Santos to Drill in Bangladesh

Santos of Australia has received the crucial nod from Petrobangla, the state-run Bangladesh Oil, Gas and Mineral Corporation, to begin drilling in the Bay of Bengal, off the country sometime this week to prospect for hydrocarbon reserves.

"We've given the nod to it (Santos) to sell its product from the new offshore structures directly to private buyers at the current market price," wire reports quoted Petrobangla chairman Mohammad Hussain Monsur as saying on Sunday.

The company, which intends to drill in block 16 in the Bay of Bengal, Chittagong in the eastern part of the country, has earmarked an investment of $126 million, an initial cost for drilling three wells.

"The mobilization of this drilling rig is a major milestone for Santos in Bangladesh," Santos president in charge of Bangladesh John Chambers said. Drilling would be carried out in new reservoirs already identified during a 2010 3D seismic survey.

Santos which acquired interests in block 16 (Sangu) and block 16 (Exploration) in 2007 from the erstwhile operator Cairn Energy, presently controls 75% in block 16 (Sangu) with Halliburton of the US the balance while the Australian major has the entire holding in block 16 (Exploration).

According to a forecast by Petrobangla, the nation needs to explore hydrocarbon reserves, as its gas reserves will run out by 2015 at the current consumption rate.