The economy that is laming under the burden of a huge budget deficit is yet to receive from the authorities concerned a release and utilisation process of the Gas Development Fund even after 27 months of its formation, while around Tk 1,200 crore accrued in the fund over the period is lying unutilised.
It took a long bureaucratic process for the Energy Division to arrive at the decision to release and utilise the GDF following a guideline, instead of a rule, incorporating a major part of the guideline designed by the Bangladesh Energy Regulatory Commission in January this year.
The current complications ensued after the BERC through an order issued as per its GDF guideline had allotted Tk 500 crore for three state-run oil and gas exploration and extraction companies on an emergency basis.
In August this year, the Energy Division freezed the move to release and utilise the allotment made from the GDF for the state-run companies, claiming that the BERC did not hold the authority to formulate any guideline and monitor the utilisation of such a fund.
Earlier in 2009, the Energy Division formulated another release and utilisation guideline for the GDF.
An Energy Division official told New Age that both the guidelines were incomplete and inconsistent with certain government rules. The energy ministry then drafted a fresh guideline following the recommendations of the BERC and sent it for approval to the Finance Division on Wednesday.
‘We have decided to utilise the fund under a guideline as the Finance Division gave us the green signal, indicating that it would allow us to use the GDF in the self-finance mode following the guideline. Top officials of the Finance Division also assured us that there would be no problem in using the 55 per cent of the fund, which is realised by the National Board of Revenue as supplementary duty and value-added tax and refunded by the Finance Division to the GDF for self-financed projects, although this portion of the fund is supposed to be utilised under the Annual Development Programme,’ he said.
The official said the Finance Division would scrutinise the draft guideline to check whether it in any way contradicts with the Financial Rule.
He said, after getting the Finance Division’s clearance, the Energy Division would allow Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, to spend the GDF for oil and gas exploration and extraction activities.
In a public hearing on July 30, 2009, the BERC increased the price of gas for power generation, fertiliser production, and industrial, commercial, and household use by 11.22 per cent on the condition that a ‘gas development fund’ would be formed by the additional revenue collected from the consumers from August 2009.
The commission also specified the areas – oil and gas exploration work, drilling of wells, setting up process plants, and laying down pipelines connecting them to the gas transmission lines – where the GDF would be utilised.
Experts and rights activists have criticised the Energy Division’s move, saying that a quarter in the government was creating obstacles to the process of increasing the investment capacity of the state-run oil and gas exploration and extraction companies, so that international oil companies would have to be offered to carry out the tasks.
A Petrobangla official said around Tk 1,200 crore had been accumulated in the GDF. As the extraction of gas has been on the rise since early 2010, the fund will start increasing by more than Tk 1,000 crore per annum within a year or two.
According to the BERC-formulated GDF guideline, the authority of releasing and utilising the fund had been delegated to Petrobangla.
The guideline also says, ‘A committee set up by Petrobangla, comprising officials of Petrobangla and its subsidiaries engaged in exploration and production, will identify the projects that will be financed with money from the GDF.’
But, as per the guideline drafted by the Energy Division, the energy ministry will control the GDF and the oil and gas exploration and extraction companies will have to take permission of the Energy Division through Petrobangla for approval, finance, and implementation of such projects under the GDF.
Experts said such a control of the Energy Division on the GDF would waste the project implementation time of the oil and gas exploration and extraction companies.
Officials of the state-run oil and gas exploration and extraction companies said a number of projects were in limbo at the moment as those had been planned for implementation using the GDF.
These projects include the one designed by the Bangladesh Petroleum Exploration and Production Company, or BAPEX, to drill an exploration gas well and, after discovery of any gas reserve, to drill a gas extraction well and set up a gas process plant in the Shunetro Gas Field using the GDF. Another BAPEX project to drill gas wells and set up process plants in Shahbajpur, Rupganj, Begumganj, and Semutang gas fields and a project of the Bangladesh Gas Field Company to drill a gas well and set up a process plant in Kamta Gas Field near Dhaka using the same fund are also put on ice.
Petrobanagla chairman Hossain Monsur, however, hoped that implementation of the projects would start soon.
Source: newagebd.com/newspaper1
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