KEVON FELMINE

kevon.felmine@guardian.co.tt

For­mer Petrotrin chair­man Wil­fred Es­pinet is dis­put­ing sug­ges­tions that the board of di­rec­tors he led cost tax­pay­ers mil­lions of dol­lars, now that Trinidad Pe­tro­le­um Hold­ings Ltd (TPHL) has agreed to pay A&V Oil and Gas Ltd $120 mil­lion to set­tle its law­suit in the “fake oil” mat­ter.

In a paid news­pa­per ad­ver­tise­ment yes­ter­day, Es­pinet said the on­ly new cost TPHL (Petrotrin’s par­ent com­pa­ny) has to pay was $18 mil­lion. He ex­plained that when the then Petrotrin board ter­mi­nat­ed A&V’s con­tract in De­cem­ber 2017, it put the $84 mil­lion it owed the com­pa­ny in es­crow pend­ing a res­o­lu­tion of the sit­u­a­tion.

He said the $120 mil­lion set­tle­ment com­pris­es the $84 mil­lion, ap­prox­i­mate­ly $16 mil­lion in in­voic­es from A&V and $18 mil­lion that the TPHL board of di­rec­tors has agreed to pay as a set­tle­ment. 

“I think it is al­so needs to be point­ed out that the for­mer Petrotrin board, which I chaired, did not cost the tax­pay­ers of Trinidad & To­ba­go mil­lions of dol­lars, as has been er­ro­neous­ly stat­ed in some quar­ters,” Es­pinet said.

His ad­ver­tise­ment fol­lows the pub­li­ca­tion of a me­dia re­lease by A&V CEO Hanif Naz­im Baksh last week. In that re­lease, Baksh said his com­pa­ny had saved tax­pay­ers from hav­ing to fork out mil­lions of dol­lars by agree­ing to set­tle its le­gal dis­pute with Petrotrin. This was in re­sponse to TPHL go­ing against the “ex­treme­ly strong views” of its le­gal team and choos­ing to set­tle in­stead of chal­leng­ing the ar­bi­tra­tion pan­el’s de­ci­sion in the mat­ter.

As part of the set­tle­ment, TPHL al­so grant­ed A&V a new ten-year En­hanced Pro­duc­tion Ser­vices Con­tract (EP­SC) with one of Petrotrin’s suc­ces­sors, Her­itage Pe­tro­le­um. Baksh said A&V recog­nised that Petrotrin may not have been able to pay the debt and costs of a judge­ment and that the Gov­ern­ment would have had to step in to pay the dam­ages. With­out the set­tle­ment, he said those dam­ages could have amount­ed to $800 mil­lion.

Dubbed the “Fake Oil” scan­dal, Op­po­si­tion leader Kam­la Per­sad-Bisses­sar first raised the is­sue on a po­lit­i­cal plat­form in Cou­va in 2017, when she leaked the con­tents of an in­ter­nal au­dit re­port which sug­gest­ed that A&V had in­voiced Petrotrin for oil it did not de­liv­er. 

This was a week af­ter the gov­ern­ment had ap­point­ed a new board at Petrotrin to deal with the com­pa­ny’s debt of more than $12 bil­lion.

In his state­ment yes­ter­day, Es­pinet said the sto­ry evoked pub­lic out­cry and calls for an in­ves­ti­ga­tion. He said the sto­ry al­so took on a po­lit­i­cal di­men­sion af­ter the press had re­port­ed that Baksh was a friend of Prime Min­is­ter Dr Kei­th Row­ley.

Es­pinet ex­plained that A&V in­voiced Petrotrin $84 mil­lion for crude oil it had al­leged­ly pro­duced, but ac­cord­ing to Petrotrin’s in­ter­nal au­dit re­port, the in­voice was in­con­sis­tent with the vol­umes re­ceived at the Pointe-a-Pierre Re­fin­ery.

“Hav­ing just as­sumed of­fice, the board had a re­spon­si­bil­i­ty to as­cer­tain the ve­rac­i­ty of the in­ter­nal au­dit re­port and to act in the in­ter­est of the peo­ple of Trinidad & To­ba­go who, ul­ti­mate­ly, were the own­ers of Petrotrin and its as­sets. In this re­gard, the board sought in­de­pen­dent ex­ter­nal ex­per­tise,” Es­pinet said.

He said the board con­tract­ed Kroll Inc of Cana­da and Gaffney Cline & As­so­ciates to re­view the re­port. He said both con­sul­tan­cy firms con­firmed the in­ter­nal au­dit find­ings and based on this, the board ter­mi­nat­ed A&V’s con­tract.

He not­ed that A&V at­tor­ney Ramesh Lawrence Ma­haraj SC and Baksh’s calls for the set­tle­ment of the mat­ter to be made pub­lic. 

Of this, how­ev­er, he said, “This, in my opin­ion, is an at­tempt to sani­tise the sit­u­a­tion.”

He end­ed by say­ing that in 2017, Petrotrin re­port­ed a loss of $2.4 bil­lion af­ter tax. The for­mer board ceased Petrotrin’s op­er­a­tions in No­vem­ber 2018 and a year lat­er, Her­itage Pe­tro­le­um Ltd’s ex­plo­ration and pro­duc­tion ac­tiv­i­ties record­ed a prof­it of over $1.4 bil­lion for a 10-month pe­ri­od in 2019.