Report of the Board of Directors on the audited balanced sheet, income statement, auditor’s
report and other activities of Sylhet Gas Fields Limited for the fiscal year 2014-15
Bismillahir Rahmanir Rahim
Distinguished Shareholders,
Assalamu-Alaikum,
On behalf of Board of Directors and on my own behalf I welcome you all to the 33rd Annual General
Meeting of Sylhet Gas Fields Limited. The company has been playing pioneering role in the last nearly five
decades in the discovery, extraction, production and diversified use of natural gas. I recall with delight that
the usage of natural gas as primary energy started in the then East Pakistan now Bangladesh with the
discovery of natural gas at Haripur gas field in the year 1955 and with the commencement of gas
production and supply from Chhatak gas field on commercial basis in the year 1960. The nature & area of
company activities has widened over the period. At present, a total of 13 gas wells are now on-stream
from the four gas fields of the company. A significant amount of liquefiable hydrocarbon is produced with
the gas as co-product from Haripur, Kailashtilla and Beanibazar gas fields. The company has been
contributing significantly to the savings of foreign currency by splitting nearly 3750 bbls/day of gascondensate into marketable diesel, petrol & kerosene. The gas-condensate is obtained from Bibiyana gas
field of Chevron Bangladesh. This foreign currency would have otherwise been spent in the import of
petroleum products. The natural gas liquids (NGL), being produced in the molecular sieve & turboexpander plant of Kailashtilla gas field, is used as feed-stock to produce liquefied petroleum gas (LPG). It is
noted that the molecular sieve & turbo-expander plant is the first of its kind in the country.
The year 2014-2015 has been another milestone in the continued economic progress of the company.
Since inception, as a profitable organization, the company has been contributing greatly to keep the wheel
of economy vibrant & dynamic by depositing significant amount of revenue in the national exchequer every
year. The company has been awarded by National Board of Revenue as the top-most VAT-payer in the
production sector in the last consecutive four years. We are delighted at the continued & successive
achievement of Sylhet Gas Fields Limited, the oldest gas producing company in the country.
I, now, present a brief report on the activities of the company and the Audited Balance Sheet & Income
Statement, Auditor’s reports for the financial year 2014-2015:
1.0
Operational activities:
The company has 4 (four) producing gas fields namely-Sylhet (Haripur), Kailashtilla, Rashidpur and
Beanibazar under its umbrella. A total of 13 gas wells (2 wells at Sylhet, 4 wells at Kailashtilla, 5
wells at Rashidpur and 1 well at Beanibazar) are currently on stream which produced an average
of 150.00 mmscf gas daily in the year. The produced gas is supplied to Jalalabad Gas T & D
System Ltd., Bakhrabad Gas Distribution Company Ltd., Pashchimanchol Gas Company Ltd. and
Karnaphuli Gas Distribution Company Ltd. franchised area. During the year under report gas
production from the newly drilled wells Rashidpur-8 & Kailashtilla-7 started from August 2014 and
September 2015 respectively. A substantial amount of condensate (heavy + light) & Natural Gas
Liquids (NGL) is extracted from the gas stream during the course of gas processing. The
condensate is split into petrol, diesel and kerosene. Besides, the gas-condensate available from
Bibiyana field of Chevron Bangladesh is piped to the Rashidpur Condensate Fractionation Plant
(RCFP) and is split into petrol, diesel and kerosene.
1.1
Brief description on gas and condensate processing plants of the company:
The wells so far drilled, the wells on-stream at present, the type, installed capacity, and present
processing capacity of the gas/condensate processing plants now in operation at different fields of
SGFL is depicted below:
1
Nos. of Well
Year of
Discovery
Field
Total
Wells
Currently
on-stream
Quantity
(mmcf)
Existing Process Plants
Production
Type of
Nos. of
Capacity
Process Plants
Plants
(MMSCFD)
Silicagel
1
30
Silicagel
1
30
MSTE
1
90
Silicagel
3
160
Glycol
1
60
Silicagel
1
60
Sylhet (Haripur)
1955
4
2
8.2
Kailashtilla
1961
7
5
74
Rashidpur
1960
8
5
59
Beanibazar
Chhatak
1981
1959
Total:
Installation
2009
Installation
2012
2
1
22
1
13
9.5
150.7
-
8
430
-
-
-
1
2500 bbls/day
-
-
-
1
1250 bbls/day
Rashidpur condensate
fractionation plant
2.0
Production Statistics:
2.1
Natural Gas:
During the year, the company has produced a total of 54088.550 mmcf of natural gas from its 13
wells of Sylhet (Haripur), Kailashtilla, Rashidpur and Beanibazar fields at an average rate of 150
mmcf per day. Field wise production data in the year and the year before is given below:
2014-2015
Field
Sylhet (Haripur)
Kailashtilla
Rashidpur
Beanibazar
Total
Producing Well
well nos.-2 (7 & 8 )
well nos.-5 (1,2,3,4 & 6)
well nos.-5 (1,3,4, 7 & 8)
well no.-1 (2)
No. of wells-13
2013-2014
Total Production
(mmcf)
350.898
26461.330
21106.127
3470.195
54088.550
Producing Well
well nos.-2 (7 & 8 )
well nos.-6 (1,2,3,4,5 & 6)
well nos.-4 (1,3,4 & 7)
well nos.-2 (1 & 2)
No. of wells-14
Total Production
(mmcf)
3193.738
29290.644
17059.854
3730.391
53274.627
The gas production in the year has increased by 813.923 mmcf. The gas production has increased
due to the commencement of production from the newly drilled well no. Rashidpur-8. Mention is
made that the gas production remained suspended throughout the year from wells no. Kailashtilla5 & Beanibazar-1. On the other hand, owing to excessive water & sand production, well no.
Kailashtilla-1 has produced gas only for one month.
