Petrotrin given green light to terminate contract with A&V Oil
Petrotrin has been given the all clear by the Privy Council to terminate all its contractual obligations with A&V Oil and Gas.
The State-owned oil company announced the termination of the operator’s contract on December 22, 2017, in a bid to protect its interest following the fake oil scandal.
On Monday, the Privy Council denied A&V permission to appeal a previous ruling made in the local court of appeal that allowed Petrotrin to terminate the contract, which included the State-owned oil company taking into their possession A&V’s assets.
The ruling concludes a temporary injunction which prevented Petrotrin from ending the contract.
The injunction was granted February 15, 2018. A&V sought to challenge Petrotrin’s decision of withholding an $8.9 million payment, which fell under the terms of the agreement between both parties.
History on the case:
In 2009, A&V was granted a ten-year license from Petrotrin to operate its onshore oilfields in Catskills, Moruga. The lease operator was named in the fake oil scandal which, when investigated, revealed that there was a discrepancy between the oil produced and the actual production receipts at Point-a-Pierre.
An audit exposed that Petrotrin paid $100 million to A&V Drilling, for oil which was not supplied. Petrotrin said the conclusion of its audit department had been confirmed by an independent, forensic audit conducted by Canadian consultancy firm, Kroll Consulting Canada Company.
The Kroll audit was commissioned by Petrotrin’s board of directors. Additionally, another report found that the reservoir was incapable of producing the volumes in question, causing the investigation to be widened to include the year 2016.
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