Santos_Offshore filed

Australian oil and gas producer Santos has ceased production at Bangladesh’s only offshore gas field because of commercially unviable levels of production.

A senior government energy official told Reuters that Santos, which operates the field, could produce only 2.5 million cubic feet gas daily.

The offshore gas field’s low production is said to fall far short of the 15 million cubic feet gas a day required, without which the well would not be economically viable.

Initailly, the field produced up to 180 million cubic feet of gas daily, with a decline in production witnessed gradually.

In July 2013, Santos attributed the closure to the steeper-than-expected decline at the well.

UK-based Cairn Energy commenced drilling on the field in 1994 and started production in 1996, before 50% of its interest was sold to oil firm Shell. Shell sold its share back to Cairn Energy again.

"The offshore gas field’s low production is said to fall far short of the 15 million cubic feet gas a day required."

In November 2010, Cairn Energy’s wholly-owned subsidiary Capricorn Energy signed a conditional sale and purchase agreement with Santos International, wherein Santos acquired the entire issued share capital of Cairn Energy’s Sangu Field.

Cairn Energy Sangu field owns a 37.50% interest in the producing Sangu gas field, offshore Bangladesh, and a 50% interest in block 16 exploration acreage.

Santos initially invested in Bangladesh in 2007 with the purchase of Cairn Energy Bangladesh and drilled three wells in the Sangu area in 2011, after acquiring seismic surveys in 2010.

Santos, which has the largest exploration and production acreage position in Australia, has also developed major oil and liquids businesses in Australia and operates in all mainland Australian states and the Northern Territory.

Image: Santos’s Bangladesh offshore gas well would not be economically-viable if its output fell to 15mmcfd. Photo courtesy of TeddyBear[Picnic] /