Officials at the energy division said a formal compensation claim will be made this week.

The compensation includes Tk 84 crore for environmental damage and Tk 166 for burning eight billion cubic feet (CFT) of gas in the two explosions.

On Sunday, a summary of the compensation claim was sent to Prime Minister Khaleda Zia who is in charge of Ministry of Power, Energy and Mineral Resources.

Energy Advisor Mahmudur Rahman had approved the compensation claim prepared by Petrobangla, the state-run oil, gas and mineral corporation.

The first accident took place in January when Niko was drilling at the abandoned gas field under a joint venture agreement (JVA) with Bangladesh Petroleum Exploration and Production Company Limited (Bapex), a subsidiary of the Petrobangla.

The second blowout was in June when Niko was drilling a relief well to extinguish the fire originating in the first explosion.

Niko claimed it successfully put out the fire by drilling another relief well in October. Bapex said although Niko successfully controlled the fire, there are still flames at several points.

Niko has so far paid Tk 2.5 crore in compensation to the local people.

Niko Executive Chairman Edward S Sampson recently met the energy advisor and sought permission to begin production from the gas field.

The advisor told him Niko would not be permitted to start production until it agreed to make the compensation.

Sampson, in a recent interview with BDNEWS, said accidents in the oil and gas industry are common. "Every year 300 such accidents take place across the world, but there is no provision of compensation for burnt gas," he added.

He told the energy advisor that Niko will follow the JVA if Petrobangla formally makes the compensation claim.