A&V Oil and Gas, the company at the centre of an investigation by Canadian consulting company Kroll at state-owned Petrotrin, has reportedly hit a snag in its attempt to sell its lease on the Moruga East Block to Shandong Deshi Petroleum Group Company Limited of China.
The field is separate and apart from the Catshill Field from which A&V is currently supplying oil to Petrotrin and which has been the subject of an internal and independent investigation.
A&V Oil and Gas is the operator for the Moruga East Block under an Incremental Production Sharing Contract (IPSC) with Petrotrin, which dates back to November 18, 2009. That agreement expires in November 2019.
An agreement between A&V and Shandong was signed by A&V CEO Haniff Baksh and the chairman of Shandong Deshi Limited on November 11, 2016, with details and conditions of the sale of the lease, which was estimated at US$19.5 million, which Shandong was to pay in four tranches.
The first payment of US$6 million was to have been made on or up to 30 days after Shandong was granted the lease, another US$6 million payment was to have been paid within one year, the third payment of US$5 million was to have been made two years after Shandong was granted the new IPSC and the final payment of US$2.5 million was to be paid within three years after Shandong was granted the IPSC.
There was another alternative for payment in the sum of US$14 million in five tranches.
The T&T Guardian has confirmed that A&V had been trying to sell their interest in the Moruga Field to Shandong since 2015.
Petrotrin chairman Wilfred Espinet yesterday told the T&T Guardian that the Petrotrin board approved the commercial terms of the sale of the lease in August 2015. But this was “subject to the fulfilment of a number of conditions.”
However, he said the period stipulated under the conditional approval “expired without fulfilment of the conditions.” To date, he said those conditions have not been satisfied and “the bona fide operator for the field is A&V Oil and Gas Limited.” He confirmed the contract between Petrotrin and A&V expires in 2019.
Espinet said there is no way that the agreement can become operational without the approval of Petrotrin.
“A company cannot come in and operate without holding a title to the lease,” he said.
Espinet said such a sale could only be finalised “when the conditions are met, they will come back to us and say we met these conditions and on the basis of that Petrotrin can then say we agree to this transfer and advise the Ministry of Energy that we have agreed to the transfer to take place.”
The T&T Guardian tried to contact A&V CEO Baksh yesterday to find out whether he was still seeking to pursue the agreement with Shandong and whether they were close to fulfilling the obligations outlined by Petrotrin for the sale of the lease, but calls to his mobile phone went unanswered