By Waliur Rahman
US oil giant ChevronTexaco has announced it is winding up business in Bangladesh and handing over its interest to a Canadian oil company.
Chevron's partner has rejected the proposed exit
But the American company's Irish partner in a natural gas block - made up of several gas fields - in Bangladesh has rejected the proposal and threatened to take legal action.
ChevronTexaco is the second major international oil company after Anglo-Dutch firm Shell to quit Bangladesh's oil and natural gas sector.
Its announcement caught senior officials of the government by surprise because the company had lobbied hard to get natural gas fields in Bangladesh.
The company had been awarded a 60% share in a highly prospective hydrocarbon block in the eastern part of the country.
But now ChevronTexaco's senior executives explained that the biggest oil company in the world is no longer interested in its Bangladesh operation.
They told the regulators in Dhaka that the planned pullout was a part of ChevronTexaco's global restructuring programme and that they wanted to hand over all its assets to Canadian company Niko Resources.
Government permission is mandatory for the share transfer to take effect, but that should have been done in line with the Production Sharing Contract the company signed with the Energy Ministry and other partners.
The other major partner in the block, Irish company Tullow Oil, meanwhile said that ChevronTexaco's attempt is unacceptable to them.
In his letter to ChevronTexaco, a director of Tullow referred to the "historical and legal position" surrounding the gas fields.
"Tullow do not accept this attempt by ChevronTexaco to renege on its commitments to its partners and the Bangladesh government, and Tullow will act accordingly," said Graham Martin, the company's legal and commercial director.
Niko Resources however had participated by the bidding for oil and gas exploration in late 1990s, but was disqualified on both technical and financial grounds.
But the Energy Minister, Mosharraf Hossain, told the BBC that they have no objection regarding Niko taking over ChevronTexaco's interest since the Canadian company is a major global player with strong presence in India.
But analysts say the decision by a major American company to withdraw from Bangladesh is a serious blow to the country's efforts to attract more foreign investment.
Last month, Shell announced its departure from Bangladesh and the planned selling of its assets to British partner Cairn Energy.
Shell has also said its decision was linked to a global business review and indicated it would have rethought its exit if there was a big market opportunity, either through export or the domestic market.