It wasn't just another bitter chapter in the history of unresolved confrontations. In fact, it quickly transformed into a global energy war when, within two weeks of the Israeli attack, Saudi Arabia and its alliesthe Opec countriesunleashed their oil weapon to manipulate world affairs through economic action.

By cutting back almost a fourth of the production of the world's largest knows reserves, and embargoing oil shipments to the United States, the Netherlands, Portugal, South Africa ... Opec dropped a politics-economic bomb, whose spectacular fall-out spread everywhere rapidly.

As a result of Opec's decision, the price of oil quadrupled almost overnight. Around the world, people came across a new term "energy crisis." Even the newly created Bangladesh became a victim of the oil price tsunami.

For instance, a sum of 100 million Dollars was allocated for importing about one million tons of crude oil and petroleum products annually for five years (1973-78). But, the total allocation of fund was exhausted in the first year. This was a shock to the nascent nation. The government became wary.

As a young member of the Planning Commission (Deputy Chief), I felt that the shock of energy price had taken us aback. The visionary prime minister, Sheikh Mujibur Rahman, Member Planning Commission Prof. Rehman Sobhan, and Chairman Petrobangla Dr. Habibur Rahman, and the PM's council of advisors on petroleum issues, sat down almost immediately to chalk out a plan of action to combat the situation.

They decided to face the challenge, and analysed in depth the nation's energy posture and future potential. A searching inquiry was made as a basis for well-informed policy formulation. The underlying assumptions were that public enterprises operating in Bangladesh would best promote economic development of the country. The need for decisive action seemed urgent.

For the new nation, Bangladesh, freedom of action meant, first and foremost, gaining unfettered sovereignty over its natural resources. Expropriation of foreign companies' interests in mineral resources was, of course, not an easy task.

To put it mildly, under the old concessionary system prior to 1971, for exploration and development of gas, foreign oil companies were granted, in exchange for royalty payments, more or less complete "ownership" over the mineral rights on vast tracts of land.

As per practice, Multinational Companies (MNCs) determined the rate of development and amount of production from their concessions, and they set the price.

The government, therefore, found nationalistion of foreign concessions to be good politics. Indeed, a vital commodity such as natural gas could not be insulated from the upsurge of nationalism in the country.

Soon, it negotiated the transfer of ownership from Messrs Shell Oil Company to Petrobangla. The concessions of all the five major gas fields (Titas, Habiganj, Rashidpur, Bakhrabad and Kailastilla) were cancelled.

Through mutual consultation, a compensation package of 10 (ten) million Pounds was signed with M/S Shell. Today, the property is worth several billion pounds. The "people" became the "owners" of the largest energy property (Article 7 and 143 of the constitution of Bangladesh). That was 1974.

It is an irony of fate that the bureaucrats have been persistently advising the government to sell out the nation's two major primary commercial energy resources (gas and coal) to foreign companies.

In 2001-02, all plans were ready to export gas to India through Unocal, violating the provisions of Production-Sharing Contract (PSC). Now it is coal. This issue came to the forefront recently, and especially after the much-hyped three billion Dollar investment (some say invasion!) proposal by the Indian conglomerate Tata.

At around the same time, there was another proposal for an open-pit coalmine by the UK-based Asia Energy Company for a six percent royalty on the value of the coal extracted.

Their bid for open-pit mine, which would require eviction of some one hundred thousand people, was convincingly rejected through a people's movement at Phulbari, which culminated in bloody violence in August, 2006.

The government had to sign an agreement with the people, pledging to prohibit open-pit mining. Disregarding the agreement, the country's bureaucracy is once again desperately trying to formulate a stand-alone coal policy that conclusively supports an export-based formula. In response, people suggest that what is needed is not a wrong coal policy, but a correct overall energy strategy.

Indeed, a policy on the nation's strategic energy resources was envisaged in 1974. The government's foremost task then was to quickly make an assessment of the country's energy resources. A comprehensive energy study under the name of "Bangladesh Energy Study" (BES) was mounted.

