en.Wedoany.com Reported - The Bangladeshi government has decided to strengthen the state-owned oil exploration and production company BAPEX and expand domestic natural gas exploration to reduce dependence on imported fuels and enhance energy security.
Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood made the remarks at a post-budget press conference held at the Osmani Memorial Auditorium in the capital Dhaka. He stated that over the past 17 years, Bangladesh's energy sector has relied almost entirely on imports, and despite gaining maritime boundaries and the existence of potential onshore exploration areas, insufficient measures have been taken to find new natural gas resources.
Mahmood noted that the government has decided to revitalize BAPEX and enhance its operational capacity. BAPEX had achieved success in the past but has effectively been marginalized. As part of the plan, the government will procure an additional five drilling rigs to increase onshore exploration activities. For offshore exploration, due to BAPEX's lack of relevant experience, Bangladesh has invited international oil companies to participate. Tenders have been issued, and once the process is completed, negotiations will be held with the winning bidders and blocks will be allocated.
The minister stated that Bangladesh will continue to rely on imported fuels in the short term. Following the crisis in the Strait of Hormuz, some suppliers invoked force majeure clauses, forcing the government to seek alternative fuel sources, but Bangladesh's fuel supply has remained stable. The government has spent approximately $2.5 billion on fuel imports to ensure energy security.
In the power sector, Mahmood acknowledged facing financial pressure due to subsidies and legacy debts. The government purchases electricity from private power plants at higher prices and sells it to consumers at lower prices, with the difference covered by government subsidies. The government inherited unpaid bills totaling about 560 billion taka in this sector, which must be repaid, along with settling current bills, creating significant financial strain.
Regarding capacity charge payments to independent power producers, Mahmood stated that the issue is legally complex due to contractual obligations. The agreement structure provides extensive protection for investors; if capacity charge payments are abruptly halted, lenders may demand repayment, and some power plants may become inoperable. The government has sought legal advice from the Ministry of Law on this matter and, if a favorable opinion is received, will consider taking appropriate legal measures.
Finance Minister Amir Khosru Mahmud Chowdhury, Information and Broadcasting Minister Zahir Uddin Swapon, and cabinet members attended the meeting.
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