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Trusting oil companies and keeping citizens in dark cost Trinidad US$17 Billion in six years
By Kiana Wilburg
Now that first oil is here, Guyana is moving forward with preparations for the sale of the first three cargoes of oil it will collect as early as February 2020. But the world of oil trading is known to be a murky business, says Energy Advisor, Dr. Anthony Paul.
TT Local Content Expert, Anthony Dr. Paul
Dr. Paul made these and other statements during a recent appearance on Kaieteur Radio Programme, Guyana’s Oil and You.
There, he highlighted the costly mistakes his home country, Trinidad and Tobago, made in the oil trading business.
According to Dr. Paul, the failure of politicians to inform the citizenry about the decisions taken on the sale of Trinidad’s gas as well as trust in companies to sell the resource on the nation’s behalf, resulted in Trinidad losing billions of dollars in revenue.
To be specific, Dr. Paul said that such a concoction of gullibility and opaqueness resulted in US$17B in taxes being lost.
Guyana’s budget for 2019 is approximately US$1.5B. It therefore means that the money Trinidad lost could have funded Guyana’s economy for more than a decade.
The Trinidadian said, “The mistake we made is that we had this capability (of being able to understand the market and selling oil on our own) but we did not have it for natural gas. Instead of building it for gas, we asked the company to market the gas on our behalf and that is where they took us to the cleaners. We were taken to the cleaners because we trusted them with what we have.”
The Energy Advisor added, “Here is how we got taken to the cleaners. The sellers of our gas were selling to marketing companies who are marketing arms of their parent company. In other words, they were selling to affiliated companies and they were reporting prices that were below market prices or even below the prescribed price in the law.”
When the government finally did an independent audit, Dr. Paul said that the consultants found that the value reported by the companies for the gas from 2010 to 2016 was US$30B less than the actual value.
“…And with our tax regime, this meant the government would have been able to get, had they done due diligence, at least US$17B in taxes,” the Trinidadian shared.
When this was made known to the citizenry, Dr. Paul noted that there was obvious opposition. But only a change of government was able to put an end to the abuse and advantage that the CARICOM founding member suffered.
Considering Trinidad’s experience, Dr. Paul said it is critical that Guyanese know everything that is going on, that the policy leaders understand the market and nothing is left to chance.
He said that the message for Guyana is that without its citizens being informed, public servants and politicians may not be performing their roles adequately and the country can suffer significant harm.
Dr. Paul added, “While, we want to trust our public officials, who are being paid and have sworn to an oath to uphold the laws and protect our interests, we must have a way to hold them accountable. That is only by transparency and access to information that allows citizens to validate what they are being told…”
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