SGFL and other gas producing companies’ gas production as percentage of total gas production in
the country in the year 2014-2015 is mentioned below:
Name of the company
SGFL
BGFCL
BAPEX
Sub-total
IOC
Grand total
2.2
Production (mmcf)
54088.550
297669.160
39774.064
391531.774
500639.516
892171.290
Percentage (%)
6
34
4
44
56
100
Condensate and Natural Gas Liquids (NGL):
The company has produced 33697.159 kilolitres of heavy condensate (which is not fractionated) &
2188.566 kilolitres of light condensate (which is not directly sold) i.e. a total of 35885.725 kilolitres
of saleable heavy and light condensate from its Sylhet (Haripur), Kailashtilla, Rashidpur, and
Beanibazar fields in the year 2014-2015. It is seen from the field-wise condensate production
statistics that owing to the total suspension of gas production from two heavy hydrocarbon rich
wells – Kailshtilla-5 & Beanibazar-1 and partial production of another heavy hydrocarbon rich well
no. Kailastilla-1, the total condensate production has decreased although gas production has
slightly increased in the year.
Besides, an amount of 27623 kilolitres of Natural Gas Liquids (NGL) produced from Kailashtilla
MSTE plant has been piped to RPGCL’s NGL fractionation plant at Kailashtilla which is 72 kilolitres
i.e. 0.26 % lesser than the previous year. Kailashtilla MSTE plant is capable of extracting 29,000
2
kilolitres NGL from the present gas production rate of around 60 mmscfd. NGL is used as feedstock
for the production of LPG. RPGCL doesn’t receive NGL regularly in full quantity causing the
necessity of burning the NGL in the flare. It creates adverse impact on the environment. Field wise
production data of condensate & NGL is as follows:
(Kilolitre)
Gas Field
Sylhet (Haripur)
Kailashtilla
Rashidpur
Beanibazar
Total
Condensate
(Heavy+Light)
2014-2015
Light
Condensate
1732.974
455.592
2188.566
Heavy
Condensate
319.845
23811.177
1416.047
8150.09
33697.159
2013-2014
Light
Condensate
1932.094
794.699
2726.793
Heavy
Condensate
373.653
27297.977
1257.049
8506.846
37435.525
NGL
27623
27623
35885.725
NGL
27695
-
40162.318
SGFL and other gas producing companies’ condensate & NGL production as percentage of total
condensate/NGL production in the country in the year 2014-2015 is summarized below:
Company
SGFL
BGFCL
BAPEX
Sub-Total
IOC
Total
2.3
Condensate
Percentage
Quantity
(%)
35885.725
8
28468.473
6
3668.386
1
68022.584
15
393563.541
85
461586.125
100
NGL
Quantity
Percentage (%)
27623
27623
27623
100
100
100
Petrol, Diesel, Kerosene and Octane:
The condensate available from Bibiyana field of Chevron Bangladesh is fractionated into petrol,
diesel and kerosene in the Rashidpur Condensate Fractionation Plant (RCFP). The company has
produced about 90796.903 kilolitres of petrol (including the light condensate of Sylhet &
Kailashtilla fields), 35712.053 kilolitres of diesel and 29331.810 kilolitres of kerosene by processing
condensate employing its fractionation plants at RCFP, Sylhet (Haripur) field, and Kailashtilla field.
Field wise petrol, diesel, kerosene and octane production is as follows:
(Kilolitre)
Field
RCFP
Sylhet
(Haripur)
Kailashtilla
Total
Petrol
78481.067
2014-2015
Diesel
28011.223
Kerosene
28587.184
Octane
-
Petrol
71025.727
2013-2014
Diesel
Kerosene
30793.620 29369.028
Octane
6878.449
2473.643
-
744.626
-
2715.905
-
792.793
-
9842.193
90796.903
7700.830
35712.053
29331.810
0.00
9799.930
83541.562
7757.177
38550.797
30161.821
6878.449
In the year petrol production has increased by 7255.341 kilolitres whereas diesel and kerosene
production has decreased by 2838.744 kilolitres and 830.011 kilolitres respectively as compared to
the previous year. The diesel and kerosene production has decreased as the oil marketing
companies have not lifted the petroleum products in the intended quantities keeping pace with the
production capacity. The process of converting a portion of petrol into octane remained suspended
due to the embargo imposed by the Environment & Forest Ministry on the import and use of
previously procured LD-K02 brand octane booster. The process of importing octane booster as per
changed and gazetted specification issued on 31-01-2013 by the Environment & Forest Ministry
could not be completed through tendering process resulting in the total suspension of octane
production from RCFP.
SGFL and other gas producing companies’ petrol, diesel & kerosene production as percentage of
total production in the country in the year 2014-2015 is summarized below:
3
(Kilolitre)
Company
SGFL
BGFCL
BAPEX
Sub-total
IOC
Grand Total
2.4
Petrol
Quantity
Percentage (%)
90796.903
88
12068.644
12
102865.547
100
102865.547
100
Diesel
Quantity
Percentage (%)
35712.053
47
39528.223
53
75240.276
100
75240.276
100
Kerosene
Quantity
Percentage (%)
29331.810
100
29331.810
100
29331.810
100
Characteristics of SGFL Natural Gas:
Compared to the other gas fields of the country, the natural gas being produced from Kailashtilla
and Beanibazar fields of SGFL contain significantly higher amount of liquid hydrocarbons
(condensate). Beanibazar wells and Kailashtilla wells yield 2.385 kilolitres and 1.272-1.590 kilolitres
of condensate respectively from each million cubic feet of produced gas. Besides, Molecular Sieve
Turbo Expander (MSTE) plant, being in operation at Kailashtilla field yields an additional amount of
around 1.272 kilolitres of Natural Gas Liquids (NGL) from each million cubic feet of gas during the
course of processing in the cryogenic section of the plant. The NGL, not available in any other gas
fields in Bangladesh, is of great economic value and is used as feed-stock for manufacturing
Liquefied Petroleum Gas (LPG).
3.0
Sales Statistics:
3.1
Natural Gas:
In the year, a total of 54015.393 mmcf of gas was sold to Jalalabad Gas T & D System Ltd.,
Bakhrabad Gas Distribution Company Ltd., Karnaphuli Gas Distribution Company Ltd. and
Pashchimanchal Gas Company Ltd. as per gas consumption break-down given by GTCL. The
amount includes the quantity of gas consumed (28.393 mmcf) gas as fuel for power generation
and domestic usages. The gas sold in the previous year was 53175.000 mmcf. It may also be
mentioned that, in the year 2014-2015, 73.157 mmcf of gas was used as fuel for process heaters
and compressors of gas process plants.
