Decisions made now will determine the country's economic fate for generations to come. Thus, it is imperative that the country’s leaders, both from political and bureaucratic ranks, public opinion makers, and Bangladeshi technical experts, at home and abroad, work as a team to make the right choices for the country.

A year ago. with the bidding' process on different gas and oil blocks under way. there was tremendous optimism over Bangladesh s economic future. The country looked set to "emerge as South Asia's next success story." We appeared headed for unparalleled prosperity.

Now. a year later, the country is devastated by its worst flood of the century. Cries for help are ringing across the globe. The country has gone through huge power shortage, death and suffering —from an unusually cold winter, a heat wave, and then the flood. Prospects of escaping such a vicious cycle appear dim.

The only avenue that could get Bangladesh out of miseries in the long run. namely exploitation of our vast gas resource. remains uncertain. The process to award production sharing contracts (PSCs) is almost a year behind schedule. Countless negotiating sessions have been held with small and large foreign companies. Several hitherto unheard of companies. with little resource or credibility, have surged ahead of their more well-heeled competitors. Some companies have made new proposals to improve their position. Outsiders from far and near have proposed pipelines, power plants, etc., to cash in on our national treasure. Many appear to be putting undue pressures.

Local experts and oil company have bemoaned exclusion from the process. Volumes have been written on the important issues for consideration. Bidders have expressed their frustration and the pronounced indecisiveness has had adverse impact on the country’s investment image. The gas production that came on line recently. under a previous PSC. appears to be costing the country millions of dollars instead of making money. Indeed, it has been an interesting year.

Meanwhile, the price of oil in the world market has dropped by a half and the profits of oil companies nave plummeted with less funds available to them for investment. The ability and willingness of foreign oil companies to invest is fast diminishing and the time to get the best deal for Bangladesh is drifting away. Indeed, the country, without appropriate and adequate means to address the issues, is hesitant lest it should commit a

blunder. However, a missed opportunity may prove to be a bigger blunder.

Many key issues in exploration and production (E&P) have been raised and remain largely unresolved.

Multiple Challenges

Financial, technological, environmental, institutional, and social challenges will be enormous as Bangladesh tries to harness its gas reserves. Environmental pollution, accident prevention, use of scarce agricultural land resource, etc., are of serious concern. However. these challenges offer the country an unparalleled opportunity for growth.

Utilisation or Export?

. Whether the country should export gas to earn hard currency or utilise it internally has been a sensitive issue.

Bangladesh is not floating on gas. contrary to what some would have us believe. True, the reserve estimate of 13 to 50 Tcf is large compared to the current rate of consumption. However, this will dwindle quickly with economic expansion. For example. 13 Tcf will be used up in two years to sustain a GNP onetenth the size of Japanese economy. with no growth in population. Bangladesh must utilise and conserve the gas to develop its own industries and infrastructure. Electric power, generated by gas-fired plants, should meet the load-shedding crisis the country faces perennially, will accelerate industrial growth, and can also be exported to neighbouring countries. Products, using gas as a raw material or a source of energy. can also be exported.

Foreign Partners

Bangladesh does not have the manpower and resources to meet the challenges of exploration and production on its own and needs foreign partners. What should be the profile of a desirable foreign partner? With so many different companies making bids, ranging from ihose with little or no financial resources to oil giants, with different track records in safety, environment, social impact. alleged propensity for political interference, it has become extremely confusing to make a choice. However, following considerations can help sort this out:

• Many foreign companies, especially the big ones, have the financial and technological resources Bangladesh needs. The

large companies have net incomes in hundreds of millions to billions of dollars. They have often made long-term social commitment by building roads, schools, and hospitals in countries they have partnered with. Most of them have been quite willing to assist in transfer of technology.

• However, not all are equal in their record in safety and environment. and in their respect for the people and their institutions. Let us review the following antecedents of a few oil companies that are either already in Bangladesh or are bidding to enter.

The oil company operating at the 1997 Magurchara accident site in Srimangal was also I he operator at the Piper Alpha platform In the North Sea that blew out in 1988 killing 167 workers and causing damage in billions of dollars. Allegedly, the company paid no compensation for that incident.

