Bangladesh is set to receive approximately USD 42 million in compensation from Canada-based energy company Niko Resources over the Tengratila gas field explosion, following a ruling by the International Centre for Settlement of Investment Disputes (ICSID). The amount is significantly lower than the USD 1.014 billion originally claimed by the Bangladeshi government and state-owned energy companies.
According to officials from the Energy Division, Petrobangla, and BAPEX, a summary of the ICSID verdict obtained through legal representatives indicates that Bangladesh will receive around USD 42 million, which equals roughly BDT 5.12 billion at current exchange rates. The full text of the ruling has not yet been made public. Authorities said further steps will be decided after reviewing the complete verdict and consulting legal experts.
Earlier, Bangladesh had sought USD 1.014 billion in compensation for environmental damage and the destruction caused by gas flaring at the Tengratila gas field in Sunamganj district. Officials noted that the awarded amount is substantially lower than the actual losses suffered, in addition to the significant legal costs incurred over years of litigation.
Energy Adviser Muhammad Fouzul Kabir Khan confirmed the development, saying that the compensation decision has been learned at a preliminary stage and that the government will take its next course of action after reviewing the full ruling.
The Tengratila gas field in Chhatak, Sunamganj, was handed over to Niko Resources in 2003 for gas exploration. During drilling operations, two major explosions occurred on January 7 and June 24, 2005, resulting in massive fires that destroyed large volumes of gas and caused extensive damage to surrounding infrastructure, the environment, and local livelihoods. Although Petrobangla demanded compensation, Niko refused to pay.
In 2007, Petrobangla filed a compensation lawsuit in Bangladeshi courts. The case went to the High Court and later to the Supreme Court, both of which ruled in favor of Petrobangla. Subsequently, payment of Niko’s gas bills was suspended and the company’s assets in Bangladesh were ordered to be seized.
In 2010, Niko initiated arbitration proceedings at ICSID, seeking exemption from liability. Later, the Bangladesh government and BAPEX filed separate counterclaims for compensation. Combined, these claims amounted to USD 1.014 billion.
Officials involved in the case stated that several legal and procedural issues were raised during the ICSID hearings regarding damage assessment. Due to past allegations of confidentiality breaches related to arbitration rulings, authorities are refraining from making detailed comments until the full verdict is officially released.
In 2008, the National Committee to Protect Oil, Gas, Mineral Resources, Power, and Ports protested the government’s damage assessment, claiming that losses at Tengratila amounted to several billion taka. Former committee member secretary Professor Anu Muhammad said that although the compensation amount is disappointing, the confirmation of Niko’s liability at an international forum represents a moral victory for Bangladesh.
Energy and Mineral Resources Secretary Mohammad Saiful Islam also described the awarded amount as unsatisfactory compared to the claim. He said the ruling would be reviewed in detail once the full verdict is received, including an assessment of total legal expenses incurred.
Petrobangla sources said that although part of the Tengratila gas field was damaged, gas reserves in other layers remain intact. A development project proposal has already been prepared to drill new wells in the area. Further legal and operational decisions will be taken after reviewing the final ICSID ruling.