3.2
Petroleum Co-Products:
In the year 2014-2015, a total of 56998.017 kilolitres of condensate (Heavy & Light) of Rashidpur,
Kailashtilla, Beanibazar and Haripur of SGFL, 1332 kilolitres of condensate from Fenchuganj field of
BAPEX and 235002.807 kilolitres of condensate from Bibiyana, Moulvibazar & Jalalabad field of
Chevron Bangladesh was sold. On the other hand, a total of 90877 kilolitres of petrol, 34998
kilolitres of diesel, 27423 kilolitres of kerosene and 27623 kilolitres of NGL was sold. An amount of
129514.5 kilolitres of condensate was sold to the ten condensate fractionation plants built and
being operated by private organizations in the country. The amount is 7341 kilolitres (15.46%)
more than the year before. The ten privately-owned condensate fractionation plants are contracted
to SGFL for purchase of condensate.
4.0
Financial Activities:
Respected Shareholders,
Now I present a brief description of financial activities of the company for the year 2014-2015:
In the financial year 2014-2015, the actual revenue expenditure stood at TK. 59.85 crore against
the allocated revenue budget of Tk. 83.52 crore. The revenue expenditure reduced by Tk. 23.67
crore (28.34%) compared to budget estimate. In the year, the expenditure on salary and
allowances reduced by Tk. 5.1 crore, expenses on repair & maintenance of plant/machinery
reduced by Tk. 10.08 crore and savings of another Tk. 8.40 crore in a number of sub-heads owing
to expenditure reduction and strict financial discipline maintained by the management resulted in
the reduction of total revenue expenditure by Tk. 23.67 crore.
4
As per government directive debt to equity ratio of any gas production organization shall be kept
limited to the ratio of 60:40. In the case of SGFL, debt to equity ratio stood at 9.65:90.35 at the
year end which was 6.30:93.70 in the previous fiscal year. Besides, in the year 2014-2015 the rate
of return on net average fixed asset stood at 79.14% which was 94.81% in the previous fiscal
year. The above indicators manifest the sound financial base of the company.
4.1
Sales Income:
The sales statistics of gas, condensate, petrol, diesel, kerosene, octane and NGL during the year is
as below:
(Gas: mmcf)
(Petroleum co-products: kilolitres)
Products
Gas
Condensate
Petrol
Diesel
Kerosene
Octane
NGL
Amount sold
54015.393
35658.54
90877.65
34997.62
27423.80
27623.00
Total income
2014-2015
Revenue
income
(Tk.in crore)
415.58
Percentage of
income
1251.55
75.07
1667.13
100
24.93
Amount sold
53203.361
39636.39
83283.13
40471.00
30213.40
7301.26
27695.00
2013-2014
Revenue
income
(Tk.in crore)
396.08
Percentage
of income
20.35
1549.87
79.65
1945.95
100
In the year 2013-2014 the total amount of sales income was Tk. 1945.95 crore. Due to the
decrease in the amount of kerosene & diesel sales and as a result of downward revision of prices
of all categories of petroleum products effective from 1 November, 2014, the sales proceeds
decreased by Tk. 278.82 crore (14.33%) as compared to the previous year.
In the year 2014-2015 the budgeted sales proceeds was TK. 1997.54 crore whereas actual sales
proceeds stood at Tk. 1667.13 crore. The total amount of sales income reduced by Tk. 330.41
crore (16.54%) compared to the targeted budget amount. As the oil marketing companies did not
lift the petroleum products from RCFP in intended quantities keeping pace with the production
capacity, sales proceeds decreased by Tk. 337.89 crore i.e. 21.26% compared to the targeted
amount.
4.2
Operational Expenses:
In the year 2014-2015 budget estimate for the operational expense was Tk. 927.15 crore whereas
operational expenses stood at Tk. 676.49 crore which is 27.04% less than the budget estimate. In
the year 2014-2015, the expenses reduced by Tk. 5.91 crore on salary and allowances, by
Tk.10.08 crore on plant maintenance & repair, by Tk.1.17 crore on corporation overhead, by
Tk.8.40 crore in various sub-heads owing to expenditure reduction by the management, by Tk.5.82
crore on depreciation head as asset was not attached with the fixed asset according to budget, by
Tk. 6.16 crore on depletion head. Besides, sales expenses on transportation of petroleum products
reduced by Tk. 2.50 crore. On the other hand condensate purchase for RCFP reduced by Tk.
212.60 crore.
The actual operational expense in the previous year was Tk. 817.82 crore. But in the year 20142015 the actual operational expenses stood at Tk. 676.49 crore, which is Tk. 141.33 crore i.e.
17.28% lesser than the previous year. As a result of the decrease of condensate price effective
from November 1, 2014, the expenses on condensate purchase for RCFP decreased by Tk.148.14
crore. Moreover, the expenses reduced by Tk. 5.49 crore on corporation overhead. On the other
hand, expenses increased by Tk. 1.94 crore on salary and allowances, by Tk. 1.66 crore on sales
expenses, by Tk. 3.84 crore as depreciation, by Tk. 0.33 crore on plant maintenance & repair, by
Tk. 0.18 crore on depletion, by Tk. 2.24 crore on the stock adjustment of petroleum products
(excepting RCFP) and Tk. 2.11 crore on stationeries, traveling, training, insurance, fuel,
transportation cost, expenses for security etc. sub-heads.
5
4.3
Profit:
Sales proceeds on gas, co-products & fractionated products and the other income are tabled
below:
Products
Gas
Co-products and
fractionated products
Interest and other income
Total
2014-2015
Amount
Percentage
(Tk. in crore)
(%)
415.58
22.27
2013-2014
Amount
Percentage (%)
(Tk.in crore)
396.08
18.42
1251.55
67.08
1549.87
72.04
198.61
1865.74
10.65
100.00
205.33
2151.28
9.54
100.00
After the deduction of revenue expenditure of Tk. 1251.31 crore made as payment of
supplementary duty, VAT, interest on loan and WPPF, the pre-tax profit in the year stood at Tk.
614.43 crore which is Tk. 117.75 crore or 16.08% less than the previous fiscal year.
