The Tribune

EDITOR, The Tribune.

It is incredulous that the Cabinet would sign on to a deal for the eye-popping sum of $5.5 billion (with a B) representing 50% of GDP, and then think that it was going to go down with a drum-roll and a ticker-tape parade. At first whiff, Oban doesn’t pass the smell test.

As the public heat was turned up the Prime Minister went to the House of Assembly to offer a mea culpa. Missteps were made, he said.

Oban is a start-up company in Florida that wants to become a player in the global oil business with a hefty leg-up from the Bahamas.

As a medical doctor the PM knows that the first rule of a trauma unit is to stop the bleeding.

He must act quickly to revisit this deal.

On the surface Oban and their band of merry men might not be reliable partners for the resurrection of the economy of Grand Bahama.

The public can be forgiven for thinking that Oban has probably bitten off more than they can chew.

If nothing else the government ought to have learned an economic lesson from the Baha Mar give-away which despite free beach-front real estate and the economic muscle of the Chinese government bankrolling it still managed to screw it up.

Investors who had no experience operating a mega hotel/gambling resort were given the unfettered right to go and raise money from a sovereign lender who lacked building experience in this part of the world.

The result was the original investor lost his shirt; the lender suffered a black-eye and after a brief dash to the bankruptcy court in the United States we the people ended up with a white elephant that took millions in tax waivers and favours to fix.

Luckily last year’s hurricanes in Puerto Rico and other competing destinations conspired to make Baha Mar a popular resort this winter.

Their rooms filled up fast, although reportedly at rock-bottom prices.

Because we are still suffering from our Baha Mar hangover we can ill afford gambling on the likelihood of Oban turning sour.

We need to know if the civil servants charged with vetting foreign investment projects missed obvious warning signs or if they were pressured by the political directorate to approve this half-baked scheme to build a crude oil refinery and storage facility on Grand Bahama.

For starters, the due diligence report on the chairman of Oban should have triggered church bells ringing in the foreign investment office.

The Chairman had run afoul of US investment regulations that deal with raising money from investors.

To avoid a criminal sanction, he accepted a plea deal.

One of the terms of that deal is that he was barred from having any association with a broker, dealer or investment advisor.

Yet when he knocked on the Cabinet door he was the chairman of Oban which is seeking to raise $5.5 billion from brokers, dealers and investment advisors.

His excuse supposedly is that he is the non-executive chairman and has no management position in Oban.

He couldn’t see how duplicitous it appeared when he signed somebody else’s name to a contract in the public domain, despite the protestations from the Prime Minister that this was a dummy document put up supposedly to bamboozle Bahamian citizens naïve enough to fall for it.

The criminal statues could be referenced to view his action as forgery although a charge would probably fail because even this bumbling chairman probably had no intent to deceive when he impersonated the CEO of his company.

Forgery itself is classified as fraud, something that the chairman has already had to defend before the Securities and Exchange Commission of the United States.

The Bahamas Investment Authority has a duty to satisfy themselves that the projects presented to them actually make economic sense.

The world is awash in oil at this time.

There is over 6 billion barrels of oil in strategic and other reserves around the world.

One billion barrels sits in the belly of super tankers floating at sea.

It is true that China and other rich countries are looking for oil storage and are willing to pay around $1.00 per barrel per month to store oil.

Who wouldn’t want to buy cheap oil now, hold it and then unload it at a profit when the prices go up?

Our proximity to the US gives rise to this plan for a 50-million-barrel oil storage facility that could earn up to $50 million per month at full capacity.

But if US access is the goal then why not build the refinery in Oban’s own back yard in Palm Beach Gardens, Florida just 70 miles west.

Florida jealously guards its environment. Tellingly, the National Trust, which stands guard over ours in not enamoured with Oban.

The FNM came to power on a platform that said that the environment matters.

As for the actual refinery, there is the question of where the crude oil would come from given the fact that the US has the capacity to refine approximately 19 million barrels of crude per day.

Oban is looking at producing 50,000 barrels per day, a drop in the ocean.

There are oil refineries throughout the Caribbean that are struggling today. Refineries in Cuba, Jamaica, the US Virgin Islands, Aruba, Curaçao, Barbados and Trinidad and Tobago would scoff at a 50,000 barrel a day refinery in Grand Bahama.

PetroTrin, owned by the Trinidad government, is refining just 50,000 barrels a day despite an output capacity as high as 175,000 barrels a day.

The Isla Refinery in Curaçao is owned by Venezuela and can go up to 330,000 barrels of crude per day but they haven’t seen that production level in years.

Despite this Oban thinks they can raise $5.5 billion to challenge the titans, and we fell for it.

It is past time for the Prime Minister to reboot his strategy and take control of the optics of debacle.

There is still work to be done to reduce the deficit, tackle crime, create jobs and make sure nobody puts their hands in the cookie-jar.

The bumbling Oban chairman is out although questions remain if he has any interest in the K Family Trust that controls the company.

And the project appears to have been sent back to the civil servants for further vetting.

The opposition PLP must not gloat because their finger-prints are all over this Oban deal.

Our leaders, PLP and FNM, love foreign investors and give them an easy pass in most instances while giving native investors the run-around.

The Prime Minister must shape the narrative surrounding Oban otherwise the narrative will define him.

The people’s time, like their patience, is running out.

THE GRADUATE

Nassau,

April 4, 2018.