Government may have to overcome a number of legal hurdles before it receives the US$100 million pay day from the presumptive sale of the country’s lone oil terminal, the Barbados National Terminal Company Limited (BNTCL), to regional petroleum giant Sol Group.
Chief Executive Officer of Rubis Caribbean Mauricio Nicholls has put the Freundel Stuart administration on notice that it was prepared to pursue all legal avenues to prevent an oil storage monopoly, should the sale of BNTCL get the blessing of the Fair Trading Commission (FTC).
Nicholls had earlier revealed that Rubis was prepared to invest the tens of millions of dollars required to restore its defunct terminal facility at Spring Garden.
However, it has since been revealed that as part of the sale agreement, recently made public by the FTC, Government has committed to maintaining a single terminal here until 2032, albeit under private ownership.
Speaking Wednesday morning at a press conference at the Warrens, St Michael office of Virgo Communications, Nicholls contended that the agreement had made it impossible for Rubis to maintain its market share while at the mercy of its competitor.
The Rubis executive said given his company’s approximately $100 million investment here, he was not prepared to walk away without a fight.
“We are prepared to fight the battle with all the elements the law gives us to fight that battle because we are fighting for our survival and our future here in this country. We are prepared to fight as hard as we can. We will fight it legally, ethically, with the right arguments and the right forums, but this is a huge issue for us,” Nicholls said.
“It threatens our survival and longevity in this country and we like to do business in this country. We came here five years ago and we have made huge investments in this country.”
Nicholls further argued that “what is happening to Rubis would be a stinging message” to foreign investors, while charging that if it became impossible for Rubis to continue operations here as a result of the deal, no other fuel company would be willing to pick up the slack as long as their competitor controls the only storage option.
“What sort of message are we sending about Barbados that after making such a significant investment we turn around and give the entire power to a competitor? It isn’t just about Rubis and Sol, we are setting a precedent and it’s a dangerous one,” he argued.
This notwithstanding, Nicholls said Rubis was holding out hope that the FTC would rule against the proposed merger, as the consumer would be the biggest loser if a fuel monopoly were allowed to emerge.
“It is a very difficult battle that we are facing. It is extreme pressure for the Government of Barbados to prop up their finances; we know they need the money. So the Government has a lot of interest in moving ahead with this transaction. But there is a structure of governance of a country that has these institutions that are supposed to do their jobs and in theory supposed to be independent of the Government. So the Fair Trading Commission is one of them and they have a duty to do what is best for the competition and the consumer,” Nicholls explained.
Nicholls said the directors of Rubis Caribbean had accepted that the sale would earn Barbados much-needed foreign exchange.
To this end, Nicholls implored Government to consider the option of joint ownership, offering US$50 million for a 50 per cent stake in the oil terminal.
“We have been discussing this situation frequently with our headquarters in Paris and they are very concerned. This morning I got the approval to officially say that we are ready to offer US$50 million for 50 per cent. We are ready to review the sale purchase agreement rapidly and we are ready to sign very shortly after that and we are committed to doing that so that the transaction, if the Government and the FTC agree to sell it jointly, will close by March. That way the Government can receive the revenues that they need,” Nicholls revealed.