MAC: Mines and Communities

Khaleda's role in Niko, Asia Energy deals under probe

Published by MAC on 2007-08-16

Khaleda's role in Niko, Asia Energy deals under probe

Staff Correspondent, The Daily Star

16th August 2007

Intelligence agencies are investigating into allegations that former prime minister Khaleda Zia played dubious roles in realising compensation for the Magurchhara blowout, awarding gas fields to Niko Resources and leasing out Phulbari coal zone to Asia Energy.

There are allegations that Khaleda's actions in these matters violated law while the country incurred huge financial losses at the expense of benefiting some individuals.

An investigation report on the Magurchhara blowout on June 14, 1997, which was caused by negligence of US oil company Occidental, says the process of awarding of the gas blocks to Occidental itself was irregular.

The blowout caused damage worth Tk 3,900 crore, which was never compensated by Occidental and the bid to recover this compensation was limited within filing of some letters.

The report points out that Occidental expressed its interest in exploring block 12 through a fax in 1992. Later, during a visit to the USA, the then PM Khaleda Zia held a meeting with Occidental president. Afterwards, without any tendering process the government started an unsolicited negotiation for blocks 12, 13 and 14.

The government in July 1993 announced a petroleum policy outlining an incentive package for foreign investors in oil and gas sectors. In September that year, the government held a promotional roundtable in Houston to attract oil and gas investors. Yet, without any bid, the government in the same month started processing the unsolicited negotiation with Occidental through signing a memorandum of understanding (MoU). In November, Khaleda approved the MoU. The production sharing contracts for these blocks were signed on January 11, 1995.

The Magurchhara blowout took place in June 1997. Two government committees investigated the blowout and filed their reports by July 1997 blaming Occidental's operational negligence. Yet no move was taken to claim for the compensation until July 1, 2002 when Petrobangla made a claim of $685 million compensation from Occidental. In response Occidental (then Unocal) said a 1998 supplemental agreement had increased 5 percent production share in favour of Bangladesh and that addressed the compensation issue. The government on August 2005 formed a committee on the matter. That committee mysteriously refrained from filing its report.

According to another allegation, the government in 1994 awarded a three-year licence to Australian company BHP to explore Phulbari coal zone. This licence expired in 1997. But in 1998, this licence was transferred to Asia Energy and the government illegally approved it.

But Asia Energy could not use that licence to work in Bangladesh.

Khaleda, however, created the scope illegally for Asia Energy to work in Bangladesh by changing her own orders repeatedly. Later, Asia Energy was allowed to develop the Phulbari coal mine by depriving the nation of huge financial returns.

Meanwhile, Canadian company Niko Resources was awarded the unexplored gas field of Chhatak in disguise of a marginal gas field through a joint venture with Bapex.

The deal, that illegally gave away national resources worth crores of taka to Niko, was forged in connivance with the then law minister Moudud Ahmed, the then state minister for energy Mosharraf Hossain and Khaleda Zia.

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