Note: information contained in this report is the best available as of January 2001 and can change.GENERAL BACKGROUND
Bangladesh is primarily agricultural (around 64% of the labor force and 26% of the Gross Domestic Product -- GDP), although urbanization is proceeding rapidly. This heavy reliance on agriculture makes Bangladesh vulnerable to natural disasters such as cyclones, floods, and droughts, as well as to world commodity prices. Over the past several years, however, Bangladesh has experienced bumper crops and strong growth in the agricultural sector.
Bangladesh has moved increasingly towards a market-oriented economy since the mid-1970s, although the majority of enterprises remain under state control. The government of Prime Minister Sheikh Hasina, elected in June 1996 (for a 5-year term), has indicated that it will continue along a path towards privatization and free market reforms, although progress remains slow for a variety of reasons, including a large budget deficit (around 6% of GDP) and political turmoil. Bangladesh is attempting to diversify its economy away from agriculture, and has made industrial development a priority. Exports are increasing at around 8% annually, in part due to devaluation of the country's currency, the Taka. Currently, cotton textiles and garments account for around 80% of Bangladeshi exports.
Bangladesh is attempting to attract foreign investment, and has established export processing zones (EPZs) in Chittagong (the country's major port) and Dhaka (the capital), with plans for more such zones. Most investment is coming in the natural gas, electricity, and physical infrastructure areas. In June 2000, the official Bangladeshi news agency, BBS, reported that the country's energy sector had attracted $1 billion in foreign investment over the past few years, although other reports have painted the foreign investment picture in Bangladesh in less positive terms.
Bangladesh's real GDP grew at an estimated 5.3% rate in 2000, roughly unchanged from 5.2% growth in 1999. On the positive side, the Bangladeshi economy was relatively unaffected by the Asian economic crisis, in part because Bangladesh has no short-term loans to pay. In July and August 1998, nearly 1,000 people were killed in the country's worst flooding in more than a decade. The flood also resulted in large-scale economic disruption, although Bangladesh received hundreds of millions of dollars in international food assistance for the millions of people who lost crops or homes in the flooding.
On June 23, 1998, Bangladesh opened the $700-million Bangabandhu bridge over the Jamuna River. The bridge connects northwestern Bangladesh to the capital, Dhaka, and will save an estimated $40 million in annual fuel costs. The bridge also is part of a project to supply electricity and natural gas to northwestern Bangladesh, home to 40% of the nation's population. Currently, that region relies heavily on firewood for fuel, although it does contain some electricity generation facilities. In addition, a gas pipeline through the bridge will be the first to connect eastern Bangladesh to the west.In March 2000, President Clinton made the first visit ever by a US President to Bangladesh since its creation in 1971. Among other things, President Clinton offered a multi-million dollar aid package, including money for clean energy projects, energy efficiency, rural electrification, rain forest protection, and greenhouse gas reduction efforts.
Bangladesh (along with Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka) is a member of the South Asian Association for Regional Cooperation (SAARC), created in 1985 to help promote regional economic cooperation, plus economic and social development in general in the South Asian region. SAARC met in November 2000 to discuss a timetable for regional trade agreements.
Bangladesh has small reserves of oil and coal, but potentially very large natural gas resources. Commercial energy consumption is around 69% gas, with the remainder almost entirely oil (plus limited amounts of hydropower and coal). Only around 18% of the population (25% in urban areas and 10% in rural areas) has access to electricity, and per capita commercial energy consumption is among the lowest in the world. Noncommercial energy sources, such as wood, animal wastes, and crop residues, are estimated to account for over half of the country's energy consumption. Consumption of wood for fuel has contributed to deforestation and other environmental problems in Bangladesh. The World Bank has estimated that Bangladesh loses around $1 billion per year due to power outages and unreliable energy supplies.
Bangladesh's Ministry of Energy and Mineral Resources (MEMR) has overall responsibility for the country's energy sector, with policy formulation and investment decisions under its control. Within MEMR, the "Power Cell" acts as a single point of contact to facilitate the electricity reform and restructuring process, such as development of Independent Power Projects (IPPs).
