The country's future energy security received a big blow as the French oil giant Total has declared the two hydrocarbon blocks in Cox's Bazar and Bay of Bengal commercially non-viable for oil and gas explorations, officials said Monday.
The company, after thorough reviewing of its survey results in block nos. 17 & 18, told Petrobangla Monday that the hydrocarbons present in the blocks were not viable for commercial operations.
Country's entire southern region including the energy starved Chittagong region was hoping for a huge discovery from these structures, said a senior Petrobangla official.
The country is already struggling to meet the mounting gas demands across the country with a deficit of gas around 250 million cubic feet a day (mmcfd). Scores of industries remained shut despite investing heavily only due to gas scarcity, industrialists said.
Sharing initial survey results a couple of week back, the French oil giant had informed Petrobangla that it discovered hydrocarbon in these structures and said the aspects of feasibility would be declared later.
"Total told Petrobangla Monday that it would withdraw its exploration rights over the blocks as those were found non-viable," Petrobangla Director for PSC Muqtadir Ali told.
Total has no further intention to proceed with explorations as the blocks covering 18,367 square kilometers are were found nearly barren, said the Petrobangla official.
The company conducted extensive three-dimensional (3D) seismic surveys in the block areas, which also covered parts of the St Martin islands in the Bay, in late last year.
Total and its partners invested over US$30 million in the last two years for surveying these structures.
"Withdrawal of exploration rights by Total and its partners from these blocks means that both these structures would remain open after their exit," Petrobangla director for Production Sharing Contract (PSC) said.
The blocks might be put up in another round of bidding and if any company finds these viable then they would be awarded the contract.
Total's exit from these blocks is the second such incident in the country's energy exploration history.
Last month British company Cairn Energy and its partners relinquished their rights to hunt for oil and gas in the country's onshore block no. 5, that covers greater Khulna district and parts of the world's largest mangrove forest Sundarbans, after seismic results reflected poor reserve.
They relinquished it officially finding the 10,976 square kilometer block 'near barren' after investing US$ 9.5 million in the last three years in exploration activities including 400-line kilometer seismic survey.
In blocks 17 and 18 Total holds a 30 per cent stake including the operatorship.
Irish oil company Tullow has 32 per cent, followed by Thai energy giant PTTEP 30 per cent and US companies Oakland and Rexwood eight per cent stakes in these structures.
State-run energy corporation Petrobangla awarded both the blocks to US joint venture Rexwood-Oakland during the country's first round energy bidding in January 1997, but the companies did not carry out any exploration work due to poor gas demand in the country during that time.
Later Tullow bought majority of the shares from the US companies.
In 2006 Tullow sold its 60 per cent stake to Total, which recently sold half of its stake to the PTTEP.