Petrobangla has five-month outstanding dues of $260 million to Chevron for gas purchase: Official sources

State-run Petrobangla owes to Chevron Bangladesh about $260 million in unpaid dues for purchasing gas from its Bibiyana and other gas fields, official sources said.

The sources said this week that Petrobangla purchases about $50 million worth of natural gas from the US-based multinational company's Bangladesh subsidiary every month. The state-run company has failed to make payments for over five months apparently due to cash crunch.

Available statistics show that Chevron currently supplies about 1,200 million cubic feet of gas per day (MMCFD), about 50% of the country's total 2,612 MMCFD gas production.

Of this, 1,017 MMCFD gas comes from the country's largest field of Bibiyana while Jalalabad supplies 153.4 MMCFD and Moulvibazar 16.4 MMCFD.

Petrobangla officials admitted that this is the first time the country has been under pressure in making regular payment to foreign oil and gas companies due to the country's declining foreign exchange reserve.

The officials of the Energy and Mineral Resources Division share the same view. They said the import of petroleum fuels and LNG came under pressure following the decline of foreign currency reserves which dropped below $19 billion in 2023 from over $48 billion in 2022.

As a result, the government had to reduce imports of LNG for some time last year and also cut the payments to foreign and local suppliers.

"That's why Chevron and other companies' payments have remained pending," one official told UNB, speaking on condition of anonymity.

Asked about the outstanding payment, Chevron, in an official statement on Wednesday, said, "As a long-standing company policy, we do not provide figures of our outstanding dues for commercial reasons."

It also said Chevron Bangladesh continues to work in partnership with the government of Bangladesh and Petrobangla to deliver safe and reliable supply of affordable natural gas which is essential to help meet the country's growing energy demand. Chevron has been investing in Bangladesh for nearly 30 years.

"We are excited by the country's potential economic growth and the benefits this can bring to its people," it added.

Meanwhile, the officials of the Energy and Mineral Resources Division have informed that Bangladesh Bank has increased its supply of foreign currency to continue its import of petroleum fuels and gas from abroad and also from locally operating foreign companies.

According to officials, the Energy and Mineral Resources Division has been getting more foreign currency support from the Bangladesh Bank to pay foreign gas and petroleum suppliers.

"Earlier, we have been receiving about $200 million per week to pay the gas and petroleum bills to foreign companies… Now we're getting more than that amount," Energy Secretary Nurul Alam said on Tuesday.

The remarks from the energy secretary came against the backdrop of the government's outstanding bills with foreign gas and fuel suppliers which recently exceeded more than $500 million.

Industry insiders said the government should put extra focus to clear the outstanding dues of the foreign companies as early as possible.

Otherwise, it may send the wrong message to the international investors who want to invest in the energy and power sector in Bangladesh.

They said it is necessary to improve the payment situation ahead of the international offshore bidding for hydrocarbon exploration in the country's maritime boundary.

"If the situation does not improve substantially, the foreign companies may feel discouraged to participate in the bidding round," said one industry insider wishing not to be named.