Bangladesh has decided to accept the ruling of the International Centre for Settlement of Investment Disputes (ICSID), which fixed compensation at US$42 million in the long-running arbitration over the Tangratila gas field blowout in Sylhet, closing the door on a claim that had initially sought nearly US$1 billion.
Officials said the government will not file any review or further submission, even though the deadline for legal action remains open until April 17, 2026. The Energy Division has instructed Petrobangla and Bangladesh Petroleum Exploration and Production Company (BAPEX) to proceed in line with the tribunal's decision.
A senior Energy Division official confirmed the position, saying the state has opted not to extend the dispute further. Petrobangla Chairman M. Erfanul Haque said internal and external legal assessments had weighed heavily on the decision.
According to him, Petrobangla's legal wing consulted international law firms Foley Hoag LLP of the United States and White & Case LLP of the United Kingdom, both of which indicated limited prospects for success in any further challenge.
"We discussed the matter with the firms and sent their opinion to the Energy Division. The Energy Division forwarded it to the Law Ministry, which suggested obtaining a third-party opinion on the future course of action. We complied and submitted all documents," Haque said.
Officials said the legal advice ultimately painted a "gloomy picture" regarding the chances of overturning or improving the award, prompting the decision to let the matter rest.
The dispute stems from the 2003 joint venture between Niko Resources (Bangladesh) Ltd - a subsidiary of Canada-based Niko Resources - and BAPEX to develop gas fields in Feni and Chhatak. Under a separate agreement, Petrobangla had committed to purchasing gas from the Feni field.
However, operations at the Tangratila gas field in Chhatak turned disastrous in 2005 when a drilling well blew out in January, followed by a second explosion in June. The incidents caused severe environmental damage, loss of life, and widespread disruption in the surrounding area.
A government inquiry later found serious deficiencies in Niko's drilling practices, leading Petrobangla to file a lawsuit seeking compensation for losses estimated at over US$1.05 billion.
Niko Resources subsequently initiated arbitration at ICSID, challenging its liability. The tribunal later held the company responsible for the blowouts, marking a key legal victory for Bangladesh.
In February 2020, Bangladesh won the first phase of the case, with the tribunal affirming Niko's responsibility. A subsequent ruling on January 29, 2026, upheld Bangladesh's claim on "loss and damage," but fixed compensation at a significantly lower amount than sought.
With the latest decision, the government has now moved to close the chapter on further legal escalation, instructing state entities to align with the ICSID award.
