Amid transfer pricing scandal… “We’re not afraid of BP, Shell or BHP”- TT Minister tells Parliament

May 18, 2018 News

TT Energy Minister, Franklin Khan

Energy Minister of Trinidad and Tobago, Franklin Khan recently noted that his country is not afraid of international energy companies. He said the Government had laid bare the issue of transfer pricing and, at current prices, TT was estimated to be hemorrhaging US $1.5 billion per year.
“We laid it out bare because we eh ‘fraid nobody you know. We seek the interest of the people of Trinidad and Tobago. I will say here, without fear of contradiction, we not ‘fraid of no BP, no Shell, no BHP (Billiton) you know. We will be fair, we will be respectable because they are investors.”
He was at the time contributing to a debate on Tuesday night on the Variation of Appropriation Bill in the TT Senate.
Khan said the country was hurting the worst with transfer pricing and the real value of cargo was not being returned. He said TT only taxed at the well head, so energy companies could be getting $8 per MMBTU in Japan or in South Korea and declaring $1.80 back to the government. “This is obscene and this government would not sit idly by and allow this to happen.”
Khan stressed the Government was not in any war with the energy companies as is shown by their investment profile in this country.
He also spoke about the Dragon gas field deal with Venezuela, to develop the cross-border fields of Loran-Manatee and Manikin-Cocuina.
“Let me just make the point that this is a commercial deal between the government of Venezuela and the Government of Trinidad and Tobago. It has absolutely nothing to do with the politics of Venezuela. It matters not to us who holds the rein of power in Venezuela. The deal is supposed to stand commercial scrutiny so that any administration installed in Venezuela could see the veracity of a deal like this. So we feel confident when the deal is signed that within a month it will stand the test of any administration who holds power and authority in Venezuela.”
He also spoke about Prime Minister Dr Keith Rowley’s meetings with the heads of BP and Shell in London last month. He said Rowley informed the heads that as private and multinational companies, they have a right of a fair return on investment. But as a sovereign state and owners of resources, this country has a sovereign right to extract fair economic rent for the resources. He said Rowley also pointed out that the two things were not mutually exclusive and could be worked out.
“And despite all the naysayers and all the prophets of doom, both BP and Shell had agreed.”
Khan reported, from the London meetings the parties would appoint empowered teams to proceed post-haste with these negotiations. He said the Government’s team, headed by him, and included Ministry in the Ministry of Legal Affairs Stuart Young, National Gas Company president Mark Loquan, former finance minister Wendell Mottley, attorney Richard Beckles, energy advisers Richard Jeremie and Leroy Mayers and representatives from the law firm of White and Case. Khan said for far too long this country has signed agreements without international advice “and we are not going to that anymore.”
He said the Opposition was calling for property tax to be abandoned with increased oil revenue and he described this view as “symptomatic” of the United National Congress. See link online: (http://newsday.co.tt/2018/05/17/khan-were-not-afraid-of-bp-shell-or-bhp/)

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