Hearing on Petrobangla-Chevron dispute deferred by 5 months
Thursday, 4 December 2008
The hearing on the dispute between the state-owned Petrobangla and the US-based oil company Chevron over four per cent wheeling charge has been deferred by five months, reports UNB.
According to official sources, the hearing will now be held on May 18 next year at the World Bank's international arbitration court in Washington.
The hearing was deferred on Chevron's request to the arbitration court - International Centre for Settlement of Investment Dispute (ICSID) in Hague.
After an initial hearing in August, (ICSID) had set December 1-5 for hearing of the Bangladesh's statement on Chevron's claim for four per cent tariff payback on hydrocarbon business.
Dr Kamal Hossain on behalf of Bangladesh made a submission on the issue on August 5.
The matter of four per cent payback on account of wheeling charge is a longstanding issue between the two sides in the gas-exploration business. Chevron has been claiming the payback by the Petrobangla, saying that its deduction from the gas purchase bill is illogical.
The US company argued that the wheeling charge is applicable only if it uses Petrobangla's pipeline to supply gas to other parties. But it does not do so. Rather, Chevron has been supplying gas from three gasfields - Jalalabad, Moulvibazar and Bibiyana - only to Petrobangla.
Refuting Chevron's claim Petrobangla contended that the deduction is justified as per the production sharing contract (PSC). Initially, both the parties tried to resolve the issue through negotiation, but finally they agreed to go for international arbitration.
According to the Petrobangla officials, in the event of defeat it will have to pay back about $40 million, the amount it has deducted from Chevron as wheeling charge.
According to official sources, the hearing will now be held on May 18 next year at the World Bank's international arbitration court in Washington.
The hearing was deferred on Chevron's request to the arbitration court - International Centre for Settlement of Investment Dispute (ICSID) in Hague.
After an initial hearing in August, (ICSID) had set December 1-5 for hearing of the Bangladesh's statement on Chevron's claim for four per cent tariff payback on hydrocarbon business.
Dr Kamal Hossain on behalf of Bangladesh made a submission on the issue on August 5.
The matter of four per cent payback on account of wheeling charge is a longstanding issue between the two sides in the gas-exploration business. Chevron has been claiming the payback by the Petrobangla, saying that its deduction from the gas purchase bill is illogical.
The US company argued that the wheeling charge is applicable only if it uses Petrobangla's pipeline to supply gas to other parties. But it does not do so. Rather, Chevron has been supplying gas from three gasfields - Jalalabad, Moulvibazar and Bibiyana - only to Petrobangla.
Refuting Chevron's claim Petrobangla contended that the deduction is justified as per the production sharing contract (PSC). Initially, both the parties tried to resolve the issue through negotiation, but finally they agreed to go for international arbitration.
According to the Petrobangla officials, in the event of defeat it will have to pay back about $40 million, the amount it has deducted from Chevron as wheeling charge.