Registered in Bermuda as Niko Exploration (Block 9) Ltd with an authorised capital of mere $12,000, the company found its qualification suddenly shooting up thanks to its political connections with a certain Bhaban -- the so-called alternative powerhouse of the government, industry insiders said.

Breaching its policy, the government last month secretly awarded the company an unexplored gas field, dubbed as marginal or used.

According to rules, any oil company seeking the exploration right to an unexplored field must qualify and win it through a competitive bidding.

Now, the company is going to get government clearance for taking over 60 percent stakes in gas exploration in block 9 from the US oil giant Chevron-Texaco.

When Chevron-Texaco under Chevron International Bangladesh Ltd (CIBL) announced on September 17 that it sold all its shares of the prized block, Petrobangla rejected the sale, as it did not comply with the contract.

According to available documents, the sale of shares between the two companies did not take place before September 23.

All previous sales of block shares, including the deals of Occidental and Unocal and Cairn and Shell, complied with the production sharing contract (PSC) terms and conditions.

Even the sale of Shell stakes to Cairn in blocks 15 and 16, announced in August, is undergoing a prolonged legal process. Shell has not completed preparing all legal papers to file an application for share transfer approval from the government.

But amid pressure from political overlords, Petrobangla is now 'legally scrutinising' to see if the sale is okay, sources said.

CIBL says the sale has already taken place and Niko should replace it with immediate effect, while Niko says the shares belong to it with retrospective effect from January 1 this year.

BNP lawmaker and senior lawyer Khandaker Mahbubuddin is scrutinising the document as Petrobangla's legal advisor.

If cleared, Niko will not only take over the CIBL shares now, it will become the block's operator from April upon completion of three years of the PSC for block 9. The block's present operator Irish company Tullow that holds 30 percent share cannot accept the change, it said officially.

Tullow's Legal and Commercial Director Graham Martin earlier told the press, "When the PSC was signed in April 2001, we agreed to the idea of having Chevron-Texaco as the operator (after April 2004) considering their experience and strength in the development phase," Martin said.

"But now the situation has changed. We can never accept Niko as the operator."

Tullow's frustration runs deep because it got the highest attention of the previous Awami League government initially and had also technically and financially qualified for the second round block bidding in which Niko was found disqualified.

Tullow was also set to get blocks 9 and 11, but as the government faces tremendous pressure from US lobby and public criticism, it had to share the block with US company CIBL.

Sources said the deal would undermine the PSC as a legal document. "We have seen violation of PSCs in renewal of contracts with Occidental and UMC. But not in share transfer," one of the sources said.

Explaining the risk of creating a bad precedence, a source said, "This essentially ridicules the selection process of the government in finding companies."

Meanwhile, Niko also got its 'marginal' field deal done by using political lobbies despite Petrobangla's reservations.

Niko flagged a joint venture agreement with Bangladesh Petroleum Exploration Company (Bapex) and avoided competition or bidding to get the unexplored eastern Chhatak gas field.

In addition, the company would be awarded Chhatak west, Feni and Kamta gas fields -- all explored but abandoned, the sources said.

The vice-president, South Asia of Niko Resources Ltd, Qasim Sharif, claimed that Chhatak east and Chhatak west were basically part of the same geological structure and it could not be termed 'unexplored gas field'.

On political lobby, Sharif replied that one in Bangladesh would have to knock all doors to reach his goals.

Petrobangla sources said the eastern part was unexplored, as its geological structure was not actually the same. They pointed out that the Niko deal was a move to award an unexplored gas field without the obligations laid out in the PSC for foreign oil companies.