Green light to explore onshore

January 29, 2010

HC vacates 9-year injunction
The High Court in a verdict yesterday cleared the way for exploration of oil and gas from the country’s onshore blocks by vacating its nine-year old injunction on such exploration.
The court also discharged a 12-year old writ petition that challenged the government move to sign production-sharing contract (PSC) with foreign gas and oil exploration companies.
The HC judgment paves the way for the government to sign PSC for oil and gas exploration.
The injunction prevented opening any onshore blocks to international companies for oil and gas exploration under any PSC since 2001.
The country had signed several PSCs with some foreign oil companies in the 90s through two rounds of block biddings. These oil companies now meet more than half of country’s gas requirements.
Former secretary Shah Abdul Hannan, columnist Sadek Khan, journalist Amanullah Kabir, and Prof Abdur Rob jointly filed the writ petition with the HC as public interest litigation in 1998.
The petition sought HC directive on the government to formulate a National Strategy Policy through parliament before leasing out gas blocks to protect the country’s interests.
Following the petition, the HC in 2001 issued an injunction on oil and gas exploration from the country’s onshore blocks.
The government in December last year prayed to the court for withdrawal of the injunction order to clear the way for oil and gas exploration from onshore blocks.
The HC began hearing the writ petition on January 5.
Counsel for Petrobangla told the court that the procedure for signing PSCs comes under the Petroleum Act 1974 that expressly empowers the government to enter such contracts.
They said since the government has ensured transparency by publishing the Model PSCs online, on the basis of which the PSCs are negotiated, there was no scope for judicial review of the matter.
The HC yesterday observed that the court cannot interfere with the policy matters of the government.
“In a democracy, the government of the day remains responsible to the parliament as well as to the entire population as a whole, for all their policy based activities and hence it is the parliament, rather than the Supreme Court, which is the best placed to scrutinise policy decisions adopted by the government,” the court said.
If the government frames any policy for oil and gas exploration and there is any inconsistency in policy matter, the HC can deal with this issue, observed the court.
The HC bench of justices Mohammad Anwarul Haque and AHM Shamsuddin Chowdhury Manik came up with the verdict and observations after hearing arguments from the counsels of the petitioners, government and Petrobangla, a respondent of the petition.
Counsel for Petrobangla Dr Kamal Hossain told the court that policy matters and guidelines on oil and gas exploration lie with the government.
The government is the authority to decide on what kind of policy the state will have, and the HC cannot interfere with the policy matters, he argued.
During the hearing, petitioners’ counsel barrister Abdur Razzaq told the court that the mineral resources cannot be exported without an appropriate national policy.
Additional Attorney General Murad Reza stood for the government.

Courtesy of The Daily Star

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