Chevron raises gas production by 11 pct in Bangladesh

DHAKA, Jan 11 (Reuters) - U.S. energy major Chevron (CVX.N) has raised natural gas production in Bangaldesh by more than 11 percent to about 500 million cubic feet (mmcf) per day to meet shortages, a senior official said on Sunday.

Bangladesh faces shortages of upto 250 mmcf per day, leaving it unable to supply hundreds of newly-built manufacturing firms.

"We have asked them to produce more gas from Bibiyana field to meet rising demand," said Jalal Ahmed, chairman of the state-run Bangladesh Oil, Gas and Mineral Corporation or Petrobangla.

Some experts have suggested that production from current proven reserves of 2.51 trillion cubic feet at the field should not exceed the present quantum of 450 mmcf per day.

"As per the contract with Chevron, the firm may extract 497 mmcf per day," Jalal told Reuters.

He said that the government was pressing Petrobangla to produce up to 600 mmcf per day but it had not agreed.

"Such over extraction would result in damage to the reservoir of one of the country's largest gas reserve," said an expert who asked not to be identified.

Chevron said on Sunday the Bibiyana field had produced better than expected since its start-up in March 2007, indicating that field was likely to be bigger than originally thought.

The firm said an assessment of reserves by a third party indicated reserves were much higher than the initial assessment, conducted in 2000 before the field was developed.

Bangladesh, with 13.54 trillion cubic feet of proven and recoverable gas reserves, can now supply up to 1,800 mmcf of gas daily against a daily demand of 2,050 mmcf, officials said.

(Reporting by Serajul Islam Quadir; Editing by David Cowell)