UNDP/ADB financed the BES, 1974. Three internationally reputed specialist companies, viz Meta systems of USA, Montreal Engineering of Canada, and ENI/Snamprogetli of Italy, were engaged to conduct the study in association with a team of local experts selected from the experienced professionals of the Atomic Energy Commission (Dr. Abdul Motin who later taught in a University in Saudi Arabia), Power Development Board (late Engineer Panaul Alam Jahangir), Geological Survey of Bangladesh (geologist M. A. Zaheer), and a geologist and an engineer from Petrobangla.

A young engineer, Mr. Obaidul Awal, who now teaches in the IUT, was an active participant in the study. The oil and gas division of the Planning Commission, with its chief Dr. Nazrul Islam and deputy chief Nuruddin Mahmud Kamal, provided the secretariat services. The latter was assigned the responsibility of member-secretary of the professional team.

Within about four weeks of the announcement regarding the vital energy study, the government felt the need for formulating a new act and policy options for expediting hydrocarbon exploration and development.

The existing concession/royalty related law was repealed, and the Petroleum Act, 1974, was approved by the Parliament. Almost simultaneously, a new policy entitled Production Sharing Contract (PSC) was also approved by the Parliament.

Meanwhile, the country was divided into 16 (sixteen) blocks, based on ecological considerations. Only 6 (six) were divided into 16 (sixteen) blocks based on geological considerations. Only 6 (six) blocks were assigned to six multinational companies for riskier and higher investment related off-shore activities.

The remaining 10 (ten) blocks were kept for on-shore exploration, exclusively meant for Petorbangla. In fact, the PSC model was borrowed from Indonesia, where it was in practice since the sixties.

We soon entered into an exciting new area of putting technology to work in new ways. Regardless of the logic of any technical and political arguments, one would inevitably recall that behind the formulation of the Petroleum Act, 1974, and PSC, Mr. Nasimuddin Ahmed, then Joint Secretary (later secretary) and Dr. Habibur Rahman, Chairman, Petrobangla played the most vital role.

Thirty-three years later, in 2007, I fondly remember the untiring dedications of Mr. Ahmed Reza (a retired air force officer and muktijoddha), then OSD in the Petroleum and Mineral Resources Division, and his boss late Mr. Hedayat Ahmed (secretary) for dedicating their lives for a proper implementation of the offshore exploration activities.

Yet, through some backdoor, Mr. Saifur Rahman (later financé minister) and Mr. Morshed Khan (later foreign minister) quietly entered into the game as local associates/agents in offshore exploration business and made their fortunes. That was the beginning of touts in the energy sector.

Meanwhile, for procurement of oil, a high powered delegation led by the foreign minister and accompanied by Mr. S.A. Azim, then General Manager of Jamuna Oil Company, and Mr. Rezaul Karim, a senior foreign ministry official, visited Iraq and some middle east countries.

Iraq's Renulea cruide oil was not found suitable for refining at the Eastern Refinery. Chittagong. So, it was excluded from the purchase list for Bangladesh. Only sweet, crude oils were procured at deferred payment, a great relief indeed for a newly independent country. The first oil shock was faced boldly.

Soon it was found necessary to bring at par the status of the chairman, Petrobangla to that of secretary to the government. It was done. Because of the aid recognition by our first political government headed by Sheikh Mujibur Rahman, the chairman/secretary, Dr. Habibur Rahman could, thus, directly, raise inter-ministerial deliberations to the level of minister(s).

The Petroleum and Mineral Resources division of the ministry was officially transferred to Petrobangla. In a sense, a clear autonomy was accorded to the petroleum and mineral resources sector corporation. This decision enhanced the decision making process of the then government.

Such a forward-looking step was reversed after 1975. The bureaucracy regained their authority. But, has the government gained authority over bureaucracy?

Nuruddin Mahmud Kamal is former Chairman of Power Development Board .