Rejoinder (2020-10-08)

The Ministry of Energy, Power, and Mineral Resources has contradicted a news report published in the FE on October 4, 2020 titled 'BAPEX moves to drill gas wells awarded to Niko.'

The ministry in a rejoinder has stated that in the report the senior secretary of the Energy and Mineral Resources Division Md Anisur Rahman has been misquoted as saying 'BAPEX will drill wells awarded to Niko Resources.'

Neither BAPEX nor the government of Bangladesh has taken any decision to start drilling operations at the Chattak gas fields, it clarified, saying Mr Rahman never gave any statements to the FF stating that BAPEX was in the process of drilling fields awarded to Niko.

Currently there remain several disputes between Niko Resources and the various government organs including BAPEX, Petrobangla, and the government of Bangladesh, it said.

There are two pending arbitration cases before the World Bank's International Centre for the Settlement of Investment Disputes (ICSID).

In addition, there are cases pending against Niko Resources in the courts of Bangladesh as well.

In this situation, unless the disputes are resolved, there arises no question of BAPEX drilling wells which were once awarded to Niko Resources.

The matter is sub judice, the rejoinder said.

Besides, the blowouts in 2005 have created significant safety concerns over any future drilling operations.

This is why BAPEX made the hiring of an outside consultant to supervise any work done by Niko, a condition of further operations. BAPEX understood that Niko was not competent to carry out further operations on its own and questioned whether Niko should continue as operator of the Chattak field in light of its negligence in causing a blowout when drilling the Chattak 2 well and the blowout during relief operations.

The ICSID arbitration tribunal has now determined that Niko breached the JVA, or joint venture agreement, when drilling the Chattak 2 well and thus confirmed BAPEX's conclusion regarding Niko's lack of competence.

The Chattak area will only be developed if and when it can be done safely, economically and by a competent operator, the rejoinder said.

Neither the Government nor BAPEX has even taken a decision to drill and develop any well, let alone conducting operations at Chattak, it said in further clarification.

Regarding Niko's shareholding interests in Block-9 PSC, those were attached and seized, not by the government but by a judgment dated November 19, 2017 issued by High Court Division in the Writ Petition No. 5673 of 2016.

Niko has appealed against that judgment and the matter is now pending before the Appellate Division of the Supreme Court, the ministry stated.