Bangladesh: Niko barred from selling assets in Bangladesh

Dhaka, July 8 (New Age): The International Centre for Settlement of Investment Disputes on Sunday barred Niko Resources, a Canadian oil company, from selling its assets in Bangladesh until the disputes with ICSID were settled, officials said. The international arbitration court asked Niko to give an undertaking that the company would not sell its assets in Bangladesh, Petrobangla secretary Imam Hossain told New Age. He said that the ICSID had also deferred its ruling on the dispute over Niko’s demand for $27 million with a 12 per cent interest from Petrobangla until the arbitration court settles the issue of Petrobangla’s claim of $106 million or Tk 746 crore in damages from Niko. Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, withheld payment of $27 million for the gas Niko had supplied from Feni field on a court order after Niko refused to pay compensation for the twin blow-outs in 2005 in Tengratila gas field at Chhatak. The government in June 2008 filed a damage suit with a Dhaka court against Niko, claiming Tk 746 crore in compensation for destruction of property and gas reserves in and around Tengratila field in Sunamganj after the company refused to pay the government any amount. The High Court, in its verdict on November 17, 2009 in a separate writ petition, directed the government not to pay Niko for the gas that Petrobangla had been purchasing from the Feni gas field since 2004, until disposal of the government’s case or until Niko and the government reached a settlement over the issue of compensation. Later, Niko lodged two allegations with the ICSID claiming $27 million in gas bill and an exemption from paying compensation for the blowouts in Tengratila gas field. Meanwhile, Niko tried to sell its shares in Bangura gas field in Bangladesh to a Kuwaiti company, Imam said. In response, he said that Petrobangla had filed a case with joint district judges’ court which stayed Niko’s move to sell its assets. An expert committee formed by the energy ministry held Niko responsible for two successive blowouts in Chhatak gas field, locally known as Tengratila field, in early 2005. The committee estimated the damage of oil and gas resources caused by the two blowouts at Tk 746 crore or $106 million. Meanwhile, Bangladesh Environment Lawyers Association filed a public interest litigation with the High Court against Niko and took out an injunction against payment of gas bills to the company by Petrobangla until the compensation issue was settled. Petrobangla had withheld $27 million in payment of gas bill to Niko before the Canadian firm stopped gas production from Feni field in May 2010. Niko on June 24, agreed to pay nearly $9.5 million in fines and penalties after admitting in the Alberta Court in Canada that it had bribed AKM Mosharraf Hossain, the then state minister for energy ministry, to escape from paying compensation for the damages. Mosharraf resigned in June 2005 after the media in Bangladesh revealed that Niko had given him a Toyota Land Cruiser-Signus 2005. On January 10, 2014, the Department of Justice of Canada wrote to the Bangladesh attorney general with a request to allow Royal Canadian Mounted Police to interrogate former prime minister Khaleda Zia’s energy adviser Mahmudur Rahman, also acting Amar Desh editor now in jail, and the then foreign minister M Morshed Khan as witnesses to confirm whether or not Khaleda was involved in Niko graft case.