Recently, another mediumsized US oil company, bidding for a key block in Bangladesh, has been fined millions of dollars for ignoring environmental laws for years and causing massive pollution in California. The US Department of Labour has now established that this company and a French company (also bidding here) have been using forced labour in a country neighbouring Bangladesh to build a pipeline to transport gas to a power plant in a third country. Interestingly. news reports indicate that the same company is eager to build a pipeline to export gas from Bangladesh. The company was also recently accused in the media of using various less-than-desirable means to try and win oil contracts in a Central Asian country of the for-mcr Soviet Union.

In 1995. a major European oil company bidding here, one of the world's largest, admitted sitpplving guns to the army of an z'uncan dictator. Another major European company was recently implicated in a coup in one of the countries in the south-west Africa.

In India, the police, paid by a US natural gas company to guard a power plant, have been implicated by Amnesty International in violence against

protesters.

• Should the fear of interference and intrusion then cause one to prefer small foreign companies as the lesser "evil?" The answer is a clear no. if one considers the following:

Despite their claims, small companies do not have the financial and technological resource needed for routine exploration. let alone handle accidents or environmental pollution. According to news reports, in 1996 one small company, seeking to drill 10 wells, had only five million US dollars in net income. Another had over 600,000 US dollars in loss. It could cost six million to 20 million dollars to drill a single well depending on the conditions. Many of the gas reserves in Bangladesh are over-pressured and would require special equipment and procedures. Rc cently. a small company exploring in Bangladesh ran into financial difficulties when it drilled a dry hole.

None of the small companies currently bidding would be able to bear the cost of even the Magurchara accident, not to mention the much more devastating Piper Alpha disaster of 1988 in the North Sea that has reouired over eight billion (yes. billion) US dollars to put in new safety procedures.

None of these small companies would be able to pay for the hundreds of millions of dollars in clean-up that was ordered in California recently.

In addition to the lack of finances and technology, small companies are unlikely to have adequate policies, or practices to effectively prevent accidents or safeguard the environment, unlike large companies who. often by laws in their native countries, have had to develop such policies and procedures.

Besides, a small company, in its attempts to attract financing may get backers that are unsavoury or equally adept in intimidating. and take for granted a poor country like Bangladesh. It is worth noting that one of the small companies currently in favour had announced to its share-holders in 1996. months before even the bids were solicited, that it had secured two blocks in Bangladesh.

In view of the above discussion. Bangladesh needs to partner with companies with adequate finances, technology, environmental and social commitment. and an acceptable record on refraining from political meddling, of course, with a strict framework defined for them to operate within.

Current PSC-Award Process

Will the current multiple-block. multiple-company PSC-award process meet the country's needs?

As recent reports on a single PSC with a foreign company indicate, multiple PSCs will be unmanageable - the country simply does not have the regulatory and technical resources to do so. Besides, it does not appear to be the optimum way to harness the country's only significant resource. The concern expressed in local dailies on producing too much gas by giving out all blocks simultaneously is real. In addition, handling jurisdictional claims by a multitude of companies in marketing, transport, utilisation. etc., is likely to be a nightmarish and paralysing > experience.

Consequently, the fragmented PSC-award process needs adjustment. One approach would be to form a consolidated joint venture (JV) for the whole country with a consortium (or two) of qualified oil companies, with attributes as discussed above. This will be easier to manage than multiple PSCs. The Bangladeshi exploration company should be an integral part of such an arrangement. JVs have been formed in other parts of the world and in some cases were particularly beneficial in developing internal utilisation where export of oil or gas was difficult for a variety of reasons. A JV with a consortium can also mitigate fears of intimidation by a single large company. However, whatever path is chosen for oil and gas exploration in Bangladesh, it must be done without delay. Time is of essence for the country as foreign companies are trying to make investment decisions in a declining world market for oil and gas.

Long-term Social Impact

Finally, a critical Question that must be addressed a priori is: Will the country be able to withstand the inevitable pressures of her new-found wealth?

A sudden and massive influx of wealth can destabilise the country's social fabric, corrupt her institutions, and undermine the hard-earned democracy. Nigeria, with one of the world's largest oil and gas resources, Is a classic example of the malaise that can befall if this issue is not addressed a priori. Over the last two decades. Nigeria has earned billions of dollars for its oil and yet the people have been increasingly impoverished, as successive military regime have plundered this wealth and sustained on it. Bribery and corruption are rampant. People living in the oil-rich Niger delta have little or no access to electricity or running water. In a country almost floating on oil. people line up for hours for gasoline and fuel. There is ongoing social unrest and agitation. In desperation some "vandals" earlier this month broke open a pipeline to siphon off gasoline, causing an explosion and fire that killed nearly one thousand people. The new gvernment of Nigeria has just gun a discussion on these and it will take years to rectify the harm done. Bangladesh, with only an infant democracy, fragile law enforcement and legal institutions, and abject poverty, must be wary lest such a fate should befall her.