5.0
Payment to the Government Exchequer:
During the year, the company has paid Tk. 848.29 crore to the National Board of Revenue which is
50.88% of total sales income of the company. It is mentioned that the total amount paid to the
National Board of Revenue in the year 2013-2014 was Tk.1086.31 crore. Head-wise payment in
the fiscal year 2014-2015 is as under:
Head
Supplementary
Duty and VAT
Income Tax
Dividend
DSL (Debt Service
Liability)
Total
6.0
2014-2015
Amount paid
Percentage (%)
(Tk. in crore)
522.14
61.55
2013-2014
Amount paid
Percentage (%)
(Tk. in crore)
684.72
63.04
186.07
140.08
-
21.93
16.52
-
232.50
168.20
0.89
21.40
15.48
0.08
848.29
100.00
1086.31
100.00
Accounts Receivables and Accounts Payables:
At the year ended on 30 June 2015, the accounts receivables on the sales of gas and petroleum
products stood at Tk. 575.72 crore which is equivalent to 5.50 months' average receivables. Earlier,
POCL, JOCL & MPL used to pay the supply bill of petroleum products to SGFL. It has been decided
that Bangladesh Petroleum Corporation (BPC) by itself, instead of oil companies would pay the
supply bill of petroleum products to SGFL from January, 2015. But BPC did not pay the supply bill
fully within the stipulated 30 June, 2015. Hence, the accounts receivable has increased. The
accounts receivables in the previous year were Tk. 395.73 crore, which was equivalent to 2.70
months' average receivables. At the year ended on 30 June 2015, the accounts receivables from
the gas distribution companies stood at Tk. 133.51 crore which is equivalent to 3.70 months'
average receivables. In the previous year this amount was Tk.118.27 crore which was equivalent
to 2.75 months' average receivables. On the other hand, accounts payables of the company for
payment of SD and VAT to the Government exchequer stood at Tk. 93.16 crore which is equivalent
to 2.94 months’ average payables.
7.0
Capital Structure
7.1
Authorized Capital:
The present authorized capital of the company is Tk. 500.00 (five hundred) crore divided into 5
(five) crore ordinary shares of Tk.100.00 (one hundred) each.
6
7.2
Paid-Up Capital:
The paid-up capital of the company on the last day of the financial year under report stood at
Tk. 88.43 crore.
7.3
Dividend
In the year 2014-2015 the dividend on Sylhet Gas Fields Limited was fixed at Tk. 140.08 crore by
the Govt./Petrobangla which is 158.40% of the SGFL's paid-up capital. The dividend fixed has
already been paid as advance.
8.0
Ongoing Development Projects:
Sylhet Gas Fields Limited has been implementing various development projects for enhancing its
revenue income alongside meeting the ever-increasing energy demand of the country.
8.1
Augmentation of Gas Production under Fast Track Program-SGFL part:
A gas well, Rashidpur-8, was drilled under SGFL part of the project by GOB fund under ADP. As per
the drilling contract with M/s. Gazprom EP International Investment B.V., Russia, the drilling
contractor spudded-in the well on 04-06-2014 and completed the drilling in all respect on
07-08-2014. The well was drilled up to the total depth of 2990m. The well was completed at the
upper gas sand (1475-1497 m MD). An 8-kilometer long 4-inch diameter gas gathering pipe line
has been laid. Upon completion of hook-up between the wellhead and the gas gathering pipe line,
the well has been flowing at the rate of 13 mmcf/d of gas from 27-08-214 and added to the
national gas grid.
As per 2nd RDPP, implementation period of the project is July 2010-March 2016. SGFL part of the
project involves a total expenditure of Tk. 165.25 crore including a foreign currency component of
Tk. 123.60 crore.
8.2
Drilling of one appraisal (oil)/development (gas) well-Kailashtilla-7 at Kailashtilla Field:
Based on the recently conducted 3-Dimensional seismic survey at Kailashtilla field, the project has
been undertaken to drill one appraisal (oil)/development (gas) well-Kailashtilla-7 at Kailashtilla
structure. RDPP of the project was approved by the administrative Ministry on 08-09-2014. As per
RDPP, the project-being financed by Gas Development Fund-is scheduled for completion between
September, 2012 and December, 2015 with a project outlay of Tk. 218.1879 crore including a
foreign currency component of Tk. 58.9894 crore.
The national exploration company, Bapex, spudded-in the well on 17-10-2014 and completed the
drilling operations on 08-03-2015. The well testing was completed on 26-03-2015. The well is now
producing at a rate of around 7/8 mmscfd of gas from 05-09-2015.
8.3
Installation of a 4000-bbl/day capacity Condensate Fractionation Plant at Rashidpur:
The project has been undertaken with the aim of evacuating the enhanced condensate to be
available at Bibiyana field of Chevron Bangladesh and fractionating the condensate into marketable
products i.e. petrol, diesel & kerosene. As per RDPP, approved on 12-08-2014, the project is
scheduled for completion between July 2012 and December 2016 with a total project outlay of Tk.
463.50 crore including a foreign currency component of Tk. 328.80 crore.
Under the project, the land acquisition, engagement of foreign consultant and obtaining of
environmental clearance certificate has been completed. A contract has been signed on 31-072014 between SGFL & Bangladesh Diesel Plant (BDP) Limited (under the management of
Bangladesh Army) for land development, land filling and construction of guard wall. Around 60%
work on land development/land filling is already complete and construction of guard wall has
begun. Another contract has been signed between SGFL and Bangladesh Machine Tools Factory
(BMTF) Limited (under the management of Bangladesh Army) on 14-06-2015 for construction of
boundary wall, box culvert, approach road, deep tube well with pump house, master drain & road7
side drain etc. The jobsite has already been handed over to BMTF Limited. The progress of BMTF's
work is being monitored closely.
A contract agreement between SGFL and EPC contractor has been signed on 27-04-2015.
Finalization of design & drawing of the project is progressing. The other development work such as
construction of petroleum product pipeline, fuel gas line, and civil facilities is now underway. The
projected daily yield of the plant is 445.20 kilolires of petrol, 56.24 kilolires of diesel and 133.560
kilolires of kerosene.
