Tank Expansion Ground Breaking Ceremony at West Indies Oil, Company Ltd

It is significant that so early in this New Year we are witnessing the start of a project that will bring at least 75 new jobs as well as significant revenues to Antigua and Barbuda.

 

We are starting the year as the Government intends us to continue – by getting projects off the ground that will accelerate economic growth, increase employment and earn new money.

The Government is keenly aware that there is great anticipation amongst our people for increased and accelerated economic activity.

We know that everyone in our society, who has lived through the economic decline of our country between 2006 and 2014, understands that transformation does not happen overnight.

We are also aware that the people of our nation appreciates that, in its first 18 months in office, the government had to stabilize the financial system that was near collapse, and fix the myriad problems of non-supply of water and repeated interruptions of electricity; significant unemployment among the young, miniscule aid, diminished foreign and local investments and intense competition for its main industry – Tourism.

These are on-going tasks, particularly as we inherited a bankrupt government overburdened with unpaid debt and no development prospects in sight.

Added to this litany of woe was a failed health service, where even the basic laboratory equipment and live-saving machinery was non-existent.

Every day, the Government continues to tackle these problems meaningfully and steadfastly.
We are putting the people first.

We are putting the welfare of the people at the epicenter of our focus.

And, we are demonstrating our duty of care, not just by talking but by doing.

Nothing could be more expressive of the Government’s care and concern for every single person in our society than our rapid response to the tragedy that befell Miss Teen Xplosion, Shaveesa Gasper.

As you know it was arranged for her to be sent to a burn centre in Martinique, and now to a hospital in Paris.

All our hearts went out in sympathy with her.

And, this Government is certain that there is no one in our society that begrudges any help that we can extend to her.

I know that the Honourable Molwyn Joseph and all the staff of the Ministry of Health and the Medical Benefits Scheme remain committed to restoring the prospects of a good life for this beautiful young lady.

Distinguished Guests,

I know that the remarks I have made so far might seem to have little to do with the business for which we are gathered this afternoon.

But, that is far from the truth.
While our country is an economy, it is also a society.

And just as we expect the people of the society to serve the economy, so should the economy serve the people.

The two are intertwined and integrated.

We need productive, energetic and diligent people to build the economy, so that, in turn, the economy can deliver the jobs, the health care, the education facilities and the safety and security that people expect.

That is why the opening of this project this afternoon is so important.

It is not just about constructing storage tanks; it is about creating employment; it is about strengthening the economy; it is about building the capacity to deliver the betterment that our people want.

In practical terms, we have gathered today to witness the start of a forty- million dollar investment in the upgrading of the West Indies Oil Company (WIOC) by the building of three new tanks to store an additional 500,000 barrels to the facility.

In turn this will provide jobs for at least 75 persons with all the ancillary benefits that their employment will bring, including increased contributions to the Social Security and Medical Benefits Schemes and the beneficial effects of their spending on the business sector.

Local businesses also stand to benefit directly from this investment by WIOC.

For instance, providers of heavy equipment, cement, aggregate, industrial gases and paints, just to name a few – all of them have an opportunity to sell their goods and services in the construction of this project.

This is the multiplier effect on our economy in action. The spin offs will be significant.

Further, upon completion of this project WIOC will be better able to compete aggressively with other storage terminals within the region.

It will also provide our strategic partner, PDVSA of Venezuela, with storage to competitively supply the OECS territories.

In passing, I would make the point that, unlike in the past, this government is transitioning our relationship with Venezuela away from begging and borrowing to partnership and mutual benefit.

We want the people of both Venezuela and Antigua and Barbuda to benefit from our financial relationship.

We believe that such mutual benefits are the foundation of a sustainable relationship that both the people of Venezuela and Antigua and Barbuda can uphold and support.

Further, the export of increased oil-product by WIOC will earn the company greater revenues not only for itself but for the Government and people of Antigua and Barbuda as the owner of 51% of the company.

Today, therefore, we are witnessing not just a leap in WIOC’s development, but a significant jump in the path of rebuilding our country’s economy.

It is one of many projects that we will witness coming into being in the course of this year.

I want to take a few minutes to do what we in Antigua and Barbuda describe as “giving Jack his jacket”.

