Friday, October 07, 2016

This Day In Clarkland...When Will We Be Chad?

BeenCheated
BeenMistreatedVille



From Bloomberg:

Exxon Mobil Corp. was ordered to pay a record $74 billion fine in Chad for underpaying royalties in the central African nation where the company has been drilling for 15 years, according to a court document...

{snip}

....The two other companies named in the case are Chevron Corp. and Malaysia’s state-owned Petroliam Nasional Bhd (Petronas)....



No word yet whether our very own NatGas Minister Mr. Coleman has plans to get out in front of this one for Petronas this time around.

Because, after all, last Friday, there was a last time.

OK?


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Tip O' The Toque to Grant G, in the comments to a previous thread.
Header/Sub-Header-induced presque-vuish earworm?....This!


14 comments:

JasonS said...

We will never be Chad . In order to be Chad we need to actually get royalties to be under payed royalties. Haha royalties, that's rich.

Grant G said...

A little more.

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http://qz.com/802916/a-court-in-chad-fined-exxon-mobil-a-record-figure-of-75-billion-in-fines/

"In 2006, president Idriss Deby gave Chevron and Petronas 24 hours to leave the country for failing to pay taxes. The case was later settled. Yet in March 2014, the government filed another legal claim against the Exxon Mobil-led consortium for more than $800 million in unpaid taxes.


Chad appears to be following in the steps of its neighbor Nigeria in dealing firmly with large multinationals. MTN, Africa’s largest phone company, was ordered to pay Nigeria $5.2 billion last year for failing to disconnect its unregistered sim cards. The company reached an agreement in June this year to pay a record $1.7 billion.

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We could learn a thing or two from Chad..a so-called third world nation..

If Big energy don't pay, throw em out and fine their asses off...hardball?

No, how about big energy honouring written contracts, ..

Chevron you say..?

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Chevron adds $7b to 'in house' loan, critics say move designed to shift income offshore

A multinational corporation labelled Australia's worst tax avoider by members of a Senate inquiry has added $7 billion to an "in house" loan that critics say is designed to shift billions of dollars of income offshore.
Chevron's latest financial accounts show that a shell company in Delaware has now lent a total of $42 billion to Chevron Australia Holdings Pty Ltd, the Chevron subsidiary developing the vast Gorgon gas project in Australia's northwest.
"It really shows continuing contempt for the Australian Government and the Australian people," Jason Ward, a researcher with the union-backed ITF, told the ABC.
"This is really a tax scheme designed to avoid payments, once profits start to flow on the Gorgon project and the Wheatstone project."
Dr Mark Zirnsak, a spokesman for the Tax Justice Network, also said it looked like Chevron was trying to avoid paying taxes in Australia.
"It does look like further tax dodging by Chevron, loading itself up with debt from the US tax haven of Delaware in order to avoid paying taxes here in Australia," Dr Zirnsak, who is also a director for the Justice and International Mission Unit of the Uniting Church Synod of Victoria and Tasmania, said.
Chevron maintains that the arrangement between the Delaware shell company and its Australian subsidiary is a bona-fide loan to fund construction on the gas projects.
But the arrangement will have the effect of reducing Chevron's tax bill in Australia by many billions of dollars.


http://www.abc.net.au/news/2016-06-09/chevron's-$7b-loan-aims-to-shift-income-offshore,-critics-say/7498002

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That information was posted sometime ago by..

http://powellriverpersuader.blogspot.ca/2016/09/justin-trudeau-christy-clark-we-are.html

Tom Kirkman said...

Welcome to the wonderful world of doing Oil & Gas business in Africa.

As I mentioned earlier, Petronas specializes in dealing with "difficult" countries. The PNW LNG negotiations were an eye opening experience both for Canada and B.C.

Recall that Petronas was unable to buy its way out of the locals in B.C. not supporting the project. The $1 billion cash offer to locals in exchange for support for the project was rejected. That was definitely an unexpected shock to Petronas. There is a motto in Malaysia, said repeatedly by the PM: "Cash is King". I don't believe Petronas had a Plan B after the $1 billion was rejected.

Royalties and taxes in African Oil & Gas are usually a messy piece of business. Chad is going way overboard in this case, though. This is just the start of the negotiations between Chad and ExxonMobil / Petronas. Canadians will be well advised to see how this plays out. Much will depend on the terms & conditions in the contracts.

So, question to B.C. locals...

