State-oil company Petrotrin may be counting down the days to closure but Senior Counsel Ramesh Lawrence Maharaj says the legal matter involving the company and lease operator A&V Oil and Gas Limited lives on.
Maharaj said the outstanding matter involves millions of dollars remain outstanding and the two companies are said to have been “in communication” on the establishment of a three-member panel of arbitrators to determine the merits of Petrotrin’s case and the merits of A&V’s defence and claim for compensation and damages.
A&V was the lease operator on Petrotrin’s Catshill field in Moruga shot into the national limelight after an internal audit in August last year found that the lease operator was being paid for oil which it did not supply.
A&V denied the allegations and an investigation was conducted by Petrotrin which retained the services of Kroll Consulting Canada Company to investigate the matter. The forensic investigation confirmed the findings of the internal audit.
An additional report, commissioned from global oil and gas consultants Gaffney Cline also found that the Catshill reservoir was not capable of producing the volumes in question.
Responding to claims in the political arena that the matter involving A&V may be over because of the closure of the State-oil company, Maharaj made it clear that is not so since he said no court has as yet determined the merits of Petrotrin’s case against A&V or his client’s defence against Petrotrin.
But Maharaj said Petrotrin never gave A&V an opportunity to call evidence and for his client to cross-examine Petrotrin’s witnesses.
Maharaj said the only issue which has been determined so far is that A&V is not entitled to get an injunction to prevent Petrotrin from acting on the termination notice of the contract.
The matter wended its way through the local courts and went all the way to the Privy Council and in February this year, Petrotrin was given the all clear by the Privy Council to terminate all contractual obligations with A&V Oil and Gas.
Maharaj said Petrotrin is holding the sum of TT$84,699,879.47 in an escrow bank account pending the determination of the arbitration.
According to Maharaj, the money in question was due to be paid to A&V by Petrotrin for the supply of crude oil for the period July 1, 2017 to December 31, 2017. “These monies are being held by Petrotrin as a security for any monies found by the arbitrators to be due by Petrotrin to A&V,” he said.
He said if the arbitrators decide in favour of A&V, the company will be entitled to recover the sums, and any additional monies owed by Petrotrin and any compensation for the early termination of the contract.
A&V is also contending that Petrotrin owes them for the supply of crude for the period January 1, 2018 to February 28, 2018 in the sum of US$2,284, 398.40, or TT$15,305,469.28.
A&V and Petrotrin entered into a contract in 2009 under which A&V was contracted to extract crude from the Catshill Field. The 10-year contract would have ended in November 2019.
Maharaj claims that in the past nine years A&V invested the sum of TT$1.1 billion based on its contractual obligation to Petrotrin.
Under the contract Petrotrin had the power to suspend the contract for “reasonable cause,” and also provided a dispute resolution process which involved negotiation, mediation and arbitration.
Petrotrin Chairman Wilfred Espinet confirmed that Petrotrin has agreed on one member of the panel, A&V has agreed to one person and the third member of the panel is yet to be selected.
While Maharaj is expecting that arbitration would be completed early in 2019, Espinet could not say whether he agreed with that timeline.
“ I don’t have a clue how long it will take, remember the arbitration team is not together yet,” he said.
Espinet also confirmed that the money involved has been “secured,” pending the outcome of the arbitration.
