Extreme caution needed with companies bidding for future oil blocks-Goolsarran

Mar 14, 2018 News

Chartered Accountant, Anand Goolsarran

The Coalition Government has signalled its intention to consider competitive bidding for the remaining oil blocks, but a dose of extreme caution, is what critics like Chartered Accountant, Anand Goolsarran, are recommending.
The former Auditor General made his sentiments known in his recent writings.
The columnist reminded of the government’s announcement that nine companies are interested in the allocation of the remaining oil blocks and that it is exploring options for both direct engagement and selective bidding.
Goolsarran reminded, too, that the Petroleum Advisor to the Government, Dr. Jan Mangal, had advocated the application of competitive bidding procedures to avoid the risk of corruption. Goolsarran said that he fully supports this approach, which includes conducting detailed background checks of companies bidding for the oil blocks.
On this note, Goolsarran stated that one of the interested companies is Petrobras, a Brazilian State-controlled company, which was embroiled in the largest corruption scandal in the history of that country that led to nation-wide protests in 2016 and contributed to the impeachment and subsequent removal of the Brazilian President Dilma Rousseff.
Goolsarran noted that the scandal, uncovered during a money laundering investigation nicknamed “Operation Carwash”, involved inflating contracts for construction and service works and “kicking-back” the difference, estimated at US$3 billion, into the personal bank accounts of senior executives of Petrobras, certain political figures, and the ruling party to fund its election campaigns.
The Chartered Accountant said, “We must therefore be extremely careful in our selection process and ensure that the terms and conditions of any new agreement represent the best interest of the country.”
In addition, Goolsarran said that in going forward, the Government should endeavour to not repeat the mistakes made in relation to the Production Sharing Agreement with ExxonMobil.
“We must also ensure that the related legislation and regulations, including our Procurement Act, are revised or amended so that any decision on the allocation of the remaining oil blocks is supported by legislation.”

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