US oil company Occidental has taken preparation to drill an exploratory gas well at Kalachhara near the Magurch-hara gasfield site next week without any environmental clearance, sources said.

The US company that has sold all its concerns in Bangladesh to Unocal, another American company, has already mobilised drilling equipment at the site, located six kilometres off the Magurchhara site in Maulvibazar under Block 13.

Occidental's poor operations al Magurchhara ended in a massive blow-out in the night of June 14. 1997. According to estimate by oil and gas experts, jhe blow-out dajruy»ed a gas ’ strifqtui'e'wbrih tZO^uitirion US

dollars. The Department of Environment also demanded Tk 612 crore compensation for environmental damage.,

An Occidental official, when contacted, however claimed that the company "obtained all necessary clearance".

But Petrobangla sources said that Occidental was hurrying with its drilling programme at Kalachhara without environmental clearance.

“The reason for the hurry is that Occidental is contractually obligated to complete the drilling by December 31". said a source.

Occidental's Production Sharing Contract (PSC) with the government for blocks 13 and 14 expired on January 10, 1998. Besides failing in many other obligations, the company could hot drill a single well in any of the blocks.

Later, the government “extended" Occidental’s PSC on. condition that it would compensate the environmental damages caused by the blow-out. Though the government claimed Tk 612 crore compensation. Occidental won its argument that the environmental damages would be assessed by a joint panel of experts and compensation would be paid as per the assessment.

"But till date, no such experts' panel has been formed." said a source. "Although Occidental would be leaving soon, the government did not take any move to realise the compensation."

Occidental earlier drilled another exploratory well in Kafna and struck an oil reservoir. Sources said Kafna may have a "very good oil reserve". Occidental had drilled the Kafna well amid Petrobangla's objection that the drilling area was located in a ring-fenced or reserved area. This issue is still unresolved.

Gas production at Occidental's Jalalabad gas field was

suspended last month as the processing plant was shut down due to short-supply of propane, a chemical needed for the plant. Jalalabad field was supplying 60 million cubic feet of gas per day (nnncfd). Gas consumption in. the country is now around 900 mrriefd.

“This was yet another instance of Occidental's poor operation. Propane should have been kept in stock by Occidental in advance. The gas processing plant is closed for more than two weeks due to lack of propane. It will take another couple of weeks to import the chemical and resume gas production in the plant."

Meanwhile. Occidental's handing over of its assets to Unocal is being delayed. Industry insiders said the handing over will be completed by the end of this month. But Petrobangla sources said it will take two more months before Occidental can really wind up from Bangladesh.

Under a deal struck between the two companies early last month. Occidental will take over some of Unocal's concerns in the Middle East in exchange of its three blocks (12. 13 and 14) in Bangladesh. Unocal had 50 per cent partnership in these blocks since early 1997.