8.4
Installation of a 3000-bbl/day Catalytic Reforming Unit to convert petrol into octane at
Rashidpur:
The project has been undertaken to convert petrol into octane employing catalytic reforming
process (CRU). Petrol would be available from Rashidpur Condensate Fractionation Plant. RDPP of
the project has been approved on 12-08-2014. The project implementation period is targeted from
March 2012 to June 2017 and the project will be financed from company’s own resource. The total
outlay of the project is Tk. 354.13 crore including a foreign currency component of Tk. 276.38
crore. Under the project, the land acquisition, engagement of foreign consultant and obtaining of
environmental clearance certificate has been completed. Land development, land filling &
construction of guard wall is progressing. An international tender has been floated on 24-07-2015
to engage EPC contractor including licensor. The tender will be opened on 11-11-2015. The
project, if implemented successfully, is expected to yield 430.890 kilolires of octane and 25.85
metric ton of Liquefied Petroleum Gas (LPG) per day out of 3000 bbls motor spirit feedstock.
8.5
Construction of two storage tanks at Rashidpur Condensate Fractionation Plant (RCFP)
premises:
In order to ensure continuous full swing operation of the existing Rashidpur Condensate
Fractionation Plant (RCFP) by increasing storage capacity of diesel oil and kerosene oil at RCFP
compound, one diesel tank with a total capacity of 60,000 barrels and one kerosene tank with a
capacity of 20,000 barrels is being constructed with finance from company’s own resource. As per
revised DPP the project is scheduled for completion between September 2012 and December 2015
with a budgeted expenditure of Tk. 21.31 crore in local currency.
In the mean time, the acquisition of land, obtaining of environmental clearance, signing of contract
with EPC contractor, land development and construction of boundary wall & retaining have been
completed. The design & drawings of civil and mechanical construction by the engaged EPC
contractor to build the storage tanks have been approved. The construction of tank foundation
work is completed entirely while tank fabrication is completed up to 75%. Besides, 85% of
boundary wall work has been completed. The construction of tanks has been scheduled for
completion in all respect by December 2015.
8.6
Drilling of appraisal /development well - Kailashtilla-9:
The project has been undertaken based on the result of recently conducted 3-Dimensional seismic
survey. The project is being financed from Gas Development Fund (GDF). As per approved DPP,
the project is scheduled for completion between November, 2013 and December, 2015. The total
project expenditure is Tk. 140.07 crore including a foreign currency component of Tk. 60.99 crore.
It is noted that the project implementation work has been kept suspended up till the completion of
ongoing review of 3-D results as per SGFL’s board decision on 29-04-2015. But procurement of
materials already in the pipeline, land acquisition and construction of warehouse under the project
is continuing but 'go slow' policy is being followed in this regard. Process of engaging foreign
consultant and obtaining environmental clearance in favour of the project is going on.
8.7
Drilling of appraisal /development well Sylhet-9:
The project has been undertaken based on the result of recently conducted 3-Dimensional seismic
survey. The project is being financed from Gas Development Fund (GDF). As per approved DPP,
the project is scheduled for completion between December, 2013 and June, 2016. The total project
expenditure is Tk. 160.27 crore including a foreign currency component of Tk. 55.80 crore.
8
It is noted that the project implementation work has been kept suspended till the completion of
ongoing review of 3-D results as per SGFL’s board decision on 29-04-2015. But procurement of
materials already in the pipeline, land acquisition and construction of warehouse under the project
is continuing but 'go slow' policy is being followed in this regard. Process of engaging foreign
consultant is going on. Environmental clearance in favor of the project has already been obtained.
8.8
Drilling of Rashidpur-10 & 12 (exploratory) well:
The project has been undertaken based on the result and recommendation of recently conducted
3-Dimensional seismic survey. The project is being financed from Gas Development Fund (GDF).
As per approved DPP, the project is scheduled for completion between July, 2014 and June, 2017.
The total project expenditure is Tk. 409.81 crore including a foreign currency component of
Tk. 123.03 crore.
Under the project, a total of 6.50 acre land has been leased on fixed demand long term basis from
the Forest Department. Land acquisition is already completed. The request for hill cutting, razing
and dressing under the project is in the final approval stage. The said approval will follow
obtainment of environmental clearance in favor of the project. A draft contract has been initialed
between SGFL and the selected consulting firm in connection with the engagement of foreign
consultants. The initialed draft report has been forwarded to NBR for vetting.
As per govt. decision, an addendum to the drilling contract has been signed between SGFL and
Gazprom EP International Investments B.V. on 01-09-2015 for drilling of Rashidpur- 10 & 12 under
“The Speedy Supply of Power & Energy (Special Provision) Act -2010. As per approved RDPP, the
total project cost stands at Tk. 556.2745 crore. These two wells are expected to produce around
30 mmscf of gas per day.
8.9
Drilling of Rashidpur-9 (appraisal/development) well:
The project has been undertaken based on the result of recently conducted 3-Dimensional seismic
survey. The project is being financed from Gas Development Fund (GDF). As per DPP approved on
25-03-2015, the project cost is Tk. 198.07 crore including a foreign currency component of Tk.
57.08 crore and is scheduled for completion between February, 2014 and June, 2017.
Under the project, a total of 15.03 acre land has been leased on fixed demand long term basis
from the Forest Department. Land acquisition is already completed. The request for hill cutting,
razing and dressing under the project is in the final approval stage. The said approval is required
for obtainment of environmental clearance in favor of the project. A draft contract has been
initialed between SGFL and the selected consulting firm in connection with the engagement of
foreign consultants. The initialed draft report has been forwarded to NBR for vetting.
The well would be drill by GAZPROM. As per approved RDPP, the total project cost is Tk. 292.2539
crore. The well is expected to produce around 10 mmscf of gas per day.
9.0
Future planning:
The following activities have been planned for increasing the revenue earning of the company
alongside meeting the ever-growing energy demand of the country.
9.1
Short-Term Planning (2016-2018):
 Completion of the drilling of Rashidpur-9, Rashidpur-10 & Rashidpur-12 and Kailashtill-9 &
Sylhet-9.
 Drilling of new wells at Chhatak gasfield based on the available data. The program depends on
govt./Petrobangla’s nod.
 Conduction of 3-D seismic survey over Beanibazar structure employing BAPEX/international firm.
 Review of 3-D seismic survey report of Sylhet (Haripur) submitted by BAPEX.
 Work-over, remedial action/repair on the presently suspended wells.
