Monday, June 20, 2011

Gas deal with American energy giant sparks protest in Bangladesh

Photo: Ashraful Alom Tito/UNBconnect: Activists protest against gas exploration deal
 SALEEM SAMAD

A CRUCIAL pact between the Bangladesh government and U.S. energy giant ConocoPhillips for deep sea gas exploration has sparked a dispute in the country as activists and allies announced a strike to protest the deal.

The radical activist group the National Committee on Protection of Oil, Gas and Mineral Resources, Power and Ports, with allies of the left-leaning parties, has dubbed the deal as controversial and against the national interest.
Professor Anu Mohammad, general secretary of the national committee, announced on Sunday a country-wide agitation and a six-hour shut down in the capital Dhaka on July 3 and demanded cancelation of the deal.

A professor of economics, Mohammad told reporters that his organization called a country wide shut-down because the agreement with ConocoPhillips endangered Bangladesh's ownership of maritime resources.

Mohammad claimed the provisions of the deal allowed Bangladesh to have only 20 per cent share of the explored hydrocarbon and eventually pave the way for the U.S. company "having a very poor track record" to export the gas abroad despite the energy-starved country.

The strike call came as the main opposition, Bangladesh Nationalist Party, demanded publication of the full text of the agreement so the deal could be studied.

The government, ignoring dissent within the ruling party alliance and protests by experts, on Thursday inked the production-sharing contract (PSC) for gas exploration in the Bay of Bengal despite an ownership dispute over the territory with neighboring India and Myanmar.

ConocoPhillips was chosen to conduct seismic surveys in blocks 10 and 11, an area of nearly 2,000 square miles.

According to the PSC, ConocoPhillips will get 80 to 85 percent of the lifted gas at the cost-recovery stage. The Texas-based company will ensure a bank guarantee of $160 million in the nine-year deal, with a condition to operate surveys and exploration.
The gas, converted into Liquefied Natural Gas (LNG), could be exported if state-owned hydrocarbon corporation Petrobangla is unable to purchase the fuel through laying 174 miles (280 kms) of pipeline away from Chittagong port, the country's energy distribution hub.

Bangladesh will have to lay pipe nearly a mile under the sea in an area regularly visited by tidal surge. Experts argue that laying the pipe, coupled with maintenance costs, will be very expensive for a poor country.

Meanwhile, the Dhaka Chamber of Commerce and Industry, a business, body urged activists to call off the strike. The business leaders reiterated its previous stand on shutdowns, saying such political action aggravates the country's economy, especially the industrialization process for shortages of gas and energy.

Saleem Samad, an Ashoka Fellow is an award winning investigative journalist based in Bangladesh. He specializes in Jihad, forced migration, good governance and politics. He has recently returned from exile after living in Canada for six years. He could be reached at saleemsamad@hotmail.com