US embassy cable - 05DHAKA130

UNCLAS DHAKA 000130 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, ENRG, EINV, BG 
SUBJECT: GAS WELL EXPLOSION 
 
 
1. A gas field explosion in Sunamganj forced 10,000 people 
from their homes on January 8th, sparking widespread media 
and government speculation as to the cause and extent of the 
damages.  Newspapers reported losses in millions of dollars 
and speculated that the fire would continue for 30 to 45 
days.  Experts feared that a new rig would have to be brought 
to control the fire, delaying the process by 30 days. 
 
2. According to initial reports, the explosion destroyed the 
oil rig and the well remained inaccessible by operators.  To 
control the fire, Niko, the Canada-based manager of the gas 
field, contemplated drilling sideways, 500 meters from the 
well, to relieve pressure on the well.  However, the well 
proved to be low in gas, and the fire burned itself out the 
following day. 
 
3. A Chinese subcontractor, CPTDC, operated the rig. The 
explosion destroyed the rig and caused more than $25 million 
in operational losses to Niko and the subcontractor, 
according to press reports.  Niko may also have to bear the 
additional cost of rebuilding more than 40 homes that were 
destroyed by the explosion.  Senior officials from the Energy 
Ministry and Petrobangla visited the site and announced plans 
to set up an inquiry committee.  Press reports, perhaps 
drawing on BDG officials have already blamed Niko 
"mismanagement" and alledgedly flawed technology for the 
blowout. 
THOMAS