9
9.2
Medium-Term Planning (2019-2020):
 Commencement of drilling of new well(s) at Beanibazar field based on the planned 3-D seismic
survey report.
 Running of wireline logging in the well – Surma -1/1A (Sylhet-8). Workover of the well based on
the logging result.
 Drilling of another new well at Sylhet (Haripur) field based on the result of Sylhet-9.
 Drilling of another two new wells at Rashidpur field based on the results of drilling of wells which
are currently underway.
 Drilling of new wells at Chhatak structure upon completion of 3-D seismic survey.
 Drilling of new wells in the gas block no. 12, 13 & 14, if remaining area (outside the ring fenced
area of IOC) of the said blocks are given to SGFL.
 Taking initiative to install a 60-mmcfd capacity gas process plant at Haripur gasfield.
9.3
Long-Term Planning (2021-2025):
 Drilling of new wells at Chhatak structure upon completion of 3-D seismic survey.
 Drilling of another two new wells at Rashidpur field based on the results of drilling of wells which
are currently underway.
 If allocated to SGFL, conduction of 2-D seismic survey at Atgram structure and drilling of new
wells based on the result of seismic survey.
10.0
Environment Conservation & Security:
Due emphasis is always given to environment protection alongside the development activities of
the company.
10.1
Environment Conservation:
Environmental Management Plan (EMP) study on the existing process plants at different
fields/installations has been conducted by BETS Consulting Services. Environmental clearance in
favor of the existing process plants has been obtained from the Department of Environment
(DoE).
Environmental regulations are properly observed in operating the process plants in all the
installations. Water produced from the wells are collected and separated from the condensate in
API separators and water is drained regularly in environment friendly manner. Weeds are either
killed or trimmed regularly in and around the wells, process plant, office and residential area.
Wastes generated at residential area and clinical waste are collected & burnt in a pit in
environment-friendly manner.
Saline water and sludge are discharged from the process plants during the course of gas and
condensate production. Setting up of an effluent treatment plant at each field/location is
underway to treat the water and sludge being generated during process operations before
discharging. BUET is providing technical assistance for setting up of effluent treatment plant
(ETP). In the preliminary stage, BUET has submitted a report on the sludge of condensate and
saline water upon making a visit to SGFL’s fields. On the basis of the report and the design &
geometric drawing provided by BUET consultant, SGFL will soon undertake to set-up an ETP at
Beanibazar Gas Plant. The setting up of ETP at the other fields/installations would be undertaken
later on in phases.
10.2
Safe Work environment/Safety:
Appropriate safety rules are maintained in producing gas, condensate, petrol/octane, kerosene,
diesel from the process plants of different fields. Personal Protective Equipment (PPE) is worn by
the employees during maintenance and operation jobs in the process plants, power houses and
other vulnerable points/areas. The procedure/instructions for using PPE are displayed at locations
adjacent to each field/installation with a view to increasing awareness among the officers,
employees and visitors. The efficacy of all Jockey Pumps, Fire Fighting Pumps, Fire Extinguisher,
Water and Foam Deluge System, Fire Hydrants, Fire Monitor, Hot Insulation, Threaded Joint, Pipe
10
fittings are regularly checked / investigated. Besides periodic maintenance and cleaning of various
equipment, Generators’ shed, compressors’ shed are done as per schedule.
Fire fighting and fire prevention equipment are deployed in all important and vulnerable points /
installations for preventing and combating fire and fire-related incidents in the incipient stages.
Fire Hydrant Points and Firewater Ring Mains are always kept serviceable to face any emergency
situation; moreover, fire extinguisher cylinders are kept in place for use in all important and
vulnerable points. In order to install adequate number of fire extinguisher cylinders in all
fields/installations different types of new fire extinguisher/cylinders are regularly purchased.
Refillable fire extinguisher cylinders are refilled and kept serviceable. In addition, company’s two
standalone fire tenders are kept ready round-the-clock to face any emergency situation. Besides,
fire fighting workshops and fire drills in each field in every year is arranged with the
assistance/guidance of Fire Service & Civil Defence station, Sylhet to impart training on
earthquake, landslides, fire & fire-related incident, first aid and rescue operations etc. In
continuation of that the following training course titled-Fire Fighting, Rescue, First-Aid and
Earthquake was arranged in different field/installations:
Field/Installation
Sylhet (Haripur)
Kailashtilla + MSTE
Rashidpur + RCFP
Beanibazar
Duration of the Course
23-24 December 2014
23-24 December 2014
6-7 May 2015
12-13 May 2015
Total:
No. of Participants
25
30
28
17
100
Mention is made that no reportable fire & fire-related incidents occurred in year and the over all
production operations was unhindered.
11.0
Healthcare Service:
Sylhet Gas Fields Ltd. is mainly a gas producing/processing and petroleum co-products processing
company. As the health risk always exist among those working in the process plants for
production, operation and maintenance, the facilities of medical center are there to each of the
fields and headquarters to ensure proper medication. Officers and employees including dependents
are given medical assistance under company’s medical rules by the medical retainer. A comparison
of expenditure on treatment & medication in the year 2014-2015 with that of the previous year is
depicted below:
(Tk. in crore)
Installation/ Field
Headquarters
Sylhet (Haripur)
Kailashtilla
Kailashtilla MSTE Plant
Rashidpur
RCFP
Beanibazar
Total
12.0
2014-2015
Number of
Budgetary
Officer/Employees Allocation
234
37
83
52
1.39
105
48
43
602
1.39
Expenditure
made
0.68
0.11
0.16
0.10
0.11
0.05
0.04
1.26
Number of
Officer/Employees
245
37
78
54
105
50
45
614
2013-2014
Budgetary
Allocation
1.40
1.40
Expenditure
made
0.65
0.11
0.15
0.10
0.10
0.04
0.04
1.19
Security and Protection:
Field/installations including company headquarters are the Key Point Installation (KPI) graded
establishments. Security rules applicable to KPI are strictly adhered to. Company-appointed
security personnel and members of the ansar are on round-the-clock duty to maintain surface
security at the company headquarters and field installations. Besides, assistance from the police
administration is sought when the law and order situation warrants. Meetings of the security
committee are regularly held and actions are taken with all seriousness as per their
suggestions/advice, if any. Required number of street lights/flood lights are in place for the
convenience of night shift duty personnel. Closed Circuit Television (CCTV) has been installed at
the company Headquarters and Rashidpur Condensate Fractionation Plant as part of strengthening
security measures. Initiatives have been taken to install similar system at other installations.
