BP agrees to pay $1b

BP, the biggest natural gas producer in the country, has agreed to pay the Government $1 billion for long-disputed, outstanding claims, while the government will repay nearly US$100 million in value added tax (VAT) refunds.

Prime Minister Dr Keith Rowley said yesterday at the post-Cabinet media briefing, Diplomatic Centre, St Ann’s, that in the next three days, the govenment and BP will sign off the agreement where the energy giant will repay this country “upwards of $1 billion” for these “legacy issuess” as they related to compesation for fiscal gas matters, while the government will work on a strategy to facilitate the VAT repayments. “The company understands our financial situations and is prepared to work with the government on the issue of VAT refunds,” Rowley said.

These conciliations were negotiated during the PM’s trip to London last week, where he led a team including Ministry of Energy and National Gas Company officials in meetings with top energy companies. Rowley said TT was also able to get BP to agree to reduce the ceiling on how much the company can carry forward tax liabilities from one year to the other. This practice reduced goverment revenues, he said, and both parties were able to “finalise actual figures where an agreement is doable.”

The company also agreed to pay royalties through 2018-2020, even though it is not legally obligated to for the period 2018-2027. These royalties first mentioned in the Budget last October, where instead of just taxing profits, the government introduced a 12.5 percent royalty on production “at the well-head.” These natural resources like oil and gas were part of the country’s heritage, Rowley said, and “once you are extracting our heritage, you have to pay the royalty.”

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