The International Centre for Settlement of Investment Disputes on Sunday barred Niko Resources, a Canadian oil company, to selling its assets in Bangladesh until the disputes with ICSID is settled, officials said.
The international arbitration court asked Niko to give undertakings that the company would not sell its assets in Bangladesh, Petrobangla secretary Imam Hossain told.
He said that the ICSID also deferred its ruling over the dispute about Niko’s demand of $27 million with a 12 per cent interest from Petrobangla until the arbitration court settles the issue of Petrobangla’s claim of $106 million or Tk 746 crore in damages from Niko.
Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, stopped paying Niko for the gas of Feni field, operated by the company, worth $27 million following a court order after Niko refused to pay compensation for the twin blow-outs in 2005 at Tengratila gas field in Chhatak.
The government in June 2008 filed a damage suit with a Dhaka court against Niko, claiming Tk 746 crore in compensation for destruction of property and gas reserves in and around Tengratila field in Sunamganj after the company refused to pay the government any amount.
The High Court, in its verdict on November 17, 2009 in a separate writ petition, directed the government not to pay Niko for the gas that Petrobangla had been purchasing from the Feni gas field since 2004, until disposal of the government’s case or until Niko and the government reached a settlement over the issue of compensation.
Later, Niko lodged two allegations with the ICSID claiming $27 million in gas bill and an exemption from paying compensation for the blowouts in Tengratila gas field.
Meanwhile, Niko tried to sell its shares in Bangura Gas Field in Bangladesh to a Kuwaiti company, Imam said.
In response, he said that Petrobangla filed a case with joint district judges’ court and the court stayed the Niko’s move of selling its assets, he said.
An expert committee formed by the energy ministry held Niko responsible for two successive blowouts in Chhatak gas field, locally known as Tengratila field, in early 2005.
The committee assessed Tk 746 crore or $106 million in damages of oil and gas resources in the field due to two blowouts.
Meanwhile, Bangladesh Environment Lawyers Association brought public interest litigation against Niko and subsequently got an injunction order that barred Petrobangla to paying gas bills to the company until the compensation issue was settled.
Petrobangla had held up $27 million in payment of gas bill to Niko before the Canadian firm stopped gas production from Feni field in May 2010.
Niko on June 24, agreed to pay nearly $9.5 million in fines and penalties after admitting in the Alberta Court in Canada that it had bribed AKM Mosharraf Hossain, the then state minister for energy ministry, to escape from paying compensation for the damages.