Tk 700 crore deposited in Gas Development Fund

http://www.bssnews.net/newsDetails.php?cat=0&id=144185&date=2010-11-14

Tk 700 crore deposited in Gas Development Fund

DHAKA, Nov 15 (BSS) – A significant amount of money has been deposited in `Gas Development Fund’ to carry out vigorous gas exploration, seismic and well augmentation work by the national gas and oil companies.

The fund was formed as per an order by Bangladesh Energy Regulatory Commission (BERC)) issued on July 13, 2009 to boost up gas exploration work by the national companies.

This is a separate fund for the energy sector from the regular budgetary allocation. The BERC in its order said that the fund must be utilised exclusively for gas sector development that includes exploration, production, transmission and distribution.

“About Taka 700 crore has been deposited in this fund so far. We need a policy guideline to use it by the national companies,” BERC Chairman Yusuf Hossain told BSS today.

BERC is the monitoring authority to oversee the utilization of this fund.

According to the BERC, it imposed a condition on gas price hike application by Petrobnagla as it observed that Petrobangla pays IOC’s (international oil companies) US$ 480 million per year as gas bill. It also observed that the IOC’s gas output surpassed that of the local’s as their combined gas output reached over 52 percent of total gas production although the country has five gas and oil exploration companies.

“We did not like to see a skeleton Petrobangla that gives all its milk to the IOC’s. We want to see that it will take measures to strengthen our own companies to carry out the risky exploration job, so BERC imposed a condition on them when they want to hike gas price”, the BERC chairman said.

Petrobangla in June 2008 applied to the commission for allowing it to increase gas prices by 65 percent at consumer level.

BERC conducted public hearing on it and increased gas price from last month. According to that verdict, Petrobangla increases gas price by 10 to 15 percent and creates this fund from the increased price of gas.

“We are formulating the policy guideline to use the money of this fund for strengthening our own gas exploration companies. Hopefully, we could start our journey very shortly,” Secretary of the Energy Division Mohammad Mejbahuddin told BSS.

Earlier, the energy sector was given Taka 3,500 to 4,000 crore per year from the budget which was very little for this sector to carry out vibrant exploration work or to do intensive seismic job.