What *exactly* are the commercial terms and conditions for taxes, royalties, export duties, etc. which Petronas has agreed to pay for the PNW LNG project? EXPECT LOOPHOLES. (Sorry for yelling.)

Petronas is exceedingly experienced in crafting international commercial agreements that are highly favorable to them. (That's said in admiration, by the way. They are *very* good negotiators. That's a specific skill set.)

I'm going to suspect that the Canadian politicians who negotiated the commercial framework with Petronas got ninja-ed and still don't realize it. The "fine print" in contracts that many seem to gloss over can be quite important indeed, as far as loopholes, liabilities, escape clauses, cancellations, etc.

In Oil & Gas contracts, Terms & Conditions can be more important than the monetary value of the contract.

So far, I see Canadian politicians got played in the PNW LNG negotiations. That's even before a contract has been signed. I'd love to read a draft of the proposed PNW LNG commercial agreement, to see what hidden surprises are most likely buried inside.

Tom Kirkman said...

Probably not off topic for this thread:

http://wwe.news24.com/news24/Africa/Zimbabwe/zimbabwes-mugabe-in-surprise-visit-to-malaysia-20161007-90

Zimbabwe's Mugabe in surprise visit to Malaysia

Kuala Lumpur - Zimbabwe's 92-year-old strongman Robert Mugabe will pay a surprise one-day working visit to Malaysia on Friday, the Southeast Asian country said.

Malaysia's government said late on Thursday that Mugabe will have a meeting with Prime Minister Najib Razak but otherwise gave scant details on the purpose of the rare visit or the reason for the last-minute notification.

Tom Kirkman said...

@ Ross K, you may wish to consider a new thread for this topic:

http://www.cbc.ca/beta/news/politics/cabinet-decision-pacific-northwest-lng-1.3796552

Economic benefits of LNG project outweighed 'significant adverse' effects, cabinet decided

Federal cabinet decided environmental harm would be balanced by economic value of project

The federal cabinet knew there would be "significant adverse environmental effects" from the Pacific NorthWest LNG pipeline but approved it anyway, believing economic benefits of the project justified the decision, according to Privy Council documents.

The orders are the written public record of cabinet decisions made behind closed doors.

They show in clear terms what was at stake as the cabinet made its decision.
...
============

Dox:

http://s3.documentcloud.org/documents/3125926/Pacific-Northwest-LNG-Cabinet.pdf

Don F. said...

The first decision and the one Justin Trudeau will remember the rest of his life!
He has in one swift move destroyed his future on all fronts.

RossK said...

The FedLib 'approval' is most definitely worth discussing.

Including, of course, a discussion of the significance (and intent?) of all those conditions that were attached to it?

(i.e. was it actually a triangulatory publicity stunt designed to have a seven month lifespan to expire in May of 2017...And, more tangentially, whether or not it is Mr. Trudeau the younger's first Sista Souljah moment when it comes to dealing with/distancing himself from 'extremist' environmentalists?)


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Don F. said...

This is a sell out, money for the Environment, it couldn't be any clearer.
Whatever other outcomes there may be Mr. Trudeau and his Environment Minister have blatantly made clear their position. They have done so at the peril of loosing all trust of First Nations, Environmental advocates science and many Canadians, whether this project is built or not.
The courts now will consider this in their decisions of First Nations pertaining to this project.
I can't phathom Mr Trudeau loosing all this to help Christy in the election.
But who knows, maybe he is that stupid.

RossK said...

Don--

I reckon this is more likely a signal to those that (really) matter that, despite the rhetoric (especially that spouted before the last federal general election), the FedLibs have come back to their center-rightish neoliberal happy place.

And if they can say 'yes' to Ms. Clark and her MarkyMark KloutKlub brigade at the same time?...Well...So much the better.

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Lenin's Ghost said...

Lol... Trudeau and company are the same old corporate pigs they have always been. The uneducated sheeples fucked up again.
I told them but who would listen?

Poopheads!

RossK said...

I fear that you were and still are righter than a weeping Westcoast rain on that one LG.


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Grant G said...

Australia "No LNG revenue for decades" or never

http://www.smh.com.au/federal-politics/political-news/turnbull-government-called-on-to-explain-where-australias-offshore-gas-wealth-is-going-20161009-gryaoi.html

coming soon to B.C. courtesy BC Liberal corporate selloiuts

RossK said...

Oh boy...

Thanks Grant.


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Anonymous said...

bypassing the BCUC... we now can control the narrative