Niko fined $42m over 2005 Tengratila gas field explosions
An international arbitration tribunal has ruled in favour of Bangladesh in a case over the explosions at the Tengratila gas field in Chhatak, Sunamganj. Canadian company Niko Resources has been fined $42 million for the devastating explosion that occurred in 2005—an amount equivalent to more than Tk 500 crore.
The arbitration award was recently delivered by the International Centre for Settlement of Investment Disputes (ICSID), a World Bank–affiliated body.
Petrobangla Chairman Md Rezanur Rahman confirmed the matter to Jago News on Thursday night (29 January).
He said the tribunal had delivered an award in favour of Bangladesh in the Niko case related to the Tengratila gas field explosion. Under the ruling, the company has been directed to pay $42 million in compensation.
“Our lawyer has sent us a synopsis of the award. We have not yet received the full copy of the verdict. Once the complete copy is received, further steps will be taken after consulting with the lawyer,” he said.
The Tengratila gas field incident is regarded as one of the worst industrial disasters in the history of Bangladesh’s energy sector. In 2005, two rounds of explosions and fires occurred at the gas field in Chhatak upazila of Sunamganj. Experts believe the accident was caused by a failure to control pressure in the well during gas extraction.
As a result, a huge volume of natural gas was burnt and wasted, and a large part of the gas field was destroyed. Nearby villages, croplands and the environment suffered severe damage, forcing many residents to become displaced.
At the time of the incident, the gas field was being operated by Canada-based company Niko Resources Limited. Following the incident, a dispute arose between the Bangladesh government and Niko over responsibility and compensation, which later led to arbitration proceedings at ICSID.
The Tengratila incident is still considered an important lesson regarding foreign investment in the energy sector, regulatory oversight and the protection of national interests.