The President of Trinidad and Tobagos’ state-owned oil company Petrotrin has resigned over a scandal involving discrepancies between reported oil production in the exploration and production operations in the Catshill Field operated by A&V Oil and Gas and the actual production receipts at the Pointe-a-Pierre refinery.
Fitzroy Harewood’s resignation takes effect on February 28, 2018 and comes weeks after a report found that the so-called “fake oil scandal” was real.
According to the T&T Guardian; in a circular to employees on Friday, Petrotrin chairman Wilfred Espinet said Harewood had submitted his resignation on Thursday and it was accepted by the board of directors.
The circular read, “The board of directors has accepted the resignation of Petrotrin President, Mr Fitzroy Harewood. Mr Harewood submitted his resignation on November 30th and it will take effect on 2018, February 28th to allow for a smooth transition.”
The sudden announcement is said to have taken employees by surprise, the Guardian reports.
In was on August 17 that a Petrotrin internal report had raised concerns about the amount of oil that was received by the refinery from A&V Oil and Gas compared to what the company claimed it had produced and sent to the refinery, the Guardian stated.
Opposition Leader Kamla Persad-Bissessar then raised the issue on August 17, alleging there was corruption at the state-owned company, calling it fake oil scandal and seeking to link Prime Minister Dr Keith Rowley and his Government to the issue.
Two external audits have also since confirmed the internal audit that there was a discrepancy between reported oil production in the exploration and production operations in the Catshill Field operated by A&V Oil and Gas and the actual production receipts at Pointe-a-Pierre discovered by Petrotrin’s Internal Audit Department in the period January to June 2017.
The findings of the internal audit report as confirmed in a forensic audit report submitted by Kroll Consulting, of Canada, and also in a report commissioned from global gas consultants Gaffney Cline, which found that the Catshill reservoir was “not capable of producing the volumes in question.”
Figures provided in the internal audit report for the period July 1-12, signed by Petrotrin’s chief audit executive Rajkumar Bissessar, showed a daily average of 3,589 barrels per day had dropped significantly in the period July 13-31 and August 1-10, when production declined to 1,369 barrels and 1,396 barrels of oil. The shortage reported for July, according to the report, was 36,302 barrels, down from 111, 006 barrels in June.
The internal audit team estimated production for the month of June would have been “over-stated by about 90,000 barrels, which works out to an overpayment of US$2.97 million.” For the six-month period January to June, it was estimated that “Catshill over stated its production by at least 350,000 barrels and Petrotrin would have overpaid US$11.5 million (TT$80 million).” As a result, Petrotrin was said to have paid royalties of approximately US$1.86 million to the Government for crude oil “not received during the period 2017 January to June.”
Harewood was appointed in November 2015 by the then board led by Andrew Jupiter. At time of his appointment, the Opposition had raised concerns about whether he was the best man for the job. In addition, the Oilfield Workers’ Trade Union (OWTU) has been calling for his removal, the Guardian said.