The Chhatak gas field explosion, also known as the Tengratila blowout, refers to two uncontrolled natural-gas blowouts on 7 January and 24 June 2005 at the Chhatak-2 well in the Chhatak (Tengratila) gas field in Sunamganj District, Bangladesh. Both occurred while Niko Resources (Bangladesh) Ltd., a subsidiary of the Canadian company Niko Resources, was drilling an exploratory well under a joint-venture agreement with the state-owned Bangladesh Petroleum Exploration & Production Company (Bapex); the second blowout produced a fireball that researchers estimated at high. An estimated of gas burned across the two incidents, and the field remained largely out of production for roughly two decades afterward.
A government-appointed probe committee found the blowouts resulted from negligent drilling practices, including a failure to properly case a loose sand formation before drill pipe was withdrawn. A subsequent environmental impact assessment found extensive damage to homestead forest, local wildlife and groundwater in the surrounding area, and area residents were displaced during the response. The incident also gave rise to a bribery scandal: Niko gave the Bangladeshi state minister for energy a luxury vehicle and paid for his overseas travel while he was assessing the compensation the company owed, and in 2011 Niko pleaded guilty to bribery in a Calgary court and paid a fine of roughly C$9.5 million. A separate Bangladeshi corruption case against former prime minister Khaleda Zia and seven co-defendants over the award of the drilling contract ended in acquittal in February 2025.
Petrobangla pursued Niko for compensation in Bangladeshi courts beginning in 2007, while Niko separately brought two arbitration claims before the International Centre for Settlement of Investment Disputes (ICSID) in 2010: one concerning unpaid gas bills from Niko's separate Feni gas field, and one seeking a declaration that it bore no liability for the Chhatak blowouts. Niko succeeded on the first, and in 2021 the tribunal ordered Petrobangla and Bapex to pay it about for the withheld Feni bills, an award upheld on annulment review in 2023. On the second, the tribunal found in February 2020 that Niko was liable for the January 2005 blowout, though not for the June explosion, and in December 2025 it issued its final award on damages, ordering Niko to pay Bangladesh —well short of the roughly that the Bangladeshi government and Bapex had sought—covering the value of the lost gas and environmental restoration costs. Bangladeshi officials confirmed the ruling publicly in late January 2026 and said Petrobangla and Bapex intended to resume drilling at the field.
Background The Chhatak gas field, known locally as Tengratila, was discovered in 1959, with nine gas-bearing layers identified the following year. Gas from the field supplied the nearby Chhatak Cement Factory and a paper mill, but production was halted after roughly had been extracted, owing to water intrusion into the well. The field then remained largely inactive for decades.
Gas fields in the Sylhet basin of northeastern Bangladesh had a history of serious well-control failures before 2005. A 1997 blowout at the Magurchhara gas field in Moulvibazar District, during drilling by the American company Occidental, destroyed a large area of the adjacent Lawachhara reserve forest and, like Chhatak, remained the subject of unresolved compensation claims decades later.
Niko Resources began operating in Bangladesh in 1997 but did not qualify through the standard competitive bidding process. According to reporting by The Daily Star, the company lobbied Bangladeshi officials over the following year and, in 1998, submitted an unsolicited proposal to develop the Chhatak and Feni gas fields. Bapex initially objected to the proposed terms, on the grounds that Niko had categorised Chhatak as a previously exploited field rather than a new discovery, according to the same reporting. A joint venture agreement (JVA) between Niko and Bapex was nonetheless signed in 2003, during the tenure of the BNP–Jamaat-e-Islami coalition government led by Khaleda Zia; a Dhaka court later found that the underlying negotiations with Niko had begun during the preceding government of Sheikh Hasina. A separate Gas Purchase and Sale Agreement between Niko, Bapex and Petrobangla, covering gas from the Feni field, was signed in December 2006.
The blowouts Niko was responsible for developing the Chhatak field under the 2003 joint venture agreement. A government-appointed probe committee later found that its drilling operations did not follow standard international well-control practice.
January 2005 blowout On 7 January 2005, days after drilling began at the Chhatak-2 well, a blowout occurred at a depth of roughly . Engineering reviews of the incident attribute it to two related failures: the drill string was pulled out of a loosely consolidated formation, the Tipam Sand Unit, without first setting protective casing, and this caused a "swabbing" effect that drew gas from the reservoir into the open borehole. The resulting pressure release ignited, forcing an immediate suspension of drilling.
June 2005 blowout A second, larger blowout struck the field on 24 June 2005, at around 3:00 a.m., while a relief well was being drilled in an attempt to divert gas from the still-leaking first well. The resulting fireball reached an estimated in height. The ICSID tribunal that later examined the incidents found Niko liable for the first blowout but did not find it liable for the second.