11
13.0
Manpower:
In the latest revised organogram, the company has a provision of total manpower strength of 940
comprising 427 officers and 513 employees. As at June 2015, a total of 602 personnel including
280 officers and 332 employees were in the employment of the company. It is noted that, in the
year 2014-2015, a total of eight officers and four staff went on retirement while 1 officer & 1 staff
member have died. The written and oral tests for recruiting 1st & 2nd class Officers remained
suspended as per Ministry's advice and Petrobangla's suggestions in the face of agitation and
demand of locals. To overcome the stalemate of manpower recruitment, Petrobangla's
suggestions/opinion/direction has been sought in the month of May 2015 after a lapse of nearly 3
years. The company's Board of Directors is also aware of the situation/latest status of manpower
recruitment process. The core demand of the locals is that all the 58 contractor's labour now
working in the Company since long time as "no work no pay basis" shall be given regular
employment in the Company and all the present vacant post in the category of 3rd & 4th class
employee shall be filled-up by the local applicant. But there is no opportunity of meeting their
demand as company's recruitment policy. In the aftermath, an acute crisis of manpower exists in
the Company.
14.0
Human Resource Development:
Officers and employees engaged in various categories of job are imparted foreign and local
training with a view to broaden their skill & professionalism. A total of Tk. 3.50 crore was
provisioned in the budget in the year 2014-2015 on training head. Of the budgeted amount, a total
of Tk. 21,57,902.00 and Tk. 2,92,67,023.00 were spent in arranging local training and foreign
training respectively.
14.1
Local Training:
A total of 216 personnel including 143 officers and 73 staff participated in different (43 courses)
local training courses/seminars.
14.2
Foreign Training:
A total of 50 officers went abroad for participating in different training courses under company’s
own fund. In addition, 9 officers from Ministry/Petrobangla went abroad with company officer for
attending the training courses. The training received/seminar attended is listed below:
Sl
No.
1.
2.
3.
4.
5.
Topics of the Training
Courses
Human
Resource
Management for Oil, Gas
and Mineral Exploration
Industries Using IT.
Project Management
Using IT.
Number of
Participants
10
Accounting and Auditing
for Gas, Oil and Mining
Companies.
Human
Resource
Management for Oil, Gas
and Mineral Exploration
industries Using IT.
Pipeline Risk Assessment
and Management.
10
10
10
10
Institution
Duration
Asian
Institute
of
Technology (AIT) Bangkok,
Thailand
20-31 October, 2014
Asian
Institute
of
Technology (AIT) Bangkok,
Thailand
Asian
Institute
of
Technology (AIT) Bangkok,
Thailand
Asian
Institute
of
Technology (AIT) Bangkok,
Thailand
20-31 October, 2014
Asian
Institute
of
Technology (AIT) Bangkok,
Thailand
8-19 December, 2014
20 April-01 May, 2014
18-29 May, 2014
Total Participants: 50
15.0
Management-Employees Relation:
The differences/disputes arisen were settled amicably and through bilateral discussions and
therefore the overall work environment in the company was quite satisfactory during the year.
12
16.0
Welfare Activities:
16.1
Stipend:
Under the company’s education scheme in the year 2014 a total of 29 students were given lump
sum grant while 46 students were given monthly stipend among the children of company’s
officers/employees who passed the Primary School Certificate (PSC) /equivalent examination. 37
students were given monthly stipend while 24 students were given lump sum award among the
JSC passed/equivalent. 35 students were given monthly stipend while 14 students were awarded
lump sum grant from among the SSC/equivalent examination passed. 16 students were given
monthly stipend while 12 students were awarded lump sum grant from among the HSC or
equivalent examination passed. One degree (Honors)/Engineering student received lump sum
award. In the year, a total of Tk. 12,05,400.00 was spent for the stipend awarded to the children
of the staff & officers.
16.2
Corporate Social Responsibility (CSR):
Under the company’s CSR policy, Tk. 17.44 lakh was given as lump-sum stipend to the poor and
financially disadvantaged but meritorious students in the four Upazilas situated adjacent to the
company’s field/installations. The selection was made from next to the government scholarship
recipients who passed in different examinations. The stipend was awarded with the objective of
nurturing merit among the students.
Besides, with the aim of enhancing social awareness, Tk. 12,000.00 to each of Jaintapur,
Golapganj, Beanibazar & Bahubal upazila (total of Tk. 48,000.00) was given to arrange
seminar/symposium and rally on the occasion of Great Independence & National Day-2015. In
addition, a total of Tk. 1.0 (one) lakh i.e. Tk. 25,000.00 to each of the four upazilas was given to
the valiant freedom fighters as honorarium on the occasion of the Great Victory Day-2014. The
break-up is as under:
Sl.
No.
1.
2.
3.
16.3
Description of the Item
Lump-sum stipend given to the students of 4 Upazila adjacent to
the Company Installation/Field
Arrangement of seminar/symposium and rally on the occasion of
Great Independence & National Day-2015 in the 4 Upazila
For the reception and giving honorarium to the valiant freedom
fighters on the occasion of Great Victory Day-2014 in the 4 Upazila
Total:
Amount Disbursed
(Taka)
17,44,000.00
48,000.00
1,00,000.00
18,92,000.00
Grant:
Under social developments activities, the monthly and lump-sum grant given in the year is as
below:
Sl
No.
1.
2.
3.
4.
5.
6.
7.
Grant
Name of the Institution
Chiknagool Adorso Uchho Biddaloy,
Jointapur, Sylhet
Haripur Bohumukhi Uchho Biddaloy,
Jointapur, Sylhet
Ronokeli balika Uchho Biddaloy & college,
Golapgonj, Sylhet
Buddhi Protibondhi Biddaloy, Shirajgonj
Bongomata Sheikh Fazilatunnesa Mujib Ideal
College, Tarhash, Shirajgonj
Modhyaparha Granite Mine School,
Modhyoparha Mining Company Limited,
Modhyoparha, Dinajpur
Biyam Adarsha Uchcha Bidyaloy, Bahubal,
Habiganj
13
Lump-sum (Tk.)