Bangladesh has 1 refinery, a 33,000-bbl/d unit at Chittagong. In December 2000, TotalFinaElf said that it would set up a $16-million plant to bottle liquefied petroleum gas (LPG), in a joint venture with Bangladesh's Premier LP Gas Ltd. LPG is used in Bangladesh mainly for domestic cooking, as well as in some industries and vehicles.
Petrobangla has approximately 20 gas fields nationwide, half of which are active. The main fields include: Bibiyana (recently discovered by Unocal in Sylhet on Block 12, with 5-6 Tcf of reserves, and production potential of 500-750 million cubic feet per day within a few years), Titas (the country's second largest gas field, with 4.1 Tcf of reserves), Habiganj (3.7 Tcf of reserves), Kailashtilla (3.7 Tcf), Rashidpur (2.2 Tcf), Jalalabad (1.5 Tcf), Sangu (1.0 Tcf), nearly all of which are located in the eastern part of the country, plus the Sangu offshore gas field (being developed by Cairn Energy, Shell, and Halliburton) in Block 16 of the Bay of Bengal, 30 miles southwest of Chittagong. Production from Sangu, Bangladesh's first offshore field (with estimated reserves of around 850 Bcf), began in June 1998. Sangu is one of Bangladesh's most important gas discoveries to date, and the first foreign-run gas field. In January 2000, Shell Bangladesh Exploration and Development -- SBED -- along with partners Cairn Energy and HBR Energy reportedly discovered a new gas field near Sangu (South Sangu-1). In August 2000, SBED announced that it had invested $40-$50 million in new offshore gas exploration projects in Bangladesh, including the Sandwip East 1 well in Block 15 (Bay of Bengal). Other possible gas fields include Shaldanadi (estimated reserves of 500-1,000 Bcf), Fenchuganj, Feni, Kumta, and Shahbajpur.
Major foreign energy companies active in gas exploration and development in Bangladesh include Shell, and Unocal, which operates in Bangladesh through its wholly owned subsidiary, Unocal Bangladesh, Ltd. In May 1999, Unocal took over the assets and operations in Bangladesh of Occidental, which had experienced a major explosion and fire at one of its wells in the Sylhet area in 1997. As of June 2000, it appeared that Irish oil and gas exploration and production company Tullow Oil PLC, along with Chevron, had been awarded rights to drill in Block 9 in the northeast Sylhet region. Since then, negotiations have started for PSCs with only two companies, however. Among companies placing bids since the country's second oil and gas licensing round began in 1997 are Cairn and Royal-Dutch Shell on Block 5, and Unocal on Block 7 (in April 2000, Bangladesh signed a PSC with Unocal on Block 7). As of May 2000, Cairn and Shell reportedly were in talks with Unocal on joining forces to develop Blocks 5, 7, and 10. In December 1999, Unocal announced a major gas discovery at the Moulvi Bazar gas field in the Sylhet area, in Block 14. Meanwhile, Tullow's plans for Blocks 17 and 18 reportedly have been set back by disappointing results at the Reju-1 exploratory well.
Besides foreign energy companies, natural gas in Bangladesh is being produced by two subsidiaries of state energy company Petrobangla -- Sylhet Gas Fields Ltd. and Bangladesh Gas Fields Co. Ltd. These two companies produce gas for domestic consumption. More than 80% of gas is consumed for power and fertilizer production, and the remainder by industry and households.Bangladesh's gas demand is expected by some independent analysts to grow by around 6% annually over the next two decades. Potential uses for natural gas in Bangladesh include: petrochemicals, compressed gas for vehicles, power generation, fertilizer, and possibly liquefied natural gas (for export). Bangladesh also contains around 55 million barrels of natural gas liquids (NGLs), which could be used for petrochemicals production or as a cooking fuel to help reduce deforestation and pollution.
A $1-billion Western Region Integrated Project (WRIP) would involve development of the Shahbazpur gas field in Bhola, installation of a 93-mile pipeline to Khulna, and construction of several gas-fired power plants (at Gopalganj, Bhola, Barisal, and Khulna) to serve western Bangladesh. Shahbazpur, discovered by Petrobangla subsidiary Bapex (Bangladesh Petroleum Exploration Company) in 1995, is estimated to contain 330-400 Bcf of recoverable gas. In September 1998, Unocal and Petrobangla initialed a PSC for development of Shahbazpur. Unocal has proposed an integrated, $250-million energy project centered around Shahbazpur, and including a gas pipeline system to serve western Bangladesh, gas-fired power to be built in Bhola, Barisal, and Khulna, and possibly fertilizer and cement plants. Currently, the Bangladeshi gas transmission system experiences bottlenecks and requires expansion to accommodate future supply increases.
