Striking an Oil Minefield
Bangladesh has recently discovered oil reserves in two of its northeastern fields. Previously untapped, these oil fields have an extractable reserve worth of $5.5 billion. The two fields, Kailashtila and Sylhet, contain reserves of 137 million barrels of low sulfur crude oil, of which 55 million barrels can be lifted commercially. This discovery comes at a time when the global price of oil is rising due to demand as well as the risk of sanctions on Iran: a chief crude oil exporter to numerous countries.
Bangladesh has fields of low sulfur, or “sweet” crude oil that is highly sought after and is more easily processed into gasoline than high sulfur crude. In 2011, the impoverished country spent $5 billion to import crude and refined oil.
State fuel importer Bangladesh Petroleum (Bapex) made the accidental discovery when it was analyzing 3D seismic surveys in an effort to determine the size of remaining gas reserves in the two fields, which were discovered in 1962 and 1955. A small oil reserve had been found in 1968, but only one million barrels of this were accessible. This is the first oil discovery in Bangla- desh that is economically viable.
The country is expected to drill wells in the next 18 months and collaborate with foreign consultants, since it has never conducted such an extensive oil extraction before.