Bay of Bengal

Flanked by the young, growing and energy hungry populations of India, Bangladesh and Myanmar, the Bay of Bengal finds itself an increasingly hot property in the search to discover new hydrocarbon reserves.
This article appeared in Vol. 7, No. 6 - 2010


The major sedimentary basins and current blocks under lease in the Bay of Bengal. Located in the north-eastern part of the Indian Ocean, the Bay of Bengal was largely ignored by international oil and gas companies until the turn of the decade. Since the late 1990s, however, India’s revamped New Exploration Licensing Policy (NELP) has led to more than 60 offshore exploration blocks being issued along its east coast. Exploration has yielded some significant gas discoveries, with Reliance Industries Ltd commencing production from its hugely significant Dhirubhai deep water gas development in April 2009. Production now stands at 2.1 Bcfpd and has virtually doubled India’s gas output.

East India lies Bangladesh and the Bengal Fan, the world’s largest fluvio-deltaic-slope fan complex. The country has only one producing gas field in the Bay of Bengal and efforts to lease the offshore are hampered by unresolved maritime boundaries with India and Myanmar. ConocoPhilips, however, signed a preliminary deal with Petrobangla (Bangladesh Oil, Gas & Mineral Corporation) in October 2010 to explore deep water blocks in the Central Bay area, which could signal a change in leasing policy.
Finally, exploration of the eastern portion of the bay is heating up along the west coast of Myanmar. Much of their offshore acreage remains underexplored and some basins are still considered to be frontier areas. Recent gas discoveries have led to very active leasing offshore, but disputes over maritime boundaries could again slow exploration.

Off India’s east coast

Of all the basins in the Bay of Bengal, the Krishna-Godavari (KG) is probably the best understood geologically and the most explored. It stretches 500 km along the east coast of India and extends more than 200 km offshore. Geologic settings include coastal, deltaic, shelf-fan, deep-sea channel and a deep water fan complex.

Cairn Energy made the first deep water discoveries in the Basin with a number of small oil and gas fields on block KG-DWN-98/2 prior to transferring operatorship to India’s state owned oil and gas company, ONGC. The discovery of a supergiant gas field in 2002 by India’s largest private sector E&P company, Reliance Industries Ltd, along with a number of smaller gas fields, has helped the basin emerge as an attractive exploration area. The in-place resource for the KG-DWN-98/3 (D6) deep water block, which incudes the Dhirubhai discoveries, currently stands at an impressive 25 Tcf. Gas production commenced in April 2009.

Most of Reliance’s reserves are found in Pliocene-Miocene reservoirs. They have a three tier exploration play for the basin; biogenic gas in Pliocene to Pleistocene reservoirs, a Miocene turbidite fairway and a thermogenic petroleum system within the Paleocene and Upper Mesozoic. The company is actively using sequence stratigraphy to link the depositional elements, ranging from fluvial to deepwater, on a regional scale.

Other significant gas discoveries in the KG Basin have followed. Gujarat State Petroleum Corporation Ltd (GSPCL) discovered the Deen Dayal gas field with an in-place resource of 2-3 Tcf in 2005. Since then, they have made eight additional discoveries in Cretaceous reservoirs.

Reliance has also been actively exploring the basin north-east of the KG Basin, the Mahanadi Basin. This formed as a result of rifting during the Jurassic and Early Cretaceous. Early Cretaceous basaltic volcanism separates a younger drift phase of Late Cretaceous to Early Tertiary age. Reliance is exploring for biogenic gas in Miocene to Pliocene Bengal Fan sediments and has a thermogenic play in deeper water. They have found about 3 Tcf gas in eight discoveries in shallow water off the coast of Orissa. ONGC has drilled 11 exploratory wells targeting both the shallow and deep water plays, resulting in three gas discoveries.

A third basin off India’s east coast is the Bengal Basin, north of the Mahanadi Basin. More than 40 wells have been drilled with no discoveries to date. It looks at this time that a viable petroleum system has not developed due to poor source and reservoir rocks and a lack of major structural features.  

Attractive future for offshore India

Seismic line across the large Dhirubhai 1 discovery drilled on the KG-DWN-98/3 (D6) deep water block in the Krishna-Godavari Basin, offshore eastern India. Image: Directorate General of Hydrocarbons (DGH) The success that Reliance, GSPCL, Cairn Energy and ONGC have had in exploring the east coast of the country cannot be disputed. Their exploration efforts have resulted in an estimated in-place resource of over 40 Tcf, with significant upside expected from both the Krishna-Godavari Basin and Mahanadi Basin over the next few years.

Reliance, in particular, has high expectations from its KG-DWN-2001/1 (D9) and MN-DWN-2003/1 (D4) deep water blocks. On D9 they have identified leads in the Pliocene-Miocene, Oligocene and Cretaceous as aerially large structural closures in the north-west corner of the acreage. A Pleistocene channel in the south-east portion of the block in ultra-deep water is a fourth target. Initial exploration will focus on amplitude anomalies within structural closure in the Miocene and Pliocene. Their first well was plugged and abandoned in October 2009 where the targeted Miocene slope fan sands were of poor reservoir quality. In their D4 Block, three drilling locations have been selected to target multiple reservoirs in a deep-water fan system.

