The government has decided to settle the litigation relating to the Tengratila gas blowout case before allowing Niko, the Calgary, Canada-based oil and gas company, to hand over its assets to Kuwait Foreign Petroleum Exploration Company (KUFPEC). Taking the political situation of the country into account, senior officials and leaders of the government feel that the “present time is not favourable for handling the issue in a proper manner, so the issue should be put in ‘red tape’,” authoritative sources told The Independent.
Government high-ups, at a policy-level meeting on Thursday, observed that “the issue is highly politically sensitive”, but did not cancel the proposal or decide to send any letter to KUFPEC in this connection.
This decision was taken at a policy-level meeting yesterday at the secretariat, chaired by the energy and mineral resources division secretary Md Mozammel Haque Khan, and attended by the Prime Minister’s power and energy adviser Dr Tawfiq-e-Elahi Chowdhury, state minister for power and energy Muhammed Enamul Huq, Petrobangla chairman Prof Hossain Monsur and other senior officials.
The government and the Bangladesh Environmental Lawyers’ Association (BELA) filed two separate lawsuits in Bangladeshi courts after a probe committee determined that Niko should pay Bangladesh Tk. 746 crore in compensation. The High Court ordered the government to withhold payment for gas from the Feni field until the Tengratila dispute was settled.
In April 2010, Niko Resources filed a case against Bangladesh with the International Centre for Settlement of Investment Disputes (ICSID), contesting its liability in the Tengratila gas explosion of 2005. It also filed another arbitration suit challenging Bangladesh’s decision to withhold payments on gas produced from the Feni gas field till the claim for damages in Tengratila was settled.
Niko wants to leave Bangladesh through a dubious deal with the Arab oil company without settling the Tengratila blowout compensation case.
According to sources in the energy ministry, a syndicate has been trying to convince the government to allow Canadian company Niko Resources Limited to hand over its assets to KUFPEC without paying compensation, even though the lawyers’ panel of Petrobangla categorically said it was “unlawful” as litigation is going on.
For the last six months, the energy ministry and Petrobangla have been working on the file along with officials of the law ministry to make provisions to implement this.
“A strong lobby led by an adviser is behind this. The adviser had earlier played a vital role in giving entry visa to Niko to do business here. On April 29, the energy ministry wrote a letter to Petrobangla to provide a status report on Niko’s joint venture agreement (JVA) and all legal issues to the ministry within two days,” a senior official of the energy ministry said.
Following the Tengratila blowout, experts determined that the company’s negligence caused two blowouts in 2005, causing substantial loss of gas and environmental damage.
Niko obtained permission to develop the Tengratila (Chattak) and Feni gas fields after they were declared “abandoned”. An inquiry in 2005 found that the framework of understanding, which was signed in 1999 and based on which the joint venture agreement was signed, was against the interests of the country and was mired in “corruption”.
Calgary-based oil and gas company Niko Resources has pleaded guilty to bribing a Bangladesh minister and will pay nearly CAD 9.5 million in fines and penalties.
Bangladesh lodged a case in a local court against Niko Resources Limited in June 2008 under joint venture agreement (JVA) and claimed Tk. 7,465 million as compensation for the blowout incident at Chattak gas field in 2005. The government also stopped payment of around CAD 34,000,000 to Niko as per a local court directive.
Besides, Petrobangla lodged another case against Niko Resources Limited at ICSID in 2010. The judgment is expected anytime in June.
Niko filed separate cases against Petrobangla seeking payment on gas produced in the Feni gas field.
Petrobangla said it has no objection to the transfer of the shares of Niko Resources Limited if KUFPEC assumes responsibility for payment of compensation. The matter is pending in the international court at present, Petrobangla chairman Prof. Hossain Monsur informed the Energy and Mineral Resources Division (EMRD).
In a letter to EMRD on April 29, Prof. Hossain Monsur said, “The share on block no-9 is transferable if KUFPEC takes all the responsibilities of Niko.”
Earlier, the EMRD had sought the opinion on block no-9 and the share transfer from Niko Resources Limited to KUFPEC.
KUFPEC then informed the government that it bought Niko’s shares without assuming any liabilities, official sources said.
Earlier, the government had been deprived of compensation in connection with the Magurcharra gas blowout as shares were handed over from the Occidental Petroleum Corporation to Unocal Corporation and then Chevron.
-With The Independent input