In July 1998, Cairn Energy reportedly made a large gas discovery in the Halda valley. Meanwhile, Unocal, along with Petrobangla, is developing the 1.6-Tcf Jalalabad gas field. Output at Jalalabad (Block 13) began on March 22, 1999 at a rate of 100 million cubic feet per day -- Mmcf/d. In early 1997, Unocal acquired 50% interest in Occidental blocks 12, 13, and 14. Unocal also is involved in two PSCs with Petrobangla covering Blocks 12, 13, and 14. In 1998, Occidental-Unocal discovered an estimated 4.-5 Tcf of gas-in-place on Block 12. In late September 1998, Shell and Cairn said they had agreed to an alliance over gas development in Bangladesh (including the Sangu and Semutang fields), plus northeastern India.
In late November 1998, Bangladesh raised the price of gas by 15% as part of an effort to reduce government subsidies as recommended by international lending institutions and countries. Bangladesh has had relatively low gas prices by international standards, with electricity consumers, plus fertilizer plants and households, receiving around $600 million a year in direct subsidies and savings associated with their gas consumption.
The Padma-Jamuna-Meghna river system divides Bangladesh into two zones, East and West. The East contains nearly all of the country's electric generating capacity, while the West, with almost no natural resources, must import power from the East. Electricity interconnection from the East to the West was accomplished in 1982 by a new, 230-kV power line. The vast majority of Bangladesh's electricity consumption takes place in the East, with the entire region west of the Jamuna River accounting for only 22% of the total. Greater Dhaka alone consumes around half of Bangladeshi electricity.
Given Bangladesh's electricity supply shortage, the government decided in October 1996 to issue a "Private Sector Power Generation Policy of Bangladesh." As part of this plan (and also following the Power Systems Master Plan developed by Acres International Ltd. in 1995), the government decided to solicit proposals from international companies for IPPs. This has resulted in solicitations for a number of fast-track barge-mounted plants, plus two large-capacity gas-fired, combined-cycle plants (a 360-MW plant at Haripur and a 450-MW plant at Meghnaghat), and a 100-MW gas-fired plant at Baghabari. These plants are scheduled for commissioning in 2001. The Meghnaghat plant would be Bangladesh's largest single power plant built by a private developer (AES Corporation of Arlington, Virginia), and would be developed on a build-own-operate basis for $280-$300 million. Other plants presently under construction include a 210-MW plant at Ghorasal and a similar plant at Siddirganj. Also planned is rehabilitation of the 110-MW Khulna steam plant (during 1999), the 60-MW Shajibaza combustion turbine plant (during 2000), the Barapukaria Coal power plant (in 2001), and the Haripur combustion turbine conversion to combined cycle (in 2002). Meanwhile, in April 1998, Bangladesh adopted a "Small Power Generation Policy," and the country also has an aggressive Rural Electrification program. All of these initiatives aim to increase power generation and to reduce the country's power shortage significantly in coming years, with a goal of achieving universal electrification by 2020. Power shortages can have serious social consequences, as demonstrated on April 10, 1999, when violent clashes took place in Dhaka between police and people protesting inadequate power supplies and demanding better service.
Through MEMR, the Bangladeshi government owns and supervises the Bangladesh Power Development Board (BPDB). BPDB is an integrated utility distributing electricity directly to retail consumers, as well as to two other distribution utilities -- the Dhaka Electric Supply Authority (DESA, established in 1991), and the Rural Electrification Board (REB, established in 1977). The Asian Development Bank (ADB) has agreed to provide $140 million to upgrade DESA's power supply system in Dhaka, and to construct a 450-MW power plant in Dhaka. This is to be the first competitively bid and privately-funded power project in Bangladesh, and will consist of a combined-cycle, gas-fired station to be built and run by AES Corporation, with commercial operation scheduled for 2003. A Chinese company also reportedly has agreed to provide DESA with $60 million in credits for the Dhaka power distribution upgrade. In October 2000, the US Export-Import Bank approved $8 million in loans to build three, 11-MW power plants in Bangladesh.
