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Friday 20 October 2017
Local

Petrotrin ‘digs deep’ into fake oil deal

The Petrotrin board will be “digging deeper” into alleged fraudulent oil sales to the state oil company by one of its lease operators in order to obtain documentary proof required to take decisive action in the case of wrongdoing, new chairman Wilfred Espinet said yesterday.

“There are indications, but there has to be clearly a case of wrongdoing supported by documentation, and that is what the board is now pursuing,” Espinet told the Newsday yesterday in a telephone interview.

On Sunday, Opposition Leader Kamla Persad-Bissessar announced at a United National Congress rally that there was a “fake oil” scandal at Petrotrin, quoting from an internal audit that questioned the shortfall between oil produced at one of the company’s leased fields in South Trinidad and what being sold back to the refinery. On Monday, the audit was leaked and shared on social media.

Espinet, who only received his letter of appointment last Thursday, first saw the internal audit report alleging the fraud against the company via social media.

He had been informed, he said, that the leaked copy was indeed authentic. The members of the board have since been given the report for review.

“The board recognises that it has a responsibility. This is not (how) we would have started (our tenure) but it is what is here and we have to protect our assets. The board takes full responsibility for what has to be done,” Espinet said.

Espinet said the board is ensuring that all the processes that resulted in the problem will be reviewed and made more robust.

He added the report was “interim”, and part of a process that has already begun to identify and deal with the alleged discrepancies. He noted that such irregularities can take place in environments such as the lease operator system, which are governed by contracts, but any action—including action against employees—has to take place within proper legal and common law practices.

“We (the board) have satisfied ourselves that a process has begun,” he said.

He said there are “a number of prioroties” facing Petrotrin, but the most fundamental is governance—something of which the current situation is indicative.

The Audit

According to the report, Internal Audit was first asked to investigate discrepancies by the Head Custody Trasfer Besesar Bachan after the company’s Refining and Marketing Unit’s (R&M) Custody Transfer claimed that it had been receiving significantly less crude oil than the Exploration & Production Unit had been reporting. The audit was completed and submitted in August 2017.

After its investigations of the crude oil output of the Catshill field in South Trinidad from January to June 2017, compared to historical data, as well as the output of surrounding fields, the Internal Audit unit said the evidence suggested there had been fraudulent activity in the Catshill field and that the operator (A&V Drilling and Workover Company Ltd) had been overstating its production for at least 6 months, and that Petrotrin personnel had been colluding with the operator to manipulate the fiscalisation process (legal transfer of the material from one party to another) to make it appear that more oil had been produced than in actuality.

“Internal Audit is of the view that there was wilful misconduct on the part of Vidya Deokiesingh while executing his duties as Crude Procurement Specialist from January to June 2017,” the report stated.

A&V Ltd is owned by Nazim Baksh, whose daughter, Allyson, is a current government senator. Vidya Deokiesingh, who has since been removed from his post as Crude Procurement Specialist, was the PNM candidate running against Opposition Leader Kamla Persad-Bissessar for the Siparia seat in the 2015 General Elections.

On Monday, Energy Minister Franklin Khan sought to distance the government from the audit and the individuals involved in the alleged fraud, while excoriating the Opposition Leader for, he claimed, "putting a political spin" on the matter.

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