Chinese cos buy Chevron Bangladesh

Star Report

US oil giant Chevron Corporation yesterday announced that its subsidiary, Chevron Global Ventures Ltd, entered into an agreement to sell the shares of its wholly-owned indirect subsidiaries operating in Bangladesh to Chinese consortium Himalaya Energy Co Ltd.

Himalaya Energy is owned by China ZhenHua Oil Co and CNIC Corporation Ltd. The financial deal has not been disclosed.

Chevron Bangladesh operates Block 12 (Bibiyana Field) and blocks 13 and 14 (Jalalabad and Moulvibazar fields). Closing of the transaction is subject to satisfaction of certain closing conditions.

Chevron is currently responsible for more than half of the country's daily gas production. The company provides more than 1,400 million cubic feet per day (mmcfd) of gas from these three fields against the country's daily production of around 2,600 mmcfd. Of the three fields, the Bibiyana alone provides more than 1,100 mmcfd of gas.

Besides, Chevron daily produces around 9000 tonnes of condensate -- a liquid fuel by-product found in some gas fields. The country's other gas fields produce around 1,500 tonnes of condensate.

Chevron's earlier operations -- including discovery of the massive Bibiyana field in the late nineties -- were spearheaded by Unocal which was globally acquired by Chevron in 2005. The company invested around $3 billion. It currently has 538 employees.

The US firm operates under two production sharing contracts (PSC) under which it gets maximum $3 dollars for per 1000 cubic feet of gas. Under the PSCs, Bangladesh gets proportionally a bigger chunk of gas as free share, making the deals very profitable for the country.

Chevron announced selling out of its assets in different countries, including in Bangladesh, last year due to oil price slump that led to losses. As the company decided to sell its Bangladesh assets, the government made an offer. However, Chevron didn't accept it and started negotiations with Chinese company ZhenHua Oil.

Chevron Corporation is one of the world's leading integrated energy companies. Through its subsidiaries across the world, the company is involved virtually in every facet of the energy industry.

While surveying the Bibiyana field area, Chevron (previously Unocal) introduced three-dimensional seismic survey in Bangladesh for the first time in the late nineties.