, Road N° 7Baridhara, Dhaka 1212Tel: 880 2 873 391 4Fax: 880 2 988 6122

Banamco Energy LimitedConcord Tower, Suite N° 201113 Kazi Nazrul Islam AvenueDhaka 1000Tel: 880 2 933 5063Fax: 880 2 418435

Khulna Power Co. LtdSummit Centre (5th Floor)18 Kawran Bazar C/ADhaka 1215Tel: 880 2 913 2437-8Fax: 880 2 811 7901

Greenland Engineers & Tractors Co. Ltd(GETCO)26 Syamoll, Mirpur RoadDhakaTel: 880 2 812 164/175Fax: 880 2 713319Email: [email protected]

AESIDB Bhaban 5th FloorAgargaon, Shere-e-Bangla NagarDhaka 1207

mailto:cosmos@citechco,net

http://www.cosmosgroup.net/


http://www.deutag.com/

http://www.pangaeapartners.com/banglipri.htm


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