• PM’s spokesman says such talk ‘foolishness’
• But project’s new owners made ‘21 approach
• Website talks of approval ‘road map’ review
By NEIL HARTNELL
Tribune Business Editor
Talk of reviving the $5.5bn Oban Energies oil refinery deal has been dismissed as “foolishness” by the Prime Minister’s spokesperson although an “introductory call” was held with the project’s new owners soon after the 2021 election.
Clint Watson initially told Tribune Business that “no one is aware of anything” after Lucayan Trans Fuels, the entity that acquired the rights to the Oban project in 2021, posted on its website that “a road map” for navigating the development through all the necessary government permits and approvals had been “outlined and reviewed” with the Prime Minister’s Office’s delivery unit.
After speaking with the Prime Minister; Jerome Fitzgerald, Mr Davis’ senior policy adviser; Allison Collie, head of the Prime Minister’s Office’s delivery unit; Ginger Moxey, minister for Grand Bahama; and the Bahamas Investment Authority (BIA), he said none were aware of efforts to revive the Oban project or been in contact with investors seeking to achieve such an objective.
“No one is aware of anything with these people. They’re talking foolishness,” Mr Watson said. However, when Tribune Business double-checked to confirm if anyone in the Davis administration had contact with persons purporting to represent Lucayan Trans Fuels, Mr Watson issued a statement in Mr Fitzgerald’s name disclosing that while there was an initial encounter soon after the September 2021 general election nothing had moved beyond that.
“Shortly after the election there was an introductory call with a group representing that they had bought out the group that had an interest in developing the Oban project,” Mr Fitzgerald’s statement said. “They were advised that they would have to go through the normal process and make application through the BIA. There is no evidence that they ever made an application or had any further interaction with this administration.”
Lucayan Trans Fuels was identified as the entity that had acquired the rights to the project in a recent Securities & Exchange Commission (SEC) lawsuit that charged Peter Krieger, Oban’s former non-executive chairman and chief promoter, with defrauding investors in the project of some $5.2m.
This newspaper tracked down Lucayan Trans Fuels’ website, which gives the strong impression that the project is very much active and that talks with the Government about how to progress it to fruition have been proceeding. “The Government of the Bahamas has provided Lucayan with terms, concessions and the legal structure necessary for them to be fully supportive of the project,” was one of the statements on the site.
Rick Duszynski, Lucayan Trans Fuels’ president, in an e-mailed response to Tribune Business inquiries, sought to distance the project from its Oban past and what may have occurred under prior ownership and management. “In reply to your inquiry regarding Oban, other than acquiring its assets in 2021, Lucayan has no association with Oban or any of its former officers. All information about Lucayan’s development project can be found on our website,” he wrote.
Mr Duszynski, though, did not respond to this newspaper’s questions on the current status of the project, whether any negotiations with the Government are ongoing or have taken place in the recent past, and which ministries, agencies and ministers/officials he and the group may have met with. His reference to the website implies that, from Lucayan Trans Fuels’ viewpoint, what is detailed is accurate and up-to-date.
Downstream Advisors, a Dallas-based entity that had performed consulting work and economic impact assessments of the project for Oban, is identified as Lucayan Trans Fuels’ managing/operating partner. The company is said to have invested in the proposed oil refinery and storage terminal and, besides Mr Duszynski, another Downstream executive, Steve Graybill, is named as its chairman and chief executive.
The website largely glosses over Oban’s history, omitting any mention of Mr Krieger’s personal woes and how development stalled so soon after the early 2018 Heads of Agreement signing following media scrutiny of the project’s principals. Instead, it blames the COVID-19 pandemic for any delays.
“Much of the necessary groundwork regarding project siting, environmental implications, Bahamian government requirements and concessions, land rights and front-end engineering was accomplished over the past several years - and with significant investment of resources - by the project’s initial developer, Oban Energies,” Lucayan Trans Fuels says.
“However, the two-year business hiatus forced upon the world economy by the COVID pandemic upended both plans and progress for the original developers, which allowed Lucayan to acquire the project’s assets in 2021 and reignite its forward momentum.”
Lucayan Trans Fuels is described as a Delaware-based entity that was incorporated in 2021 specifically to acquire and deliver what is now described as the Grand Bahama Petroleum Processing and Logistics Project. However, the concept appears not to have changed significantly from that which was pushed by Oban.
With global fuel and energy demand having recovered post-COVID, the website asserts: “A low complexity, Bahamian-based refinery processing WTI (West Texas Intermediate) exported from the US Gulf Coast on foreign flag VLCCs (very large crude carriers), delivering diesel and jet fuel to the US east coast and/or European markets, and supplying petrochemical feedstock to the Far East, will be a much needed, and significantly profitable, addition to the global energy trade.
“The LTF project is a planned $2.5bn multi-phase petroleum processing and storage development project located 35 miles east of Freeport on the island of Grand Bahama. Its first phase will include the construction of a 250,000 barrel per day atmospheric distillation unit, product treating facilities, utilities and two deep-water loading and unloading platforms sized to accommodate VLCC sized vessels.
“The subsequent two phases of the project will include a second 250,000 barrels per day distillation train and a 20m barrel crude oil terminal. The facility will be a low complexity refinery designed to process imported West Texas Intermediate crude oil into high value transportation fuels and chemical feedstocks.”
Lucayan Trans Fuels’ website identified The Bahamas-based Mosko Group as the project’s general contractor, which is the same role it would have had under Oban. However, it also makes clear that progress hinges on securing a so-called “sponsor”, or entity that will own and/or operate the site. This appears not to have been accomplished yet, which is why the project has not progressed to seeking the necessary approvals.
“Preliminary expert reports have been reviewed with the appropriate Bahamian agencies, and discussions with respect to property leases, tax concessions and Bahamian labour have been held with high-level government officials. The pursuit of final approvals and terms are awaiting the identification of an owner/operator to sign on as the project’s primary sponsor before moving through the official process,” Lucayan Trans Fuels said.
“With a geographically advantageous location 50 miles off the east coast of Florida, undeveloped coastal land with deep water access, and a sizable workforce, the island of Grand Bahama presents a full complement of the resources and capabilities required to support investment in the project. In addition, the Government of the Bahamas has provided Lucayan with terms, concessions and the legal structure necessary for them to be fully supportive of the project.
“Also, the filing of preliminary reports regarding the environmental impact and safety of the site have been through the initial review process, and a road map for navigating the project through all final legislative and agency approvals has been outlined and reviewed with the Prime Minister’s Delivery Unit office, responsible for business development within the Commonwealth of The Bahamas.”
Stating that the Heads of Agreement that Oban signed with the Minnis administration will provide a foundation for a new deal with the Government, Lucayan Trans Fuels said: “Construction of the project on Grand Bahama will take place over the course of 42 months requiring 2,511 total man-years of Bahamian labour throughout the three phases of its development.
“The Project also includes the construction of a minimum of 200 off-site houses (funded by the Project, but managed by agencies of the Government of The Bahamas) and an ongoing programme to train local employees. The Project will be obligated to hire 80 percent Bahamians during construction and operation of the facilities, but with the ability to make exceptions for skilled work positions where it is not possible to find Bahamians with the necessary qualifications.
“Considering the number of workers needed for all three phases, approximately 480 Bahamians will be hired during construction, with about 200 Bahamians eventually required to fill permanent operating jobs.” A 15-year tax exemption, with two further 15-year extensions, was also discussed by the website.