The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

OBAN Energies has moved to reassure its $5.5 billion project is ‘for real’ amid concern that the ongoing controversy could deter other investors from coming to Grand Bahama.

The oil storage terminal/refinery developer, in recent upgrades to its website, named 40-year oil industry veteran John ‘Jack’ Lipinski, who began his career with Texaco, as one of two senior advisory directors.

The other is George Matelich, one of three ‘managers’ at Oban Energies Management, the entity that replaced controversy-ridden non-executive chairman, Peter Krieger, as Oban Energies’ manager.

Mr Lipinski, whose qualifications ‘check out’ based on research by Tribune Business, most recently served as chief executive and president of CVR Refining, a US-based company that operated a 185,000 barrel per day refining system and 6.4 million barrel storage facility.

He held the same post with its parent, CVR Energy, until retiring at year-end 2001, having previously worked in executive management positions overseeing refining activities at another US energy giant, El Paso.

According to Oban Energies’ website, Mr Lipinski will “advise and assist in the implementation of Oban’s refinery and terminal strategy, and [have] a lead role in helping Oban develop strategic relationships within the energy industry”.

Mr Matelich, meanwhile, is a senior advisory partner and managing director at Kelso and Company, an investment advisory outfit. He “will play a key role in advising and assisting in the implementation of Oban’s overall business strategy”.

Mr Matelich, whose background is in finance, was named in Florida corporate filings as one of three ‘control persons’ together with Donald Berg, a Philadelphia-based attorney, and Florida realtor, Barry Glaser, for Oban Energies Management.

The latter has replaced Mr Krieger and Satpal Dhunna, Oban Energies’ president, as the ‘manager’ or controlling entity for the company that has signed the Heads of Agreement with the Government for the $5.5 billion oil refinery/storage terminal in east Grand Bahama,

The March 12, 2018, move appears to be an example of corporate ‘musical chairs’, and an effort to ensure Mr Krieger fades into the background and assumes his promised “ambassadorial” role following revelations of his involvement as a defendant in two securities/investment fraud related lawsuits.

The changes are in many respects a distraction from the real issue, which is the identities of the beneficiaries, protector, trustee and settlor(s) for the K Family Irrevocable Trust, which the Prime Minister identified as Oban Energies’ ultimate beneficial owner.

Tribune Business was previously informed by sources close to developments that much of Oban Energies’ funding, at least initially, is coming from Mr Krieger’s wife’s family, especially his parents-in-law, and that his involvement was as a representative of their interests.

Meanwhile Mick Holding, the Grand Bahama Chamber of Commerce’s president, told Tribune Business he had been concerned that the continuing controversy surrounding the Oban Energies project - and the microscopic scrutiny applied to its principals and backers - would deter other investors from coming to Grand Bahama.

“I don’t think all the attention it received, both in the traditional media and the social media, has helped the reputation of the country in terms of people looking to do business here,” he said.

“Having said that, I think things have quietened down a little bit, although the environmental groups are still very concerned.... I did have concerns a couple of weeks ago about what other potential investors might think about doing business in the Bahamas, but these things blow over.

“I think it won’t honestly have any long-term damage. If there were other deals around or thinking of investing when all that was going on in the media it may have made one or two think again.”

Mr Holding said the Oban Energies project should be allowed to proceed provided it “operates according to the highest and strictest environmental standards”, given the potential boost it represents for an island “desperate” for jobs, investment and “critical mass”.

“Any investment that brings jobs and helps to boost the economy of the island is welcome,” he told Tribune Business. “We desperately need more investment, more jobs, and I always say the island lacks critical mass.

“Existing businesses have no real opportunity to grow, expand and prosper when the market is limited to the population of the island at the moment, which it is. For all businesses to benefit, we need to increase population, create jobs and create critical mass, and everyone can benefit.

“Oban or whatever, we need more of it, but they have to meet the standard. That is paramount and we can’t compromise on that. We just have to find a way to make it work.”

Mr Holding said the same environmental, health and safety regulations that apply to the oil and gas industry internationally should also operate in the Bahamas, adding that it was “up to the Government” to ensure Oban Energies has the necessary financing.

However, Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, yesterday told Tribune Business that the developer’s revelation that the project will be leasing 690 acres of Crown Land epitomised the lack of transparency surrounding the approvals process.

Chester Cooper, the PLP’s deputy leader, said Oban Energies’ annual $1.2 million lease payment meant it was paying a “measly” $1,700 per acre, and Mr Aubry said the 690-acre “sounds like a substantial amount of Crown Land”.

“We have to have a clear path as to how Crown Land is allocated,” the ORG executive director told Tribune Business, pointing out that the deal with Oban Energies would again likely provoke concerns that the Government favours foreign developers over Bahamians when it comes to land availability and accessibility.

Mr Aubry said this issue was “key to our sustainability”, especially for small and medium-sized Bahamian businesses (SMEs).