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Niko�s demand annoys BD Govt

Added: (Mon Apr 24 2006)

Pressbox (Press Release) - The signing of gas purchase and sales agreement for the Feni field has become uncertain again as the government has rejected outright a new condition set by the Canadian Niko Resources.
The Niko has proposed the government to include in the draft of the GPSA a clause that will allow the company to go to international arbitration for all the pending issues.
The visiting company chairman, Edward S Sampson, made the proposal when he met the energy and mineral resources adviser, Mahmudur Rahman.
Mahmud, however, rejected the proposal straightaway, saying that there was no option for inclusion of such a clause.
The officials of Petrobangla and Niko on April 5 reached a consensus on most of the major points in the draft of GPSA, including the price of $ 1.75 per unit. Petrobangla prepared the draft.
Sources in the energy and mineral resources division said the government was annoyed with the new condition of Niko at a time when Petrobangla and Niko were about ready to the sign the agreement.
They said the company demanded guarantee that Petrobangla would make full payment to it for the gas it has supplied since November, 2004 from Feni after the signing of GPSA.
It also sought assurance (by including arbitration clause) that Petrobangla would not take away any money from the Feni gas bills as compensation for Tengratila blow-outs.
Petrobangla has so far made a partial payment of $ 4 million against over 12 billion cubic feet of gas Niko has supplied from Feni.
The government has claimed 8.89 bcf of gas from Niko free of cost along with Tk 84 crore for gas and environmental loss in the twin blow-outs at Tengratila in 2005.
As Niko wanted to know the basis of the government estimate, and it apprised the company that the estimate was made as per the government law and Niko has to obey the government claim.
Sources in the Petrobangla said they invited Niko on April 19 to sign the GPSA, but Niko did not turn up.
The Niko country manager in Bangladesh, Brian J Adolph, declined to comment on the issue.

Submitted by:Patricia Ovemarrie
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