Canadian oil firm Niko will have to pay US$ 1.0 billion as compensation to Bangladesh as a global dispute settlement body has made the firm liable for two consecutive gas field blowouts at Tengratila in northeastern Chhatak gas field in 2005.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid came up with the statement at a videoconference with journalists from his residence on Sunday, reports BSS.
“The verdict came in favour of Bangladesh after long 10 years,” the junior minister said.
According to the International Centre for Settlement of Investment Disputes,(ICSID) verdict, the Canadian oil firm Niko is liable for two consecutive blowouts due to negligence and inefficiency, Nasrul said.
“Message is clear through this verdict that no company will be able to do whatever it wishes in Bangladesh,” he stated.
The state minister said the settlement is scheduled for next September, but it will be delayed due to the ongoing Novel coronavirus situation (COVID-19).
The state-run Petrobangla, in its compensation claim to the centre against Niko Resources Ltd in 2016, had sought around US$ 1.0 billion, or Tk 85 billion, for the gas field blowouts.
In 2008, the government had lodged a money suit with the court of Dhaka joint district judge against the Niko and thus claimed Tk 7.46 billion, or $106 million as compensation against the blowouts.
The ICSID verdict means that the Niko will have to pay compensation to the state-run Petrobangla for its sloppy or inefficient drilling at the Chhatak gas field.
Barrister Moin Gani, who moved the case for Petrobangla and the state-run Bangladesh Petroleum Exploration and Production Company (Bapex), expected that Bangladesh will get over $1 billion as compensation of which Bapex will get $ 118 million while Petrobangla $ 896 million.
Apart from this, the court has also directed to submit assessment report on health affect and environmental loss, which would further increase the losses, he said.
Earlier, Niko lodged two separate cases with the ICSID on April 12 and June 16 in 2010 to realise dues and get rid of the blowouts.