Monthly (Tk.)
Expenditure in
the Fiscal Year
-
15,000.00
1,80,000.00
-
20,000.00
2,40,000.00
-
18,000.00
2,16,000.00
3,00,000.00
-
3,00,000.00
5,00,000.00
-
5,00,000.00
5,00,000.00
-
5,00,000.00
2,00,000.00
-
2,00,000.00
8.
9.
10.
11.
12.
13.
Fatehpur Adarsha Uchcha Bidyaloy, Bahubal,
Habiganj
Korgram Govt. Primary School, Jaintapur,
Sylhet.
Captain Rashid Football Tournament,
Jointapur, Sylhet
Building construction of Lalabazar Range
Reserve Force of Police, Sylhet
Bangladesh Scouts, Sylhet Area, Sylhet
Bangladesh Scouts, Dhaka
1,00,000.00
-
1,00,000.00
50,000.00
-
50,000.00
15,000.00
-
15,000.00
1,00,000.00
-
1,00,000.00
5,00,000.00
2,00,000.00
-
5,00,000.00
2,00,000.00
31,01,000.00
Total
Of the budgeted amount of Tk. 1.00 (one) crore on CSR and grand head, a total of Tk. 49.93 crore
(18.92+31.01) was spent in the year.
16.4
Socio-cultural activities
As in the past, annual sports and cultural functions were arranged as part of recreational activities
for the officers and employees of the company. Besides, annual Milad Mahfil and Ifter Mahfil were
arranged with due religious fervor and dignity. The great Shahid Dibash and International Mother
Language Day, the great Independence Day, the Victory Day were celebrated with due festivity
and in a befitting manner.
17.0
Challenge and possible means of overcome
 Rashidpur Condensate Fractionation Plant (RCFP) & other fractionation units at Kailshtilla &
Haripur cannot often be run in full swing for not lifting the products (petrol, diesel & kerosene) in
the intended quantities in line with the production capacities.
 SGFL’s existing gas margin is Tk. 0.225/cubic meter whereas BGFCL’s, BAPEX’s & IOC’s margins
are Tk. 0.833, Tk. 0.93 & Tk. 6.863 per cubic meter respectively. SGFL cannot meet even onethird of its total operational expense with such a low gas margin. A proposal for increasing the
gas margin for SGFL has been sent to Petrobangla upon due approval from SGFL’s board. The
company’s request for increasing gas margin warrants early consideration.
 A total of 26 wells (1 in Chhatak, 8 in Haripur, 8 in Rashidpur, 7 in Kailashtilla & 2 in Beanibazar
field) have so far been drilled since the incipience of the company. Four wells at Haripur field
became unsuccessful at time of drilling in 1950s & 1960s. In the four fields (excepting Chhatak)
8 wells (Haripur-3 & 6, Kailashtilla-1 & 5, Beanibazar-1, Rashidpur-2, 5 & 6) out of 21 is now out
of stream owing to natural decline of reservoir pressure and excessive water production
accompanied by sand. A committee, recently formed by Petrobangla, has given recommendation
& suggestion as to the means of bringing production from the off-stream wells. Besides, the gas
reserve of SGFL’s fields is depleting slowly but surely resulting in the decline of overall gas
production & supply. At present, SGFL is producing around 148 mmscf of gas daily from its 13
on-stream wells whereas the company was capable of producing around 220 mmscf of gas daily
back in the year 2002. Increasing gas production capacity of the company is now a requirement
of the time in the backdrop of ever-increasing gas demand in the country.
 NGL (Natural Gas Liquids) of MSTE plant at Kailashtilla is supplied to RPGCL’s NGL fractionation
plant at Kailashtilla. The NGL is fractionated in to petrol & LPG by RPGCL. The produced LPG is
piped to LPG bottling plant of LP Gas Limited and petrol is marketed to BPC’s oil marketing
companies by means of tank lorries. As the overall petrol demand in the country does not
commensurate with the total production capacity, ullage problem often occurs in the storage
tanks of RPGCL. On that pretext, RPGCL does not receive NGL in full quantity resulting in the
burning of non-received portion of such a valuable NGL to the flare. This attributes to the cause
of environmental pollution on one hand and negatively impacts the revenue earning of SGFL on
the other hand. In view of that, SGFL proposes to handover the old 65 MT capacity NGL
fractionation plant (now lying idle at Kailashtilla premises) of RPGCL to SGFL. In such case, SGFL
can utilize this facility upon relocation and reinstallation at MSTE plant premises. If SGFL’s
request is considered, burning of non-received portion of NGL can be avoided and SGFL can
produce petrol & LPG. Environmental pollution can thus be averted to a great extent.
14
Respected Shareholders
The overall success of an organization largely depends on the pragmatic policy & appropriate work strategy
of management, expertise of the personnel & proper evaluation and favorable work environment. The
merit of the work force, the dedication and honesty/integrity are considered as the driving force of an
organization. I am greatly delighted that Sylhet Gas Fields Ltd., the oldest gas producing company in the
country, would be able to contribute more in the national economy through the utilization of its resources
and opportunities/potentialities. On behalf of the Board of Directors, I sincerely pass my thanks to all the
officers and employees working at different tier for the continued success and satisfactory work
environment prevailing in the company. Alongside, I wish to record my sincere gratitude and thanks to the
Energy and Mineral Resources Division, Planning Commission, Ministry of Finance, Petrobangla, ERD, ADB,
other development associates and local administrations, our valued customers and everyone involved in
conducting company’s affairs. Expressing unflinching support and full trust on the company management I
render my heart-felt thanks to the distinguished shareholders for their kind presence in the Annual General
Meeting of the company.
I wish to firmly believe that, a new horizon of hope would open with the successful implementation of the
development programs/endeavor undertaken by the company with the objectives of its further progress. A
bright and prosperous future await the company and the country, it is hoped.
Now, let me have the privilege of presenting the Board of Directors' Report of Sylhet Gas Fields Limited for
the financial year 2014-2015 before the distinguished shareholders for their kind consideration, adoption
and approval.
Thanks to all.
Allah Hafez.
On behalf of the Board of Directors
(Istiaque Ahmad)
Chairman
15