Niko must compensate Bangladesh for Chhatak gas field explosion: int’l tribunal
An international tribunal has ordered Canadian company Niko Resources to compensate Bangladesh for Chhatak gas field explosion in 2005, State Minister for Power, energy and Mineral Resources Nasrul Hamid said today.
The International Centre for Settlement of Investment Dispute (ICSID) announced the verdict on February 28, the minister said while exchanging views with reporters through videoconference on "Bangladesh's victory in Niko case at ICSID" from his residence in Dhaka.
On January 7, 2005, an explosion occurred in Chhatak gas field in Sunamganj while Niko was drilling there, causing extensive damage to the environment of the gas field and its adjoining areas.
More than a decade after the explosion, Bangladesh filed a lawsuit with the international arbitration court against Niko on March 25, 2016, claiming $1014 million ($118 million for Bapex and $896 million for Bangladesh) in compensation for the destruction of properties and gas reserves in the field, said a press release of the ministry.
Nasrul Hamid said in addition to the direct compensation, rehabilitation of the public, loss of public health as a result of the explosion, environmental compensation including land damage will also be recuperated from Nike.
After a long and complicated legal battle of ten years, the tribunal issued the landmark judgment, accusing Niko of violating the terms of the 2005 joint venture agreement, he said.
The International Tribunal has ruled that the explosion was caused due to Niko's failure to conduct its operations efficiently and in line with international standards for the petroleum industry, the minister added.