In other words, I want to recognize and praise the person who gave the leadership, the vision and the creativity to putting the nation of Antigua and Barbuda in the beneficial position it enjoys today with the West Indies Oil Company and the gains it brings to our economy.

The credit belongs singularly to the Honourable Gaston Browne, Prime Minister of Antigua and Barbuda, a leader not only with a glorious vision for the country’s development but also the capacity to negotiate and to bargain at the tables of high finance to achieve it.

In recent days, others have sought to purloin the credit for this remarkable achievement and contribution to our national well-being.

Let me set the record straight by setting out the unvarnished and unbridled facts of the matter:

In 2007 the previous administration, headed by the Honourable Baldwin Spencer, started negotiations with National Petroleum Limited (NPL), the then majority owners of WIOC to purchase their 75% shares.

In January 2008 the previous administration signed a Share Sale and Purchase Agreement with NPL agreeing to pay US$81,000,000 for the NPL’s shares.

The Agreement had a closing date of April 1, 2008.

April 1, 2008 came and went without GOAB being able to find the money and in January 2009 GOAB asked and NPL agreed to an extension to the Sale Agreement until August 31, 2009 for the same US$81 million.

August 31, 2009 also came and went without GOAB being able to find the money.

In September 2009 the previous administration again asked for and received from NPL a second extension until October 15th, 2009 for the same US$81 million.
October 15, 2009 came and went and in November 2009 the previous administration again for and received from NPL a third extension until January 31st 2010 for the same US $81 million.

January 31st, 2010 also came and went until February 2010 when the previous administration sought and received a fourth extension until April 30th, 2010 for the same US$81 million.

The Prime Minister, at the time, the Honourable Baldwin Spencer told the nation in Parliament in May 2010 that his administration would borrow US$68 million from the Venezuelan firm PDVSA to purchase the WIOC shares.

He said the loan has a twenty year payback period and is associated with a two year moratorium with the interest rate fixed at 6%.

Once more the plan collapsed.

The purchase was not concluded and in April 2013, and the previous administration again asked for and got a fifth extension for purchase at the same US$81 million.

This time the closing date was set for June 7th, 2013, a deadline that was missed again by the previous administration.

And do not believe claims that the previous Baldwin Spencer Administration negotiated a different deal. On January 15th, 2015 the Prime Minister received the unequivocal statement from NPL that there was only one deal on the table before the ABLP took office. I state, verbatim what the director of NPL wrote to the Prime Minister:

Dear Prime Minister,

At your request I would like to confirm to you that NPL have not executed any agreement with previous government of Antigua and Barbuda regarding the sale of its 75% holding in WIOC other than the original SPA of 2008, the January 2009 Deed of Extension, the Second extension deed- September 2009, the Third extension deed- 30th November 2009, the Forth extension deed- 25th February 2010 and the Fifth extension deed – April 2013 (signed only by NPL). In all these deeds of extension the price and commercial terms remained unchanged as in the original SPA.

Best regards, Moriel Matalon On behalf of NPL

Then, on June 12, 2014, the Antigua and Barbuda Labour Party was elected to office by the good people of this country, wiping from our memories the dark decade of Leadership failure.

Within 120 days, under the leadership of the Honourable Gaston Browne and on the basis of his bold, innovative and unambiguous vision, face to

 

face negotiations were held with NPL until an agreement was reached in December 2014 and a Term Sheet signed in January 2015.

The price of purchase was negotiated downwards to US$30 million, a massive reduction of US$51 million on the agreement and five extensions to which the previous administration had committed this nation.

The rest is history.

On April 1st, 2015, seven years to the day after the UPP had committed to pay US$81 million; the Hon. Gaston Browne executed the share transfer documents and paid NPL US$30 million.

The Government and People of Antigua and Barbuda became the sole owners of WIOC. Baring the acquisition and purchase of the syndicate estate lands by the Father of this Nation and National Hero the late V. C. Bird Snr. there is no single accomplishment by any Political Leader or Government of this Country that has been of more historical and economic importance to the people.

There are moments in the history of a nation when the quality of its leadership determines its fortune or fate.

Antigua and Barbuda is at one such moment.

The ABLP administration appreciated that to make WIOC into a regional petroleum trading company would take considerable investment.