Impact and aftermath Environmental damage An environmental impact assessment carried out after the blowouts rated the severity of the damage to land at 8.27 out of 10, the highest of the categories assessed, and rated the impact on air quality at 3.38 out of 10, the lowest. Within a radius of the well, the assessment found that roughly 98 percent of homestead forest resources and 68 percent of trees had been destroyed by heat and combustion by-products. The same study estimated declines of roughly 90 percent in insect populations, 80 percent in reptiles and 75 percent in amphibians in the area, and found that groundwater and surface water had been contaminated with polycyclic aromatic hydrocarbons, arsenic and oily residues, rendering most local tube wells unusable.
Social and economic impact The explosions led to the evacuation of nearby residents and disrupted the area's largely agricultural and fishery-based economy; the assessment estimated losses to aquaculture at around . The loss of the field also affected the Chhatak Cement Factory and paper mill that had depended on its gas supply, and Petrobangla had to source more costly alternative fuel after the field went offline. Contamination of tube wells left many households without a reliable source of drinking water in the years following the blowouts.
Corruption and bribery scandal On 23 May 2005, shortly before the second blowout and while he was overseeing the government's assessment of compensation owed by Niko, State Minister for Energy AKM Mosharraf Hossain received a luxury sport-utility vehicle from the company, worth roughly C$190,000 according to Canadian prosecutors; Niko also paid for trips for Mosharraf to Calgary and New York. Reporting on the gifts contributed to Mosharraf's resignation on 18 June 2005. Mosharraf denied wrongdoing.
Canadian authorities notified Niko in January 2009 that it was under investigation by the Royal Canadian Mounted Police's International Anti-Corruption Unit. On 24 June 2011, Niko pleaded guilty in the Alberta Court of Queen's Bench to a single count under Canada's Corruption of Foreign Public Officials Act, admitting that it had provided the vehicle and travel to influence the minister's handling of the compensation matter and a related gas-purchase negotiation. The court imposed a fine of C$8,260,000 plus a 15 percent victim surcharge, for a total of C$9,499,000, along with a three-year probation order requiring an independent compliance audit. It was the first conviction obtained under the Act.
Separately, Bangladesh's Anti-Corruption Commission (ACC) filed a case in December 2007 alleging that Khaleda Zia, who was prime minister when the joint venture agreement was signed, and several officials had abused their positions in awarding the contract to Niko. A related case brought against Sheikh Hasina over the same matter was dismissed by the High Court in 2010. After a charge sheet naming Khaleda Zia and eleven others was filed in May 2018, alleging state losses of around ৳13,777 crore (৳137.77 billion), a Dhaka court framed formal charges in March 2023. Three of the original defendants—Mosharraf, former law minister Moudud Ahmed, and former Bapex secretary Md Shafiur Rahman—were dropped from the case following their deaths. On 19 February 2025, Judge Md Rabiul Alam of Dhaka's Special Judge's Court-4 acquitted Khaleda Zia and seven co-defendants, ruling that the prosecution had failed to substantiate the charges and describing the case as an instance of political harassment.
Writing in The Daily Star in 2013, commentators noted that the Canadian prosecution had reached only the party that paid the bribe: because Niko's conviction was for offering the inducement rather than accepting it, it did not by itself establish criminal liability for the Bangladeshi officials who received the gifts, a question left instead to the separate, and ultimately unsuccessful, domestic ACC case.
Legal proceedings and arbitration + Timeline of the domestic and international proceedings Date Event December 2005 Petrobangla announces an initial compensation claim of ৳250 crore (৳2.5 billion) against Niko. 2007 Petrobangla's claim rises to ৳746 crore (৳7.46 billion); Niko rejects it, Petrobangla suspends payment for gas Niko supplied from the separate Feni field, and Petrobangla sues Niko in a Dhaka court. November 2009 The High Court orders the seizure of Niko's Bangladeshi assets and bars further payment to the company pending compensation; Niko's appeal to the Supreme Court is unsuccessful. 2010 Niko files two arbitration cases with ICSID: a "Payment Claim" over the withheld Feni gas bills, and a "Compensation Claim" concerning liability for the Chhatak blowouts. 2013–2019 The tribunal, hearing both cases together, issues a Decision on Jurisdiction (2013), a Decision on the Payment Claim (2014), a further Payment Claim decision (2016), and a Decision on the Corruption Claim addressing the effect of Niko's bribery conviction (2019). 28 February 2020 Decision on Liability: the tribunal finds Niko liable for the January 2005 blowout, but not the June 2005 blowout. 18 May 2021 Decision on Heads of Recoverable Loss, setting out which categories of damages Bangladesh could recover. 24 September 2021 Award on the Payment Claim: the tribunal orders Petrobangla and Bapex to pay Niko for the withheld Feni gas bills, plus interest and a share of costs. 2022–2023 Petrobangla and Bapex apply to annul the Payment Claim award, citing alleged corruption in the procurement of the Feni gas agreement among other grounds; an ICSID ad hoc annulment committee dismisses the application in October 2023. 18 December 2025 Final award on the Compensation Claim: the tribunal orders Niko to pay Bangladesh — for the lost gas and for environmental damage—against a joint claim of roughly from the government and Bapex. Late January 2026 Petrobangla confirms the December 2025 award publicly; a senior government official describes the amount as low relative to the original claim.
Domestic lawsuit