Feni gas field reels from writ petition

As a partner of the controversial Canadian oil company Niko, which developed and began selling gas from the marginal Feni Gas Field from late 2004, Bapex has been suffering financially by a four-year-old writ petition filed by Bangladesh Environment Lawyers' Association (Bela) and others with the High Court.
While the court is finally holding hearings on the petition, both Niko and Bapex's arrears with Petrobangla for sale of around 20 billion cubic feet of gas till date remain unpaid.
Petrobangla owes Bapex around Tk 50 crore (more than $7 million) and Niko around $22 million.
A High Court order also suspended drilling of any development well in the Feni Gas Field.
"Once the High Court clears the case, Niko would re-invest this money to drill two development wells in Feni to boost gas production by 40 million cubic feet per day from this formerly abandoned gas field," said a well-placed Petrobangla source, referring to an appeal of Niko to the court regarding this matter.
Niko-Bapex was initially producing 20 million cubic feet of gas a day in November, 2004. The production has now come down to 1.5 million cubic feet of gas a day.
Petrobangla signed the gas sales agreement (GSA) with Niko in December 2006. The price of Feni's gas was fixed at $1.75 per thousand cubic metre following prolonged disagreements between Petrobangla and Niko.
Long before this GSA was signed, Petrobangla under pressure from the-then energy minister AKM Mosharraf paid $4 million to Niko in April 2005. Mosharraf also made Petrobangla take the Feni field's gas from November 2004 without any agreement.
In September 2005, the High Court ordered a stay on Petrobangla's payment for purchasing Feni Gas Field's gas following a writ petition filed by Bela, Ain-O-Salish Kendra and Odhikar.
They filed the writ following two consecutive blowouts--while Niko was drilling a well in Tengratila and then while drilling a remedial well to control the blown out well. Afterwards the court asked Petrobangla to stop gas-bill payment to Niko without opening joint bank account with Bapex.
Since then the case did not make any headway till Niko-Bapex moved an appeal with the High Court to, at least, allow payment for the gas sales. Niko promised that the money from this sale would not be taken outside Bangladesh.
A High Court bench in November then directed that instead of hearing the appeal, the court should clear the main case. Accordingly, the hearing started a few weeks ago.
The country is undergoing a severe energy crisis due to lack of adequate initiatives in the power and gas sectors by the four-party alliance government between 2001 and 2006. Presently gas supply shortfall of 165 million cubic feet per day to 200 million cubic feet per day is compelling the Power Development Board to cut power production by 600 to 700 megawatts a day.
On the other hand, Bapex has been suffering from cash crisis since its inception. It only drew meaningful attention of the caretaker and the present Awami League government.