DHAKA, Sep 3: The ‘shady’ joint venture agreement of Bangladesh Petroleum Exploration and Production Company (BAPEX) with Canada-based Niko Resources was signed in 2003 without approval of Prime Minister Khaleda Zia, who is also minister for power, energy and mineral resources, reveals a report of a government probe committee.

Niko is responsible for two blow-outs at Bangladesh’s Tengratila (Chhatak) gas field that took place on January 7 and June 24 this year and burnt three billion cubic feet of gas, aside from destroying arable fields, impoverishing the nearby villagers and polluting the environment.

However, the government probe committee, headed by a director-general of the Prime Minister’s Office, Mohammad Shah Alam, also found that the framework of the agreement, which was signed in 1999 and based on which the joint venture agreement was signed, was against the interest of the country.

The process of declaring the Chhatak and Feni gas fields, which were handed over to the Bapex-Niko joint venture, and Kamta gas field, as ‘abandoned’ was an act of corruption.

Only the then state minister for energy and mineral resources, AKM Mosharraf Hossain, approved Niko’s joint venture agreement with BAPEX, said the committee.

“However, no approval was taken from the minister for energy and mineral resources (the prime minister) for signing the agreement,” said the report, which was submitted to the adviser for energy and mineral resources, Mahmudur Rahman, on Saturday.

Mosharraf, however, told the press on Saturday: “As far as I can remember at this moment the PM’s approval of the joint venture agreement was given on March 18, 2003. Besides, the then prime minister (Sheikh Hasina) had already approved the joint venture agreement on June 14, 2001,” claimed the former minister, who lost his job in July over a scandal caused by his acceptance of a luxurious vehicle from Niko.

The government of Khaleda Zia signed the agreement with Niko for Chhatak and Feni gas fields on October 16, 2003 based on an unsolicited proposal of the Canadian company after the previous Awami League government had signed a framework of understanding (FoU) with it and declared three productive gas fields abandoned.

Niko, on June 28, 1998, had proposed the development of, and production of gas from, Kamta, Chhatak, Fenchuganj and Beani Bazar fields.

However, Petrobangla said Chhatak and Kamta gas fields could be developed under a joint agreement with its subsidiary organization, Bapex, and if needed the Feni gas field could also be considered for the purpose.

Terming the joint venture agreement ‘shady’, the probe committee said that awarding of the Feni and Chhatak gas fields to the Bapex-Niko joint venture was questionable as Bapex, a subsidiary of Petrobangla, is not owner of the fields, said a committee member.

In fact, two other Petrobangla subsidiaries, Sylhet Gas Fields Ltd and Bangladesh Gas Fields Company Ltd, are the owners of Chhatak (Tengratila) and Feni gas fields, respectively, he said.

The committee observed that there was no guideline in Petrobangla for declaring gas fields abandoned when three fields -— Chhatak, Feni and Kamta —- were declared abandoned in 1999.

“A shady process was followed in declaring the fields abandoned. Tricks were played in doing so,” said the committee member. “Later, there was an attempt to give the process a legal basis in line with a policy framed in 2001. The policy was faulty.”

Quoting the probe report, Mahmud told reporters that the two sections -— 5.05 and 9.01 -— of the FoU, which was signed by the AL government on August 23, 1999, later compelled the present government to sign the agreement between Niko and BAPEX.

He claimed that if the joint venture agreement had not been signed by this government, there was every possibility that Niko would go to the international court where Bangladesh might have lost the case as the FoU had already been signed.