Niko to pay Tk 516cr to Bangladesh for Tengratila gas field blasts

An international arbitration tribunal has ruled in favour of Bangladesh in the case of explosions at the Tengratila gas field, ordering Canada-based Niko Resources to pay compensation of USD 42 million (about Tk 5.16 billion).

The verdict was delivered by the Washington-based International Centre for Settlement of Investment Disputes (ICSID), Petrobangla Chairman Engineer Rezanur Rahman confirmed on Thursday (January 29).

According to Petrobangla sources, the compensation covers the value of gas lost in the explosions as well as environmental and other damages.

Niko was awarded the gas exploration contract at the Tengratila gas field in Chhatak of Sunamganj, in 2003. Due to mismanagement and failure to maintain international safety standards, two major explosions occurred on January 7 and June 24, 2005, destroying an estimated eight billion cubic feet of gas and causing extensive environmental and local damage.

Petrobangla initially sought compensation of Tk 7.46 billion, which Niko refused to pay, prompting Bangladesh to pursue international arbitration. The tribunal found that the explosions resulted from Niko’s operational negligence and non-compliance with international petroleum industry standards.

In 2016, state-owned BAPEX filed a separate claim seeking around Tk 92.5 billion in damages, leading to the final ruling delivered by ICSID.