The High Court on Tuesday asked the government not to give Niko Resources any payment for gas from the Feni gas-field until the disposal of a case that the government had filed in a lower court for compensation for the blow-outs at Tengratila gas-field.

A High Court bench of Justice Syed Mahmud Hossain and Justice Quamrul Islam Siddiqui delivered the verdict after hearing a public interest litigation writ petition filed by three rights bodies — the Bangladesh Environment Lawyers' Association, Ain o Shalish Kendra and Odhikar in 2005 after the two blow-outs in Tengratila gas-field. The HC in its verdict, however, declared legal the Niko's joint venture agreement with the Bangladesh Petroleum Exploration and Production Company for Tengratila (Chhatak) and Feni gas-fields.

The rights organisations challenged Niko's joint venture agreement with Bapex, a subsidiary of Petrobangla for the Feni and Tengratila gas-fields, and sought the High Court's verdict to ensure that Niko paid adequate compensation to the victims of the blow-outs in 2005. In response to the writ, the HC in September 2005 issued an injunction restraining the government from making any payment to Niko and directed it to freeze all the bank accounts maintained in Bangladesh by the Canadian company. The court also asked the government and Niko to explain why the agreement should not be cancelled and proper legal action should not be taken against Niko as the agreement was signed in an 'illegal' manner.

The government in June 2008 also filed a damage suit with a Dhaka court against Niko, claiming Tk 746.50 crore as compensation for the destruction of properties and gas reserves in and around the Tengratila field in Sunamganj after the company refused to pay the government anything. Both the company and the government recently took a move to go to HC to get the injunction against payment to Niko for Feni field's gas vacated as the company proposed to drill two more gas wells there to increase production. Petrobangla owes Niko around $32 million in gas bills for the gas from Feni, but many energy experts protested against the government's move to pay Niko the bill until it pays compensation for the twin blow-outs at Tengratila.

The High Court, in its verdict, directed the government not to pay Niko for the gas that Petrobangla has been purchasing from the Feni gas-field from 2004 until the disposal of the government's case or until Niko and the government has reached a settlement over the issue of compensation. The controversial joint venture agreement with Niko was signed for the development and production of gas from Chhatak and Feni fields by the BNP-led government in 2003 after the previous Awami League government declared the fields abandoned or marginal despite its huge gas reserve.

-New Age