Staff Reporter:
The International Centre for Settlement of Investment Disputes (ICSID) has ordered Canada-based Niko Resources Ltd to pay $42 million to Bangladesh as compensation for the 2005 explosion at the Tengratila gas field in Sunamganj.
The US-based arbitration institution, part of the World Bank, said the explosion was caused by Niko’s operational negligence, making the company liable to pay compensation.
The verdict was delivered recently, confirmed Petrobangla Chairman Md Rezanur Rahman on Thursday.
Petrobangla officials discussed the verdict on Wednesday, and has decided to seek legal consultations through the energy ministry to collect the fine from Niko, which no longer operates in the country.
Petrobangla has also decided to restart gas extraction from the Tengratila gas filed, Md Rezanur Rahman told reporters.
A Development Project Proposal (DPP) has already been prepared for digging a new well in the gas field, the Petrobangla chairman added.
The Tengratila gas filed was first discovered in 1959, and nine layeres of natural gas were detected the following year. However, due to the presence of water the extraction works were halted.
In 2003, the government awarded a contract to Niko to rediscover gas and resume production activities. In early 2005, during the drilling process, two major explosions rocked the gas field, burning a large amount of gas reserves and damaging nearby facilities.
An estimated eight billion cubic feet of gas was burnt and wasted in the explosions. However, around 2.5 trillion cubic feet of gas still remains in the gas field, Petrobangla estimates.
Petrobangla demanded Niko pay Tk746 crore as compensation, but the Canadian company declined to oblige.
Petrobangla later sued Niko at a lower court and at the High Court. Both courts ruled in favour of the state-backed company, but the legal hurdles continued.
Then, Petrobangla filed a lawsuit with ICSID, which gave its verdict on the matter.
