Posco Daewoo to invest US$112m in Bangladesh gas field

[DHAKA] South Korea's Posco Daewoo Corp plans to invest up to US$112 million over the next five years to explore for gas in a deep water block in the Bay of Bengal jointly with Petrobangla, official with the two firms said on Wednesday.

Mahbub Sarwar of state-owned energy firm Petrobangla said a two-dimensional seismic survey would begin this year in a block adjacent to an area in neighbouring Myanmar where Posco Daewoo has already found gas. Bangladesh has 26 energy blocks in the Bay of Bengal, 15 of them in deep water.

"We are hopeful to get gas in this block because petroleum structure and geological settings are similar with the Myanmar block," said Posco Daewoo Chief Executive Young Sang Kim, speaking at a deal-signing ceremony.

Bangladesh would get up to 90 per cent of profits from the sale of any oil and condensate retrieved from the block, and up to 85 per cent for natural gas. Posco Daewoo would get a maximum of 70 per cent of the available petroleum annually.

The energy-hungry South Asian country faces a shortage of up to 600 million cubic feet (mmcf) of gas a day. It produces 2,700 mmcf a day.

Posco Daewoo joins the ranks of US company Chevron , Australia's Santos and India's Oil and Natural Gas Corp Videsh Ltd in having energy interests in Bangladesh.

Chevron, however, is looking to exit its gas fields in Bangladesh.

REUTERS