“Misconception” and “misinformation” are the two words Oban Energies President Satpal Dhunna used to brand concerns about a clause in the Oban Heads of Agreement (HOA) between the government and Oban Energies for the $5.5 billion oil refinery and storage facility for East Grand Bahama.
According to some opposed to the agreement, the clause in question – clause 5.1 – will allow the facility’s construction to continue regardless of any conclusion made by an Environmental Impact Assessment (EIA). In other words, the government will essentially be “locked in” to continue with the project, even if studies determine that it will not be environmentally viable.
This issue is one that Dhunna said has been misinterpreted.
“Just so we are clear,” Dhunna said in an exclusive interview with Eyewitness News in the lobby of the Lighthouse Resort in Freeport, “this project will not proceed – meaning it will not be constructed – it will not operate without the approval and the appropriate licenses and permits from the government of The Bahamas.”
Clause 5.1 of the agreement states: “If, as a result of the government’s review of an EIA, the government determines that the relevant portion of the development (as proposed to be constructed) cannot be implemented in an environmentally safe and sustainable manner, then the government shall propose that the developer take additional specific precautions and or make specific modifications to the proposed development in order to address the government’s specific concerns.”
It goes on to add that “the developer, prior to beginning construction, can take additional precautions and/ or make changes to the development that would be commercially reasonable to address the government’s specific concerns.”
The HOA also states that the developer has the right to abandon the project and “the government shall not have the right to terminate these heads of agreement based upon any EIA report but, instead shall work with the developer to mitigate any concerns.”
According to the agreement, if the government does not provide any such comments to the EIA within the aforementioned 60-day period, the EIA shall be deemed acceptable.”
Despite what the agreement spells out, Dhunna, who spoke with Eyewitness News just one day after a heated town meeting held in East Grand Bahama said, that the project can be halted.
He disclosed that Oban negotiated those terms with government for two reasons – investor confidence and financing.
“As a foreign-direct investor, we wanted the confidence from the government that we can continue with this project with their support subject to the right conditions… If the government determined that our initial impact assessment and mitigation is not appropriate, we would like the opportunity to invest further money and resources to find the right technology and the right engineering designs to mitigate any concerns that government may have,” Dhunna said.
“Equally the most fundamental part of a project of this type and size is the financing…In the negotiations of the deal we wanted to ensure that if we needed more time and need to invest more of our share holder capital we could do so. … when we have completed the studies and financing is still available then the project can still proceed.”
At the “ceremonial” signing at the Office of The Prime Minister on February 19, the then non- executive chairman Peter Krieger, who signed Dhunna’s name on the document and has since resigned, stated that the EIA of the proposed site would be completed 45 days from that signing date. Dhunna however revealed that the process has yet to start.
“We are not there yet,” he said.
“I want to be honest and transparent with you. I think the 45 days was an accurate statement with certain starting points and as a starting point, based on certain information and consultation with the BEST commission and other matters around the environment.”
Dhunna went on to explain that a meeting with the Bahamas Environment, Science and Technology (BEST) Commission and consultants, took place with an on-site visit last Tuesday.
The company, he said, has since submitted their terms of reference for government and await their reviews on what has been done so far.
“We are hoping that it (government’s review) will arrive on Monday (today) and we can start toward the finalization for the Environmental Impact assessment. One thing I want to confirm is that is that the EIA started over 12 months ago… there is only a certain level we could have taken it.”
Outrage has been expressed by environmental groups including The Bahamas National Trust (BNT) and The Save the Bays organizations about the project.
Executive Chairman of The BNT Eric Carey said, a meeting is planned with Oban officials this week. The BNT has roundly rejected the project, stating that it poses an environmental threat to three national parks in the East End area.
The project is expected to be constructed in that community 1.5 miles east of the present Statoil storage facility on 690 acres of crown land.