Monday, March 12, 2018
By NEIL HARTNELL
Tribune Business Editor
AN outspoken former Cabinet minister has branded the $5.5 billion Oban Energies project "a hoax", and blasted: "It will not happen." Leslie Miller, who was minister of trade and industry from 2002-2006, told Tribune Business there was "no need" for the proposed oil storage/terminal refinery because no such plant had been built on the US eastern seaboard and Gulf coast since 1977.Suggesting that this raised major questions about the level of sustainable demand for the Oban Energies facility, Mr Miller said the seeming absence of any major oil industry players from involvement in the project created further doubts about its viability.
The ex-PLP MP, querying who Oban's customers will be, suggested BORCO's deep-pocketed owner, New York-listed Buckeye Partners, would have restarted refining activities at that site if there was demand for an offshore refinery in close proximity to the US east coast.
Calling for the Minnis administration to admit it had "screwed up, apologise and move on", Mr Miller argued that disclosures such as the Ernst & Young forensic audit into the Water & Sewerage Corporation (WSC) were merely designed to distract the Bahamian people from the Government's missteps.
He urged it to focus on "doing something meaningful for the lives of the Bahamian people", and to realise: "You've got a country to run, not a little penny shop through the corner."
Mr Miller, expressing surprise that the Government would "insist on going ahead" with the Oban Energies deal despite all the controversy and concerns swirling around it, said no major petrochemical plant or refinery had been built in the US Gulf coast or eastern seaboard since 1977.
Emphasising that he had researched the issue, the ex-minister said the last such facility was constructed in Corpus Christi, Texas. Given the lack of such activity 'Stateside', Mr Miller told Tribune Business: "There isn't a need for this project in the Bahamas.
"They're closing those projects down, not building them. It's a hoax. It [Oban] will not happen because there's no need for it to happen. There's no need for this facility. It shouldn't be discussed. My contention is not that the Government signed a bad agreement; my contention is it's not going to happen. It cannot happen and will not happen."
Mr Miller pointed out that Buckeye Partners would have entered the offshore refining market through BORCO if the opportunity had been there. However, Oban Energies and its partners beg to differ.
The developer, on its project website, said eastern Grand Bahama had been chosen for the $5.5 billion project based on the deep water access available to large tankers, and the land access to the ocean. Statoil's presence meant the area was already a 'brownfield' site, lessening the environmental concerns, while the location is also well-removed from populated areas.
Oban Energies, like BORCO, said it was aiming to exploit Grand Bahama's US proximity and location on major shipping routes to serve as an offshore distribution/break bulk hub to an energy industry struggling for deep water ports on the Gulf Coast and south-east US.
Larger vessels from North Africa, Europe and Asia can have their loads broken down, and transferred to smaller vessels, who will then take the product from Grand Bahama into the US. And US oil and energy exports can use the same route in reverse to get their products to market.
Tribune Business sources subsequently said the development was designed to exploit the US 'Jones Act', which requires foreign-flagged vessels leaving US ports to make at least one call abroad before returning to the US. Much like the cruise lines, foreign-flagged tankers would bring crude product to Oban for refining before returning to the US with the finished blend.
However, Oban Energies has been embroiled in controversy ever since its Heads of Agreement signing, when it was revealed that Peter Krieger, its non-executive chairman, had 'plea bargained' and settled both criminal and civil charges relating to a multi-million dollar US securities fraud.
Tribune Business also revealed that Mr Krieger was accused of misappropriating monies invested by a CLICO (Bahamas) affiliate, although that case was dismissed on a legal technicality. Further controversy then arose over whether he had signed the Heads of Agreement for Satpul Dhunna, Oban's president, even though the document states it is the latter's signature.
"There's no need for more discussion," Mr Miller told Tribune Business. "This one cannot work. Why waste time with it? Why build up the hopes of people in the US for something not needed on the eastern seaboard or elsewhere?
"Everyone is going to LNG. These plants are being discontinued. Why come up with something that makes no sense? That's the only way I see it, Neil, it cannot happen."
Mr Miller said a further concern was the apparent non-involvement of major oil industry and refinery players in the $5.5 billion Oban Energies project. The Government, and the developer itself, have both given the impression that major interests stand behind the project, but have yet to provide any proof.
"Where are you going to get the product from to store and refine?" he queried. "Who are the sellers? Who are the parties that will utilise this refinery in the Bahamas, who's going to buy the products from you in the Bahamas?
"Why should we amend the Industries Encouragement Act for the first time in 50 years for this company? It has never been amended. Why amend this for these guys who have no capacity to do this damn thing? It makes no damn economic sense."
Urging the Government to be honest, Mr Miller said: "This was just a mistake they made. Move on and try and find a project that will work. Say sorry, we screwed up, apologise and move on."
And, calling on it to cease what he termed 'distractions', the ex-MP added: "Why don't you run the country in the best interests of the Bahamian people instead of dealing with guys like Oban.
"Do something meaningful for the lives of the Bahamian people. Do something right for the Bahamian people. Create some jobs. You're sending people home on Friday, and on Saturday you have a Job Fair. Why do it? Please, I'm tired of it. I haven't got time for foolishness.
"Grow up, man, grow up please. You've got a country to run, not a little penny shop in the corner. It's not East Street. This is the Commonwealth of the Bahamas. Get real. Try and run the country, and do it the best you can."