Tengratila Blowout: Bangladesh to receive $42m compensation from Niko
Staff Reporter :
Bangladesh has secured a $42 million compensation award from Canadian multinational oil and gas company Niko after winning a long-running legal battle at an international arbitration tribunal over the Tengratila gas field blowout.
An official of Petrobangla said that the Washington-based International Centre for Settlement of Investment Disputes (ICSID) delivered the final verdict, ordering Niko Resources to pay the compensation for the 2005 Chhatak gas field disasters.
Petrobangla Chairman Engineer Rezanur Rahman confirmed the ruling to the media on Thursday night, stating that Bangladesh would receive $42 million—equivalent to Tk 516 million at the current exchange rate of Tk 123 per dollar.
According to the tribunal’s observations, the blowouts were caused by Niko’s mismanagement and its failure to comply with internationally accepted petroleum industry standards.
“After years of legal proceedings, Bangladesh has achieved a final victory in the international court over the Tengratila gas field explosion in Chhatak, Sunamganj,” a Petrobangla official said.
Niko was awarded the contract to explore gas in the Tengratila field in 2003. However, due to operational inefficiency and negligence, two major explosions occurred on January 7 and June 24, 2005.
The resulting fires burned nearly eight billion cubic feet of gas, causing extensive environmental damage and devastation to nearby localities.
Petrobangla later demanded Tk 746 crore in compensation, which Niko refused to pay, prompting Bangladesh to take the dispute to international arbitration.
Petrobangla Chairman Engineer Rezanur Rahman said the authorities had been awaiting the final verdict and added that a Development Project Proposal (DPP) for drilling new wells in the Chhatak gas field had already been prepared. “Further steps will be taken promptly after consultations with our legal team,” he said.