Canadian energy company Niko Resources has been ordered to pay USD 42 million to Bangladesh's state-owned oil and gas corporation Petrobangla, following a verdict by the International Centre for Settlement of Investment Disputes (ICSID) over the devastating gas blowouts at the Tengratila Gas Field in Sylhet.
The ruling stems from two major blowouts at the Tengratila (Tangratila) gas field in Chhatak, Sunamganj, which occurred on January 5 and June 24, 2005, causing extensive loss of natural gas and environmental damage. The incidents were blamed on negligence during drilling operations supervised by Niko.
Petrobangla Chairman Rezaur Rahman confirmed the verdict on Thursday, stating that ICSID directed Niko to pay $42 million for the loss of approximately 8 billion cubic feet of gas, along with an additional $2 million for environmental damage to the gas field and surrounding areas.
* Compensation covers 8b cubic feet of lost gas and environmental damage
* 2005 Tengratila gas field disaster blamed on negligence
* Bangladesh claimed over $1.05 billion in damages
* Tribunal says Niko breached international industry standards
Bangladesh had initially sought over $1.05 billion in compensation, citing massive losses to gas reserves, damage to the environment, and additional government expenditure on gas procurement from alternative sources due to the inability to extract gas from Tengratila.
According to senior Petrobangla officials, Bangladesh presented detailed arguments and supporting documents during the ICSID hearings to establish various "heads of loss" arising from the blowouts. A seven-member Bangladeshi panel participated in the proceedings, which were administered from Washington, DC.
In March 2016, Bangladesh formally filed its claim before ICSID, seeking $118 million for BAPEX (Bangladesh Petroleum Exploration Company) and $896 million for Petrobangla and the state, based on assessments conducted by international experts.
The tribunal held Niko responsible, noting that the blowouts occurred under its direct arrangements and supervision. It ruled that the company failed to conduct operations diligently and in accordance with international petroleum industry standards.
Earlier, Petrobangla's lawyer Barrister Moin Ghani said the tribunal found Niko liable for the gas that escaped during the two blowouts and ordered compensation for the direct losses suffered by BAPEX.
Following the verdict, Petrobangla submitted its memorial to the tribunal to obtain the final award. Meanwhile, the Bangladesh government has engaged US-based law firm Foley Hoag LLP to further assess loss and damage issues related to the Tengratila disaster.
