The International Centre for Settlement of Investment Disputes (ICSID) has ordered Canadian company Niko Resources to pay $42 million in compensation for the January 2005 explosion at the Tengratila gas field in Chhatak, Sylhet.
Petrobangla Chairman Rezanur Rahman confirmed the development to TIMES of Bangladesh, saying the state-run corporation has received a synopsis of the verdict from its attorney and is reviewing it.
Petrobangla sought compensation during the years-long hearings for losses linked to damage to the gas field, nearby installations, gas reserves and the environment.
Although Bangladesh had placed a much larger claim of more than $1 billion, the tribunal directed Niko to pay $40 million for the burning of around 8 billion cubic feet of gas. The company must also pay an additional $2 million for environmental damage to the gas field and surrounding areas.
The Tengratila blowouts occurred in two phases, first in January 2005 and again in June the same year, causing extensive destruction and raising concerns over environmental and health impacts. A government probe later found faults in Niko’s drilling procedures.
Bangladesh pursued legal action against the company domestically and secured local court orders in 2009 to confiscate all of its assets, while also halting payments for gas supplied from the Niko-operated Feni field until compensation was settled.
Niko filed two cases with ICSID seeking to avoid liability and recover payments. Its claim to be absolved of responsibility was dismissed in 2013, while proceedings over gas payments were stayed pending resolution of the compensation dispute.
The latest order is seen as a significant recognition of Niko’s responsibility in the Tengratila disaster, which remains one of the country’s most damaging gas field incidents.
