Bapex moves to drill gas wells awarded to Niko

M AZIZUR RAHMAN | Published: October 03, 2020 23:04:41

The government has moved to develop and drill the potential and 'abandoned' gas wells which were awarded to Canadian Niko Resources around a couple of decades back.
State-run Bangladesh Petroleum Exploration and Production Company, or Bapex, will develop the wells to initiate natural gas production, energy secretary Md Anisur Rahman told the FE recently.
He said Bapex will drill the wells which were awarded to Niko Resources.
The country's lone oil and gas exploration company, Bapex, will also develop the 'virgin' area of Chhatak gas field, said Mr Rahman.
Niko's exploration job in Bangladesh stopped following two consecutive blowouts at Chhatak gas field, also known as Tengratila field, in 2005.
After over a decade of trial, the International Centre for Settlement of Investment Disputes, or ICSID, in its verdict has recently made Niko liable for the two consecutive blowouts.
Niko Resources had attained operator ship of the Feni field under the terms of a 2003 joint venture agreement (JVA) with state-run Bapex which gave it an 80 per cent stake.
The remaining 20 per cent went to Bapex.
The company also had attained exploration rights over three onshore gas fields -- Feni, Chhatak and Kamta -- following the JVA as the fields were then declared 'abandoned' by Petrobangla.
Niko succeeded in striking the JVA without any competitive bidding.
Apart from the JVA, Niko along with Singapore's KrisEnergy and Bapex was also involved in a production sharing contract, or PSC, for block 9 in Bangladesh, where KrisEnergy is the operator.
The Bangladesh government, however, already seized assets worth around US$300 million of Canadian oil and gas firm Niko Resources Ltd of block 9 in Bangora gas field.
The Ministry of Power, Energy and Mineral Resources, or MPEMR, is preparing a final set of documents to place it to the international dispute settlement body for realising compensation from Niko as Bangladesh has won the case filed with the ICSID.
The ICSID verdict was delivered on February 28 this year.
Bangladesh had submitted a claim for a total loss of US$1.014 billion to the ICSID, of which $896 million as the loss of government and $118 million as the loss of Bapex.
In the final claim, Bangladesh will add losses of environmental and human health, which will add up the overall compensation claims, said a senior MPEMR official.
Bangladesh's chance to realise fund from Niko is, however, bleak as the Canadian company has already been declared 'bankrupt.'
But Bangladesh's benefit is that the country would not need to pay Niko around $30 million for Feni gas, the energy secretary said.
Azizjst@yahoo.com