Dhaka, May 2: Calgary, Canada-based oil and gas company Niko Resources may leave Bangladesh through a dubious deal with an Arab oil firm without resolving the Tengratila blowout compensation case.
A section of officials of the energy division, Petrobangla and the Prime Minister’s Office (PMO) is playing a significant role to facilitate Niko’s exit, it has been learnt. “A strong lobby, led by an adviser, is behind the moves. This adviser had earlier played a vital role in giving an 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 a couple of days,” a senior official of the energy ministry said. “It is a hasty move. We don’t know what happened in the last one week. However, we have sent the letter to Petrobangla and asked them to reply,” a senior official of the energy ministry told The Independent. Petrobangla officials confirmed that they had indeed received such a letter from the ministry.
Preferring anonymity, a senior official of the energy ministry alleged that a section of officials connected to the energy ministry, Petrobangla and the PMO were working on the file just to allow the company to leave the country.
Energy ministry sources said an Arab oil and gas company recently sent a proposal to the energy ministry expressing its willingness to buy Niko’s stake in Bangladesh.
“All negotiations were carried out abroad, which is a regular practice in the energy sector. However, the energy ministry’s approval is needed to complete the process as there is litigation,” the official said.
The Arab company is keen to buy all the stakes but does not wish to share Niko’s liabilities, he added.
According to the energy ministry, if the government allows this, then Bangladesh may fail to cash in on the compensation scheme as Niko will no longer exist here.
Following the Tengratila blowout, experts found that the company’s negligence caused two blowouts in 2005, causing substantial loss of gas and environmental damage.
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 until the claim for damages in Tengratila was settled.
Petrobangla and Bangladesh Petroleum Exploration and Production Company Limited (BAPEX), the joint defendants in the ICSID suit, initially instructed Dr Kamal Hossain and Associates to represent Bangladesh.
“Letters signed by Dr Hussain Monsur, chairman of Petrobangla, Mortuza Ahmad Faruque, managing director of BAPEX, and Mohammad Mejbahbuddin, the then secretary of the energy division, were sent to ICSID in July 2010, declaring that Dr Kamal Hossain would represent the country. However, within a month, the decision was reversed, and Dr Kamal Hossain and Associates were replaced with the law firm Juris Counsel, headed by Advocate Tawfique Nawaz. Nawaz, incidentally, is the husband of foreign minister Dipu Moni,” a senior official said.
“Many analysts have questioned the decision. They claimed that the firm Juris Counsel and Advocate Tawfique Nawaz do not have the requisite qualifications to replace Dr Kamal Hossain. However, we now understand why it has happened. This has occurred even though Dr Kamal Hossain wants to represent the state without a fee,” he added. 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, went against the interests of the country and was mired in “corruption”.
Niko Resources has pleaded guilty to bribing a Bangladesh minister and will pay nearly CAD 9.5 million in fines and penalties.
-with The Independent input
