Bangladesh wins case against Niko over Tangratila blowout

A delegation of US consultants examines surface of Tengratila gas field area to assess the damage in 2016. Prothom Alo File Photo

Bangladesh has won a case filed with the International Centre for Settlement of Investment Disputes (ICSID) against Canadian company Niko Resources for the blowout in Tangratila Gas field at Chhatak, Sylhet on January 7, 2005.

State minister for power, energy and mineral resources Nasrul Hamid disclosed the verdict of the Washington-based arbitration court through an online videoconference from his home, reports UNB.

The verdict was released on 28 February this year.

We've won the award of ICSID. Our claim was established in the international court that Niko was responsible for the blowout
Nasrul Hamid

"We've won the award of ICSID. Our claim was established in the international court that Niko was responsible for the blowout," he told reporters.

He mentioned that Bangladesh submitted a claim for a total loss of over US$ 1 billion as part of the government's loss and also of Bapex, a Petrobangla subsidiary.

However, Anisur Rahman, senior secretary of the energy division, who took part in the videoconference, said it will not be possible to realise the amount from the Niko Resources as the company has already been declared bankrupt.

"But Bangladesh's benefit in the win of the case is that the country would not need to pay Niko $30 million against the purchase of its share of gas," he said adding that Bangladesh also seized Niko's resources at gas block 9 which the company would not be able to sell out following this verdict.

Niko was trying to sell out the block 9 to a third party but Bangladesh government seized the resources, he said.

Local lawyer Monin Gani, who fought the case in favour of Bangladesh government and Petrobangla, said it will take about a year to fully settle the case as the ICSID tribunal has established through it the initial verdict that Niko was responsible for the blowout as it failed to maintain international standard in its drilling works.

"Now, at the second stage of the case, the international court will ascertain the amount of the loss as we submitted our claim of financial loss," he said.

Bangladesh claimed a loss over $1 billion of which the government's loss is $896 while Bapex's loss is $118 million in the blowout of the gas field.

Moin noted that Bangladesh will submit additional loss-claim for the damage to environment and the health of people living in the gas filed area.

He said an expert team has been working to ascertain the losses to the environment of the area and the health of people.

Niko was appointed by state-owned Petrobangla as developer of the Tangratila gas filed in joint venture with state-owned Bapex in 2003.

During the exploration drilling, the gas field blew out twice causing a huge damage to the field.

Since then, the activities of the field remained suspended while a case was also filed against Niko with a local court.

But Niko moved the ICSID to get a relief from its responsibility for blowout in the gas field.

Through this verdict, ICSID held the Niko responsible for the blowout, said Moin.