To guard against such social disarray and corruption of institutions. the E&P decision process, starting from the bid selection, should be fully transparent. Agents and lobbyists of foreign companies should operate with full disclosure of their clientele, fees, and activities. Direct hiring of the country's armed forces and law enforcement agencies by foreign companies for security duty, in exchange of payments in cash or kind -- a practice rampant in several third world countries --should not be permitted. It is heartening to see that the government has agreed to open some PSCs to scrutiny by the parliament. Hopefully, this is only the first step. Perhaps, it

can be taken a step further by forming a commission to assess the issues discussed above in their totality before important decisions are made.

A Comprehensive Plan

From the above discussion it is clear that a complete longterm plan covering the whole country to explore, produce, and utilise the gas is critical. The plan must address key issues in the cycle such as safety, environmental safeguards, social impact, abandonment, and regulatory safeguards.; develop strict regulations, establish regulatory bodies,; and set up technical institutions to safeguard the public, workers, and the environment. Mechanisms and oversight bodies need to be set up to guard against any propensity for meddling and intimidation by a foreign partner or attempts to corrupt the country's institutions. Eternal vigilance is the price the country must pay to move forward. Remember, once before we had lost our freedom to foreign traders. That bondage lasted nearly two centuries.

A Team Approach

Decisions made now will determine the country's economic fate for generations to come. Thus, it is imperative that the country's leaders, both from political and bureaucratic ranks, public opinion makers, and Bangladeshi technical experts, at home and abroad, work as a team to make the right choices for the country.

True, the country's leaders already face overwhelming challenges in the daily running of our unfortunate and troubled motherland. With a volatile political situation in the country, the Asian economic crisis, an ailing president in Moscow, an impeachment inquiry in Washington DC. etc., journalists and editors no doubt have more interesting issues to contemplate than exploration of natural gas in Bangladesh. However, the oil and gas sector, with a resource worth trillions of dollars, remains the singular hope for deliverance from the pitiful condition we are in. Thus, we fervently hope that the leaders, including the Prime Minister, and opinion makers, such as key journalists, editors, and academics, will be able to pay attention to the oil and gas sector.

It is particularly important to be vigilant in these trying times when all eyes are on the

aftermath of a devastating flood that gripped the country recently, lest some undesirable deals should go through. To their credit, a few Dhaka newspapers have devoted some attention to various aspects of the PSC-award process. The government has so far withstood incredible pressures put on by conflicting interest groups from home and abroad. However, concerted and concerned attention Is needed at this critical juncture, as the window of opportunity to assess the issues judiciously and act wisely is about to close. True, times are difficult and the issues are complex, but address them we must.

It is equally true that some Bangladeshi experts at home have felt left out of the process, others live overseas, and many work for competing interests. However, this is an issue larger than us and our narrow self-interest. It is a once-in-a-lifetime challenge to make a difference with the knowledge we have gained. We need to come together. at our own initiative, to assist in the process, without fear or favour, regardless of our personal biases, views, and wounded pride. We owe It to the country. .

A Closing Query

With a precious and rare gift from nature we stand, once again, at the gates of our coveted destiny of Sonar Bangla for which millions gave their lives. Shall we ignore their sacrifice? Or. shall we come together as a nation, rich and poor, the learned and the ignorant, set aside our prejudices and temptations, and do what is best for our bleeding motherland? Shall we march on to a destiny of greatness? Or. shall we let this opportunity slip as we plunge into economic oblivion as a nation? At the call of a courageous leader twenty-seven years ago. we had beaten back a mighty army. Shall we now be defeated by our own follies? The choice is ours to make.

The author is a Bangladesh-born US scientist involved in research on petroleum and nuclear technologies for the past twenty-four years. He has also sought to motivate technology awareness and transfer in several countries. The opinions expressed in this article are the author's personal views and they do not seek to reflect in any way those of any organisation he is or has been affiliated with.