Sat | Apr 21, 2018

Petrotrin ends contract with firm at centre of ‘fake oil’ scandal

Published:Friday | December 29, 2017 | 12:00 AM
Petrotrin headquarters in Trinidad.

State-owned oil company Petrotrin says it has terminated the contract of A&V Oil and Gas Limited, a company at the centre of a 'fake oil' controversy in Trinidad & Tobago.

In a statement, Petrotrin said it had given notice to the lease operator "associated with the discrepancies in reported oil production and actual receipts revealed by its Internal Audit Department earlier this year".

A forensic audit report by the Canada-based Kroll Consulting Canada found that Petrotrin paid A&V for oil produced between January and June, which it did not receive.

Opposition Leader Kamla Persad-Bissessar, who first made the 'fake oil' issue public, had called on the government to immediately terminate Petrotrin's contract with A&V Oil & Gas and for a criminal investigation to be launched by the police.

But Prime Minister Dr Keith Rowley said that the matter would be dealt with by the Petrotrin board of directors and the energy ministry.

In September, Petrotrin announced that it had launched an investigation into the reports of inconsistencies in the volumes reported from its exploration and production fields.

"Petrotrin confirms that investigations are in progress with respect to reports of inconsistencies in the volumes reported from our exploration and production fields, and that reported as received at our Pointe-a-Pierre refinery. These investigations are focused on the volumes for fiscal 2017 and the Ministry of Energy and Energy Industries has been informed," the company said in a brief statement then.

In its statement announcing the termination of the contract, Petrotrin said it has given written notice of termination to the lease operator this week after it communicated its findings to the operator and gave it an opportunity to respond.

Petrotrin's chairman, Wilfred Espinet, said that while some commentators have expressed concern at the rate of the company's progress in the matter, it was critical that the oil company's board act only after careful consideration of all relevant matters, including the response of the lease operator to the findings.

"Adherence to process is the most important component of this exercise. We are being guided by expert counsel, and we are committed to ensuring that we do things in accordance with proper procedure," he said.

Former Attorney General Ramesh Lawrence Maharaj is challenging the decision to terminate the contract, saying he had written to the company giving it a January 2, 2018 deadline to respond.

"If none is forthcoming, we have the option to go to court for an injunction to block their termination decision. A breach of contract can result in Petrotrin paying over TT$1 billion in damages," Maharaj told the Trinidad Guardian newspaper.

- CMC