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Auditor General raises concerns about oil data

Published: 
Friday, November 17, 2017

As state oil company Petrotrin awaits the findings of Canadian company Kroll into the “fake oil” scandal relating to overpayment to a contractor for oil from the Catshill Field, the Auditor General is raising concerns about the process being used to verify oil and gas supplied by oil companies to the Ministry of Energy.

In his April 2017 report, Auditor General Majeed Ali said he has been reporting on lack of data for the last three years and the only response from the ministry is that verification of oil and gas is done by calibration of meters at fiscalisation points and witnessing of metres at loading of crude at ports.

The Auditor General said the Measurement Unit of the Ministry of Energy is constrained by a shortage of manpower and lack of measurement training. As a result, 75 per cent of planned activities are not done, so the accuracy of revenue from royalties and share of profits from oil companies cannot be assessed.

According to the Auditor General, at the time of the audit of the Ministry of Energy in January, royalties from 11 oil companies as at September 30, 2016, were outstanding. In addition, quarterly and annual reconciliations of royalties due and received were not produced for nine of the 11 oil companies as required by petroleum regulations.

The report also highlighted concerns about quarrying operations which fall under the ambit of the Ministry of Energy. It noted that of the 103 quarry operators in the country only seven have valid licences, 76 are operating with expired licences and 19 are operating with no licence. There is one new application to operate a quarry.

From a sample of 20 operational quarries selected for audit, royalties were not collected from 16 operators.

The report also noted that five operators mining on private land did not provide proof of ownership of the mineral rights in order to be exempted from paying royalties and evidence was not seen that royalties were received for the financial year 2015/2016.

The Auditor General said production data relating to the quantity of minerals mined, processed and sold for 17 operators was not submitted.