Canadian cops open probe into scandal....

The Royal Canadian Mounted Police (RCMP) is looking into allegations that Calgary-based energy company Niko Resources Ltd or its subsidiary made improper payments to public officials in Bangladesh to bag a joint venture deal with Bangladesh Petroleum Exploration Company (Bapex) to develop three marginal gas fields...

The Canadian press reported Friday that Niko authorities had confirmed rumours that a RCMP probe was underway...

Murray Hesje, Niko's chief financial officer, said, "They were simply willing to confirm that yes, there was an investigation under way and they were willing to name the country that was involved, being Bangladesh. But they provided no additional details to us," he said,

Niko said it would co-operate fully with the corruption probe...

The Anti-Corruption Commission (ACC) in 2007 filed two separate cases against Sheikh Hasina and Khaleda Zia and a number of officials and a Niko representative for the deal that inflicted millions of dollars loss on the state treasury...

Hesje said the company always operates within both Canadian law and the laws of the countries in which it operates...

"We have a code of conduct ... We believe we behave ethically and are unaware of anything illegal that the company's been involved with," he said,

Niko has operations in India, Bangladesh, Pakistan, Madagascar, the Kurdistan region of Iraq, Indonesia and other countries...

In its latest financial report, the Calgary company posted a second-quarter loss of $24-million, compared with a $19.4-million loss for the same period the previous year...

Niko's corruption got public attention in mid-2005, when the then state minister for energy AKM Mosharraf Hossain resigned from the cabinet after he was exposed to have received a Tk 1 crore sport utility vehicle from Niko...

The company also enjoyed unusual favours from Mosharraf who forced Petrobangla to pay Niko resources US$ 4 million illegally to Niko till April 2005 for purchase of gas from Feni marginal field, and without fixing a price or any purchase agreement.

As per the agreement, this money was supposed to go to Bapex but did not. At that time fire at the blown out Tengratila gas field was still burning...

NIKO'S IRREGULARITIES
The joint venture agreement (JVA) between Niko and Bapex was done in violation of government policy, constitution and against the opinions of the government's own energy experts...

To favour Niko, the then BNP led alliance government took away three gas fields of Feni, Kamta and Chhatak from two gas companies of Petrobangla -- without paying them any compensation...

These fields were placed under Bapex so that Niko could have access to them through the joint venture...

Among these fields, Chhatak is divided in two parts -- the east and west parts. The eastern part remains unexplored but the government handed it to Niko showing it as a “marginal gas field” in gross violation of rules...

The unsolicited agreement undermined Petrobangla's constitutional role as the state's supervisor of oil, gas and mineral resources. While all oil and gas contracts are signed between Petrobangla and the contractors, Petrobangla was not a signatory to the JVA.

The country's law does not allow other companies to sign such a deal...

The bid for the JVA with Niko -- a company disqualified in the government's evaluation during the second round block bidding in 1997 -- began in 1999 during the Awami League (AL) government's tenure which okayed a framework of understanding (FoU) between Bapex and Niko in the year...

The energy secretary and some high ups of the past Awami League government pushed the bid amidst strong opposition from Petrobangla while barrister Moudud Ahmed acted as Niko's adviser...

However the AL government could not finalise or sign the JVA...

The BNP government completed what the AL had begun.

AKM Mosharraf Hossain and the leaders of the Hawa Bhaban began to push the deal and in October 2003, Mosharraf approved the deal on behalf of the prime minister...

They even dropped the option of 'Swiss Challenge' from the JVA as drafted during the AL government. The Swiss Challenge would have at least given Bapex the option to seek matching or better offers from other oil companies...

Niko-Bapex found a small gas reserve in the Feni gas field in 2004 and it started selling 20 million cubic feet per day (mmcfd) to 40 mmcfd gas to Petrobangla from October '04...

Being a very small company that entirely depends on hired contractors for all the works, Niko's faulty drilling in the Tengratila area under Chhatak east led to the first blow-out in January 2005...

The government formed three committees after this chapter and investigators told The Daily Star that Niko did not take proper safety measures, drilling up to depths of 800 metres through the well which had only 300 metres of concrete casing...

Although these reports depicted the irregularities and mistakes in Niko's operation, the government took no action against it...

Niko proceeded slowly in the Tengratila remedial works. On June 17, 2005 the company once again proved its incompetence through the second blowout...

After this phase, the then energy ministry adviser Mahmudur Rahman punished two Bapex officials but left Niko untouched...

Once again three committees were formed -- two to find out the cause of the blowout and assessment of damage and another to find out how the Niko agreement had been signed -- magnifying Awami League government's role. ..