A Hong Kong group with strong ties to the financial sector agreed to take a minority equity position and took up 24% of the shares, paying the Government US$14.4 million.

Because of the close friendship between Venezuela and Antigua and Barbuda, PDV Caribe purchased 25% of the shares for US$15 million.

 

With these transactions the Government and people of Antigua and Barbuda retain 51% of the shares in WIOC.
Additionally, the Government retained – separate and apart from the WIOC purchase – 141 acres of land from NPL at a value of US$30 million.

In other words, the people of Antigua and Barbuda got 51% of the shares in WIOC plus US$30 million of land value without any cost to the people of this country and a great increase in the wealth stock of the nation.

That is the unbridled, unvarnished truth of the matter.

Continuous failure over 7 years was turned into a spectacular success, through the vision, creativity and financial acumen of Gaston Browne, the Prime Minister of Antigua and Barbuda.

He deserves our unreserved and fulsome applause and acclamation.

WIOC is now focused on its core petroleum businesses, terminal services, storage of fuel products, wholesaling to the Antigua and Dominica markets and supporting the retail petroleum market in Antigua, Barbuda and Dominica.

With this expansion, that starts today, the company enters a new phase by widening a number of markets and by providing petroleum and oil product services in line with the 21st Century expectations.

When the Government took over control of WIOC on April 1st, 2015, several tanks were out of operation.

Also, the Conventional Buoy Mooring intended for offloading oil products from larger tankers has been out of use for decades.

Of the 52.5 million imperial gallons of petroleum storage tanks at WIOC less than 60% of the capacity was actually available for use.

 

WIOC embarked on a repair program for tanks needing minor repairs and the new WIOC Board immediately instructed the WIOC management to initiate a transparent, international bidding process to return three tanks totaling 18.2 million gallons back into service.

The tanks covered under this bid were two of the largest tanks at WIOC, each of 7.35 million gallons.

Over the next 12 months the two large tanks will be refurbished and one brand new 3.5 million gallon tank will be constructed.

In keeping with the Government’s commitment to transparency and good governance, the bidding process was in keeping with international standards.

From prequalified companies, the bid was awarded to Cape-Inc of the USA based on a detailed bid evaluation carried out by WIOC management and approved by the full Board of shareholders.
Cape Inc has extensive experience and a large portfolio of successful tank construction projects throughout the States and the Caribbean.

We are pleased to welcome them to WIOC.

Cape has also committed to opening a welding school in Antigua to train Antiguan welders up to certified standards for the petroleum industry.

Through this we can expect future tank construction projects will not need certified welders to come from overseas, another first for Antigua.

The financing for the project is being provided to WIOC by the Government as a 10-Year Bond earning the Government 9% interest per annum.

The next year will see similar transparent bids for the refurbishment and upgrading of the Conventional Buoy Mooring and for a Fire and Gas Safety System at the WIOC LPG Plant.

Also under consideration is a complete upgrade to the 20lb LPG cylinders used by the public, transitioning from the old design steel cylinders to new, lighter cylinder that have already been introduced in Dominica and St. Vincent.

Further ahead, WIOC is planning more new tank projects to increase the storage capacity to meet expected higher demand.

My Ministry, as the Ministry responsible for Energy is excited about the plans to grow WIOC in conjunction with PDVSA into a regional supplier of petroleum products.

WIOC will become one of the cornerstones of the Prime Minister’s exciting vision of Antigua and Barbuda as an Economic Powerhouse.

We are on our way to rebuilding our economy for the benefit of all our people.

Ladies and Gentlemen, the world is what the world is, the size of our country is what the size is, our small size is not a limitation. They are both simply realities for us to deal with, to face each and every challenge and winning each and every battle. The size of the world has not changed since June 12, 2014. The size of our country has not been altered since June 12, 2014. The size of our ambition has been greatly enlarged since June 12, 2014. We say “small is beautiful,” graceful and ambitious.

Small is nimble, small is manageable. Antigua and Barbuda is small and beautiful. This 18 month old Government is ready for the rebuilding challenge. We are ready to keep Antigua and Barbuda beautiful by rebuilding this magnificent place that we all love.

Thank you and God bless our beloved Antigua and Barbuda.