ONGC is also hoping to increase the current in-place resource (6.5 Tcf) of its KG deep water blocks through a committed appraisal program. They are seeking to develop both the Northern Discovery Area (3 Tcf) and the Southern Discovery Area (3.4 Tcf) of the KG-DWN-98/2 block – the southern part concentrating on the development of its UD-1 ultra deep water gas discovery, which lies in a water depth of 2,840m.

The recent discoveries have brought in several international E&P companies new to the area, including BG, BP, Eni, Petrobras, Santos and StatoilHydro – most of whom gained a foothold on the east coast through farm-in deals and asset swaps with ONGC. Results have been mixed, with BG, Petrobras and StatoilHydro pulling out of some of their deep water holdings, which could represent a setback for ONGC and its plans for developing a string of discoveries.  


Seismic line showing slope fan prospects in the Krishna-Godavari Basin. Image: GX Technology Offshore Bangladesh sits the great Bengal Fan and the Bengal Basin. Exploration efforts to the west in India have been discouraging in the basin and offshore leasing has been hindered by maritime boundary disputes with both India and Mymamar.

Bangladesh has only one producing field in the Bay of Bengal – the Sangu Field operated by Cairn Energy (Capricorn Energy), which is on decline and producing just 35 MMcf/d. The offshore, however, remains a vastly under-explored landscape, with only 17 new field wildcats in an offshore area covering 63,000 km². Cairn and recent joint venture partner, Santos, were responsible for the drilling of two multi-Tcf prospects (Magnama 3.5 Tcf, Hatia 1.0 Tcf) surrounding the Sangu Field in late 2007/early 2008, but both were disappointing and require further appraisal. Magnama 1 encountered a number of thin, normally pressured gas bearing sands (20-40m) which may thicken on the flanks of the structure, while Hatia 1 found non-commercial volumes of hydrocarbons and was suspended pending possible re-entry after evaluating the up-dip potential.  

The Bangladesh Government finally launched its long-awaited Third Licensing Round in February 2008 – a total of 28 offshore blocks (20 deep water, 8 shallow water) extending up to 200 nautical miles into the Bay of Bengal being offered for competitive bidding. A Fourth Licensing Round, expected in 2011, will include onshore acreage and offshore blocks not taken up in the Third Round.

Two deep water blocks in the Central Bay Area and one shallow water block alongside the Bangladesh-India maritime boundary were awarded respectively to ConocoPhillips, which signed in October this year, and Tullow, but only on the condition that neither company undertakes exploration in any internationally disputed maritime area until the dispute is resolved. No PSC has been signed for any of the blocks yet – they have only been approved for award.


The D9 Block prospect map and location of the first well to be drilled. The block is highlighted in yellow on the map. Image: Hardy Oil and Gas The last piece of the Bay of Bengal pie goes to Myanmar, whose oil industry dates back to the 19th Century when the Burma Oil Company started producing oil from the Yenangyaung Field in 1887. Yearly production primarily from three onshore basins peaked at 11.2 MMbo during 1984-1985. Now, major exploration and production activities concentrate on the offshore basins, with production of gas for export beginning in 1998 from the Yadana Field. A second major gas field, Yetagun, came online in 2000.

Myanmar’s prospective offshore basins are located in a fore-arc/back-arc setting with the Andaman basin separated from the rest of the Bay of Bengal by an island arc system, contrasting with the passive rift basins off of east India. For a detailed overview of the Myanmar fore-arc basins see GEO Expro Vol. 7, No. 5, pp. 30-34.

While a number of exploration campaigns were conducted offshore Rakhine Basin in the 1970s, it was South Korean company, Daewoo International Corporation who unlocked the potential of this previously non-producing basin. They drilled a deep marine turbidite, Plio-Pleistocene play, resulting in the Shwe (2003), Shwe Phyu (2005) and Mya (2006) discoveries. The in-place resource of the Shwe structure is estimated to be 3.5-5.5 Tcf, while the northern, smaller Shwe Phyu has an in-place resource of 0.5-1.2 Tcf. The southern Mya structure is estimated to have an in-place resource of 1.8-3.4 Tcf. These were the first major discoveries since the Yetagun gas find, 12 years earlier. The company is continuing to explore the area with mixed results.

As a result of Daewoo’s success in opening up the Rakhine Basin, virtually all offshore western Myanmar is now under license to international E&P companies, including CNOOC, CNPC, Daewoo Petroleum, and ONGC Videsh Ltd.

Unresolved future

Near Bangladesh’s only producing field in the Bay of Bengal, drilling of the Magnama prospect was disappointing. New 3D seismic is being evaluated for a 2011 drilling campaign in the area. Courtesy: Cairn Energy Recent discoveries in both India and Myanmar point to a promising exploration future for the Bay of Bengal, a future that is burdened with both sub-surface and above ground challenges. The lack of an internationally recognised maritime boundary between India-Bangladesh and Bangladesh-Myanmar is beginning to have a major impact on exploration efforts. The situation between these three energy-starved countries has escalated and intensified in recent years as both India and Myanmar have rushed headlong into offering offshore areas for oil and gas exploration. The recent high profile discoveries in both countries have attracted many international E&P companies to the region, pointing even more for the need to establish officially recognized maritime boundaries.



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