by Richard Coulson
Published in The Tribune March 27, 2018
The Oban Saga: Not all Black
Light is beginning to appear dimly at the end of the tunnel – the dark and murky tunnel that we entered a little over a month ago. On February 19th Prime Minister Minnis used the full panoply of his office to celebrate the “ceremonial” signing of a Heads of Agreement (or something) calling for a $5.5 billion refinery project on Grand Bahama to be created by an unknown Florida company incorporated less than two years ago as Oban Energies LLC.
That inept ceremony , performed hastily to satisfy the PM’s hero hubris , soon unraveled into public catastrophe. Our vigilant press discovered the Oban signatory, the rotund Chairman Peter Krieger, had many legal blackballs in his past. He promptly denied his importance: he was nothing more than Oban’s non-executive “ambassador”. His name was scrubbed from the company website, with resignation shortly following.
A week later the PM’s office released a 41-page document said to be the “real “ HOA, bearing the signature of President Satwal Dhunna. Real or not, it was denounced by every reader as a slipshod effort that left many questions floating and put our environment at risk. The Bahamas National Trust, guardian of our national parks and natural beauty, emphasized that it had not been informed of the project’s exact location and “could not envisage a scenario” under which it would be acceptable.
Nevertheless, Mr. Dhunna took a full page defensive ad in both our periodicals citing all his own efforts and unnamed “oil industry titans” as backers, and making extravagant claims of technical and financial support. One Bahamian reader called it an “insult to our intelligence.” Mr. Dhunna’s own background came under sharp scrutiny, showing an employment record of only five years in a low level job that his own PR inflates to “Managing Director”, with ambiguous other ventures until he surfaced in 2016 on Florida state records as a manager of Oban, jointly with Krieger.
Finally, on March 21st during the House budget debates, Dr. Minnis admitted his initial “missteps” in announcing the project prematurely without due diligence, but blaming much of the fault on the former PLP government. His only answer to the many open questions was the disclosure that Oban is owned by the “K Family Irrevocable Trust”—which of course tells us nothing.
Last week, new light began to glimmer. Mr. Dhunna faced a contentious Freeport town-hall meeting to give the hard news that Oban had leased 690 acres of Crown Land two miles east of the Statoil Terminal, with the refinery well inland to avoid marine pollution. The crowd’s reaction was a mixture of positive and negative. Also, a new Florida company, Oban Energy Management LLC, was incorporated to run the project. The updated Oban website reveals the important changes: Mr. Dhunna continues as President, but for the first time executives of impeccable credentials are identified as Senior Advisory Directors: John J. Lipinski, recently retired CEO of CVR Energy, owned by prominent US investor Carl Icahn together with a NYSE-listed refiner; and George Matelich, a Managing Director and Senior Partner of Kelso & Company, a major New York private investment firm that has committed billions to business ventures over its 40-year life.
With men like this in charge, Oban’s eventual success is feasible. But it will require meetings with our Government that will be long and difficult. The most shocking omission in the present HOA is the total absence of any Government share in the refinery’s operations. A refinery is simply a through-put deal for buying crude petroleum and selling refined products. As a new company, Oban must find both its own its own suppliers and customers, and make a profit on the intermediate refining process. Our country, like any sovereign host, is entitled to participate . We must have either equity ownership, or better, a percentage royalty on revenues which could far exceed the piddling $1.2 million annual Crown Land rent.
Dr. Minnis should recuse himself from all negotiations about royalties and the other complex issues that are sure to arise under the HOA. Although well-intentioned and an expert physician, he has shown himself as incompetent in this field. The Cabinet should turn over the responsibility to a new Sovereign Wealth Authority, chaired by Minister of Trade & Industry Brent Symonette, with Deputy Mike Maura of the Arawak Cay Port and members including a senior lawyer, accountant , merchant and civil engineer, whose careers have trained them in state -related business affairs..
From day one I have wondered why this project is named “Oban”. Research shows the word only attaches to the Scottish resort town where once I took a ferry to the Hebrides and where the incomparable Oban Single Malt Whisky is distilled. Is there a quiet group of Scots investors, canny and secretive as ever, who will appear as the ultimate backers? I will ask Mr. Dhunna if, as expected, he visits Nassau this week. There could be plenty of worse outcomes.
Who is being Job-Hunted?
Surprising features about our economy can be learned from reading Help Wanted ads. We don’t employ just bankers, check-out clerks and hotel staffers. A recent ad by Grand Bahama Shipyard listed thirteen positions that needed filling, describing jobs that I had never heard of—not cushy management slots but tough, demanding tasks like Marine Scaffolders (“no fear of heights”), Steel Plate Fitters (“must be able to lift 50 lb. –night shift will be required”), and Diesel Engine Specialist (“technical diploma in Mechanical Engineering”). Although so-called blue-collar jobs, these are not for dummies; reading of plans or blue prints is required, or operation of specialized equipment like welding arcs or acetylene torches. And many demand 5-10 years’ experience.
I imagine a fair portion of these needs cannot be filled locally. For the necessary foreigners, is management blocked by six months of bureaucratic paperwork to get work permits, while vessels wait for desperately needed repairs? I hope that a modus operandi has been arranged with the Immigration Department so that we can match the efficiency of Rotterdam or Newport News.
As our shipyard seems to be booming by serving the ever-growing fleets of monster cruise ships, can it encourage spin-off businesses to bolster the Grand Bahama economy? Could our technicians repair the myriad delicate electronics that infest every modern ship, or even manufacture replacement items? Could we mix the special paints applied to acres of bottom and topsides? Stock the spacious freezers with produce from our super-markets rather than wait for return to Miami or Port Everglades? Maybe Bahamian art reproductions could be adapted for staterooms and public spaces. Or Bahamian designs used for curtains, bedding, toweling and upholstery. We should be able to capitalize on these huge floating hotels sitting immobile in our drydocks for month-long periods. We have plenty of smart young entrepreneurs willing to take a risk for a reward.
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Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.