Bangladesh has several barge-mounted power stations under construction. The 120-MW Haripur Cogeneration plant has been delayed, while Westont Power's 130-MW, $37-million Baghabari project began delivering power to BPDB in July 1999. A $103-million, 110-MW, fuel-oil-fired power plant at Khulna, built on two barges, was commissioned in October 1998 and is being operated by Wartsila NSD of Finland in a joint venture with two local companies (plus financing from the International Finance Corporation). Power from the plant supplies western Bangladesh.
Occidental, in cooperation with the Indian National Thermal Power Corp., has proposed building a new 1,000-MW gas-fired power plant (with possible expansion up to 2,000 MW), to be supplied from the Bibiyana gas field located in the Sylhet region of northeastern Bangladesh. Occidental believes that Bibiyana could supply enough gas for a 2,000-MW plant for 20 years. Meanwhile, two power plants in the port city of Chittagong are to be supplied from the Sangu gas field in the Bay of Bengal.
In another development, AES Corp. has agreed to build the 450-MW Meghnaghat gas-fired plant for the BPDB. The plant is to be built on the Meghna River, about 3 miles from the 360-MW Haripur plant which AES also is developing. Completion of the Meghnaghat plant is expected in 2000, and power is to be sold to BPDB under a 22-year power purchase agreement.
In early December 1998, Prime Minister Hasina announced that discussions were underway among Southern Asian (SAARC) nations for development of a regional electricity grid. Such a grid could lead to increased efficiencies and reduced power generation and transmission costs. Nepal and Bhutan have substantial untapped hydroelectricity potential. This power could be consumed in those two countries and also exported to India, Pakistan, and Bangladesh. In March 1999, it was reported that India's Power Grid Corporation had completed a feasibility study on possible exchange of 150 MW of power between Bangladesh and India. Interconnection points would be Ishwardi, Bangladesh-Farakka, India and Shahjibazar, Bangladesh-Kurnarghat, India.
In November 2000, the United States and Bangladesh signed an agreement for cooperation on the peaceful use of nuclear power. Under the agreement, Bangladesh is to receive technical assistance for its planned Rooppur nuclear plant. Bangladesh is a signatory to the Nuclear Non-Proliferation Treaty, and ratified the Comprehensive Test Ban Treaty in March 2000.
President: Shahabuddin Ahmed (since 9 October 1996)
Prime Minister: Sheikh Hasina Wajed (since 23 June 1996, next elections scheduled for July 2001)
Independence: December 16, 1971 (from Pakistan)
Population (2000E): 130 million
Location/Size: Southern Asia, bordering Bay of Bengal, between India and Burma/55,813 square miles (about the size of Wisconsin)
Major Cities: Dhaka (capital -- population, 10 million), Chittagong (2.8 million), Khulna (1.8 million), Rajshahi (1 million)
Languages: Bangla (official, also known as Bengali), English
Ethnic Groups: Bengali (98%), tribal groups, non-Bengali Muslims
Religions: Muslim (88%), Hindu (11%), Christian, Buddhist, others (1%)
Defense (8/98): Total manpower 121,000 (Army 101,000; Navy 10,500; Air Force 9,500); Paramilitary (49,700)
Finance Minister: Shah AMS Kibria
Currency: Taka (Tk)
Market Exchange Rate (1/17/01): US$1 = 54.35 Tk
Gross Domestic Product (GDP) (2000E, market exchange rates): $38.3 billion
Per Capita GDP (1999E, Purchasing Power Parity exchange rates): $1,470
Real GDP Growth Rate (2000E): 5.3% (2001E): 5.2%
Inflation Rate (consumer prices) (1999E): 6.3%
Unemployment Rate (1997E): 27%
Current Account Balance (1998E): -$1.34 billion
Merchandise Exports (1999/2000E): $5.7 billion
Merchandise Imports (1999/2000E): $8.4 billion
Merchandise Trade Balance (1999/2000E): -$2.7 billion
Major Trading Partners (1999): United States, India, China, Japan, United Kingdom, Germany, France
