Chevron not paying rents for six months, claims owner

The owner and the tenant of a building in upscale Gulshan in Dhaka locked their horns about a lease agreement as the tenant wants to quit but the owner wants them to stay.

Here the tenant is multinational oil and gas company Chevron that has been housed at Khandker Tower since 2012. The owner claimed that the multinational oil and gas company had not been paying rents and other service bills for the last six months.

Amid the rental row, the US company started to move its office to a new location breaching the terms of the lease agreement, according to the landlord.

Engineer Khandker Badrul Hasan, the owner of the Khandker Tower, sought the energy ministry’s intervention into settling the dispute as Chevron Bangladesh was not responding to his frequent calls, according to a letter sent to the senior secretary of the energy and mineral resources ministry, recently.

The gentleman also wrote to the state minister for power, energy and mineral resources urging him to resolve the problem.

Denying the allegations, Chevron said there was no reason for not paying rents. “The rent has been paid in advance. Besides, all the activities are going on as per the lease agreement. In addition, we have sought the help of the law enforcement agencies as the owner of Khandker Tower intervened our moving.”

Chevron signed a 15-year lease agreement with the building owner. It operates in Bangladesh under the Production Sharing Agreement (PSC) with Bangladesh’s Petrobangla. In this case, all the expenses of the multinational company have to be approved by Petrobangla.

“We came to know the matter about the rent dispute between Chevron and Khandker Tower authorities," Petrobangla Director (Production Distribution Agreement-PSC) Engineer Md Shahinur Islam told Business Insider Bangladesh, recently.

He said Khandker Tower took the matter to the court. “Action could be taken if the rent agreement is violated.”

Chevron rented six floors of the Tower. The volume of each floor is about 45,000 square feet. But since April this year, the multinational company has allegedly stopped paying the rent and service bills.

Chevron owes the Tower more than Tk 12 crore in the last six months, claimed Engineer Hasan in the letter.

Earlier, Chevron had vacated three of the six floors. However, they are using the parking space where 42 cars have been parked. As a result, other organisations housed in the Tower fail to park their cars, said the letter.

“We are financially in a mess. If Chevron wants to quit as per the agreement, they have to inform us one year in advance. Chevron has broken the contract too. They verbally announced six months ago that they would leave the building,” said the tower authorities.

Chevron started moving their offices in the last week. Whenever the photographer went to Khandker Tower in Gulshan to take photos of the office transfer on Friday afternoon, Chevron's security guards stopped him from taking pictures. Police were also present at the time.

Chevron confirmed that it is relocating its Dhaka office from Khandker Tower, Gulshan-1, to a new office at Centre Point, Gulshan-2, by September, said Chevron Bangladesh's Communications Manager (Corporate Affairs) Shaikh Zahidur Rahman.

“We have paid our rent to the Khandker Tower authorities in advance and are conducting our activities in line with the lease agreement,'' he said.

In the unpaid rent, he said, "We have paid the rent in advance. All the procedures have been completed as per the agreement.”

"Our relocation activities have been illegally obstructed. So, we had to file two general diaries with the local police station," he said.

A 15-year lease agreement was signed between Chevron Bangladesh and the owner of Khandker Tower in August 2012.

To comply with the long-term agreement, the building was constructed maintaining the highest international standards and as per Chevron requirements. The office rent and other benefits were given at a special discount considering the long 15-year lease agreement. The building owner provided security as per the international standard, according to the letter.