BNP Jamat Alliance II NIKO Scam: Khondkar Saleque Sufi


Published on April 8, 2018
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NIKO resources a highly incompetent company engaged in Bangladesh through very nontransparent and inappropriate process has very adversely affected the energy security of Bangladesh. BGFCL and SGFL as owners of Feni and Chatack Gas fields could develop these fields and BAPEX could explore and develop Tengratilla potential structure. Instead, Feni Gas field and Chattak gas fields remain out of production and valuable gas resources of Tengratilla was wasted from two successive blowouts during exploration by novice Niko.   

During army-backed interim government tenure in 2007 -08 there was infamous minus two formula of removing two leading ladies of Bangladesh from politics. Sheikh Hasina and Khaleda Zia were arrested. One common allegation was their involvement in Niko resource engagement for so-called Feni, Chatak and Tengratilla gas fields redevelopment. Off these Tengratilla was an explored structure. Feni and Chatk have discovered Petrobangla Companies owned and operated gas fields.  Shiekh Hasina led government in 1996-2001 did not approve the contract. The unsolicited offer of Niko was kept in abeyance and decision was there to go for Swiss Channel method of bidding for selecting the best bidder.  Khaleda Zia Led BNP Jamat Alliance Government in their term of 2001-2006 ignoring the process initiated by immediate past government entered into a contract with Niko on the basis of their unsolicited offers.  As such the case against Sheikh Hasina was dismissed. But based on credible pieces of evidence of foul play in the engagement Niko in a very nontransparent manner and consequently for the destruction of national resources for novice exploration efforts of Niko in Tengratilla the case against Khaleda Zia and her accomplices is still being pursued.

Those who have knowledge about the case observes that there must be an authentic probe into situations and circumstances which led to the emergence of Niko Resources in Bangladesh, getting the contract for redeveloping Feni, Chattak fields as marginal gas fields and exploring at the virgin structure of Tengratilla.

Niko did not even qualify as a competent IOC in the third PSC block bidding round during Awami League tenure of 1996-2001. Their proposal for redeveloping Feni, Chattak and Kamta gas fields considering these as marginal fields were logically opposed by Petrobangla and companies owning these fields. Sheikh Hasina led government categorically refused to enter into an agreement with NIKO based on their unsolicited offer. Petrobangla observed that Feni and Chattak cannot be considered as marginal gas fields. The existing norms did not allow government handing over any Petrobangla owned and operated gas field to any IOC based on its unsolicited offer. It was decided to go for Swiss Channel bidding process for developing these fields. Tengratilla structure was not included in the proposal at that stage being a separate virgin structure.

BNP –Jamat alliance government came to state power in 2001 with the pledge for exporting gas from UNOCAL  discovered Bibiyana field. NINKO proposal was kept in abeyance till 2003. During this time a mafia syndicate made an unholy alliance with HAWA Bhavan, the alternate powerhouse of BNP Jamat alliance government. The concept of Swiss Channel process was scrapped. Feni gas field was taken out from BGFCL and Chatak from SGFL and handed over to BAPEX despite of objections from these companies, The main reason for transforming BAPEX into and E& P company was forming JV with NIKO for redeveloping Feni and Chatak fields based on unsolicited offers of Niko.  Under usual process, a discovered under operation gas field cannot be handed over to any IOC on a standalone basis or any involvement of IOC.

BAPEX as E&P Company was also exploring Tengratilla as a junior partner of NIKO. BAPEX and Petrobangla had serious reservation about handing over Tengratilla to NIKO BAPEX JV. Some senior officials of BGFCL and SGFL were rewarded with higher positions of Petrobangla. There were credible allegations that vested quarter manipulated the process and serious allegations of corruptions surfaced against Petrobangla , EMRD and Prime Ministers office dealing with the process .

Feni gas field was redeveloped and gas supply commenced from the field for the gas-hungry Chittagong region.

NIKO started exploring at Tengratilla. The virgin gas structure was given to NIKO BAPEX JV without any tendering process completely illegally.

Following first blow out during exploration at Tengratilla  State Minister Of Energy  AKM Mosharaff Hossain was changed on the allegation of his involvement with NIKO. An allegation of bribing him with a car by NIKO was also raised. Engr Mahmudur Rahman was made an Energy Advisor of PM KhaledaZia,, who was also Minister In Charge of Energy and Power . A second blow out at Tengratilla happened within days of Engr Mahmud taking over. He apparently was annoyed with Petrobangla and NIKO hadling the contract and instead of taking the legal process appropriately and according to the recommendations of the probe committee suspended payments to NIKO for the gas supplied to Petrobangla from Feni Field as per GPSA signed for that . This developed contractual dispute and production from Feni was suspended . Nofurther works was done at Chatak and Tengratilla . NIKO Petrobangla dispute entered into arbitration.

The entire NIKO episode starting from Awami League government of 1996-2001 tenure till the BNP Jamat regime of 2001-2006 and beyond must be authentically probed. Awami League government did not enter into any contract with NIKO. Rather it adopted a plan for going to Swiss Channel bidding process for exploring the possibility of developing these fields engaging IOCs through a competitive process. BNP Jamat government accepted the unsolicited offers of NIKO completely illegally. Novice operation of NIKO led to the destruction of national resources. The consequent contractual disputes and arbitration impedes Bangladesh from accessioning to precious gas resources of these fields.

For the greater national interest, the legal process of NIKO case must proceed along and alleged criminals must be punished. The vested interest groups which sponsored Niko in Bangladesh and strongly lobbied in its favor since their emergence in Bangladesh must also be identified and implicated along with BNP Jamat policymakers and corrupt officials. Shiekh Hasina can not be blamed at all as her government never entertained Niko. But the dubious process of engaging Niko happened during Khaleda Zia led BNP Jamat corrupt regime. 

- The writer is an expert in energy sector infrastructure development, planning, construction management and operation in Central and South Asia and Australia. He has served as an adviser to the petroleum ministry of Afghanistan.