Major Export Products: Garments and knitwear, frozen fish, jute and jute goods, leather and leather products, tea, urea fertilizer, ceramic tableware
Major Import Products: Capital goods, foodgrains, petroleum, textiles, chemicals, vegetable oils
International Reserves (12/00E): $1.5 billion
Total Foreign Debt (1999/2000E): $15.8 billion
State Minister for Energy and Mineral Resources: Prof. Rafiqul Islam
Proven Oil Reserves (1/1/01E): 56.9 million barrels
Oil Production (2000E): 1,600 bbl/d, of which 1,400 bbl/d was crude oil
Oil Consumption (2000E): 60,000 bbl/d
Net Oil Imports (2000E): 58,400 bbl/d
Crude Oil Refining Capacity (1/1/01E): 33,000 bbl/d
Natural Gas Reserves (1/1/01E): 10.6 trillion cubic feet (Tcf) (estimates range as high as 80 Tcf, with other estimates in the 30-50 Tcf range)
Natural Gas Production/Consumption (1999E): 319.6 billion cubic feet (Bcf)
Coal Reserves (1998E): None
Electric Generation Capacity (1/1/99E): 3.3 gigawatts (with only around 2.4 gigawatts considered "available")
Electricity Production (1999E): 12.1 billion kilowatthours (87% natural gas, 6% oil, 6.3% hydro)
Percentage of Population with access to Electricity (1998E): 14%
* The total energy consumption
statistic includes petroleum, dry natural gas, coal, net hydro, nuclear,
geothermal, solar and wind electric power. The renewable energy consumption
statistic is based on International Energy Agency (IEA) data and includes
hydropower, solar, wind, tide, geothermal, solid biomass and animal products,
biomass gas and liquids, industrial and municipal wastes. Sectoral shares of
energy consumption and carbon emissions are also based on IEA data.
**GDP based on EIA International Energy Annual 1998
OIL AND GAS INDUSTRIES
Organizations: Bangladesh Oil, Gas, and Minerals Corp. (also known as Petrobangla), formed in 1974, is the state company responsible for oil and gas exploration, production, and distribution. Petrobangla also is involved in exploration and production for minerals, including coal. Petrobangla has 10 operating companies, including Bangladesh Petroleum Corporation, formed in 1976 and a separate corporate entity, handles oil imports, refining, and marketing. Bangladesh Petroleum Exploration Company (Bapex) is the exploration subsidiary of Petrobangla. Besides Bapex, Petrobangla has 7 other subsidiaries: Bangladesh Gas Fields Company Ltd. (gas development and production, mainly in central gas fields); Sylhet Gas Fields Ltd. (responsible for northern gas fields operation) Gas Transmission Company Limited (national gas transmission system); Rupantarita Prakritik Gas Company Ltd. (natural gas liquids and liquefied petroleum gas); Titas Gas Transmission and Distribution Company (regional gas distribution, with 73% of the market); Bakhrabad Gas Systems Ltd. (regional gas distribution, with 21% of the market); Jalalabad Gas Transmission and Distribution System Ltd. (regional gas distribution, with 6% of the market).
Refinery: Chittagong (31,200 bbl/d)
Foreign Energy Company Involvement: Cairn, Halliburton, Mobil, Occidental, Rexwood-Okland, Shell, Texaco, Unocal
Gas Fields: Bakhrabad, Beani Bazar, Chattak, Feni, Habiganj, Jalalabad, Kailashtilla, Narshingdi, Rashidpur, Sangu, Shahbazpur, Sylhet, and Titas
Ports: Chittagong, Mongla (Khulna)
For more information from EIA on
Bangladesh, please see:
EIA - Country Information on Bangladesh
U.S.-Bangladesh Energy Data Exchange Home Page
Links to other U.S. Government sites:
2000 CIA World Factbook - Bangladesh
US Embassy in Bangladesh
U.S. International Trade Administration, Country Commercial Guide - Bangladesh
Library of Congress Country Study -- Bangladesh
U.S. Department of Energy's Office of Fossil Energy's International section - Bangladesh
US Department of State Country Background Notes -- Bangladesh
Country Report on Economic Policy and Trade Practices - Bangladesh (1999) - U.S. Department of State
The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.
Mission of Bangladesh to the United Nations
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