Energy Ministry reviews second A&V audit

AZARD ALI

The Energy Ministry is reviewing the contents of a second audit report on A&V Drilling's output to state-owned Petrotrin. The exercise comes as A&V defends itself against findings, also in an audit, that it overstated crude oil production at its wells which have since been seized.

Energy Minister Franklin Khan told Parliament last Friday that this second document is being investigated, after A&V's attorney Ramesh Lawrence Maharaj SC submitted a copy to Prime Minister Dr Keith Rowley.

Maharaj told media recently the supplemental report was dated August 21, 2017 and followed an initial audit four days before on August 17 which examined crude oil discrepancies. Petrotrin withheld $800 million from A&V claiming the lease operator inflated its output in what became known as the "fake oil scandal".

Petrotrin's chairman Wilfred Espinet has since said he did not know about Maharaj's revelations about the April 21 report which he claimed the company failed to consider in its assessment of A&V's production.

"He (Ramesh) has a supplemental report? I don't know what he is talking about and what it means. Petrotrin has may be a billion reports. If he believes it has relevance I would imagine the process is to go to the courts," Espinet said.

The April 21 document titled Controls Governing Transmission of Crude raised questions about Petrotrin's systems to accurately measure crude received from operators. In an example of the findings, the second internal audit discovered 5.5 feet of water in tank 57 at the Pointe-a-Pierre refinery that was undetected by custody transfer and oil stocks personnel. The amount of water exceeded the maximum by 0.5 feet which would guarantee dry crude at suction height.

And if this volume of water persisted and increased, the report said, water could enter the refinery with disastrous consequences. The report, signed by four auditors, said, "internal audit is certain that this occurred because personnel at both custody transfer and oil stock were not complying with the standard operating procedures and appropriate management action should be taken against these employees."

To date, Petrotrin has not taken any such action.

The April 21 report was signed by Avianne Maingot (internal auditor), Mahendra Persadsingh (senior internal auditor), Vidya Jaisingh (internal auditor) and Dianne Lochan (manager internal audit). The report concluded that the inaccurate measurement of water in the tanks at Pointe-a-Pierre at high/low gauges will cause the calculated net sales volumes to be skewed.

Continuing on the water level in the crude tank, the report concluded that it was evident that the low free-water levels recorded on the sales tickets for January and February 2017, resulted in overstated net crude volumes.