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'Committed' investment in Black's $25 billion refinery idea evaporates

Newspaper magnate David Black's proposed $25-billion refinery to process Alberta bitumen on British Columbia's coast has a new financial advisor, and capital for the project is not locked in after all, according to the Globe and Mail.

Last Thursday Black announced that Oppenheimer Investments Group has been replaced as financial advisor to the project by the Industrial and Commercial Bank of China. 

"Mr. Black's plans received a setback when Oppenheimer co-founder Samuel Grossmann suddenly died a week after the March announcement," reported the Globe, quoting Black: "We lost time and we lost a good man who was very smart, had a lot of moxie, a lot of drive and would have helped out on all of the negotiations a lot."

It is not clear why so major a publicly announced commitment by Oppenheimer Investments Group would be halted by the death of Grossmann, who was not cited as being part of the refinery project work. Oppenheimer Investments Group purports to be of the size and scope to have built 29 international airports and a new city in Oman.

In March, Richard Cooke, Oppenheimer's senior managing director for the Americas and Africa, declared, "We have arranged and we have the funding committed to do this whole [Kitimat refinery] project."

Now, instead, reports the Globe: "ICBC will act as an investment banker to organize a syndicate of lenders, and may lend its own money to a project that has been met with deep skepticism in the Canadian energy industry."

That arrangement with the Chinese bank, concludes the Globe, "falls well short" of the original claim that the funding was "arranged" and "committed".

An article by Peter Ewart published March 19 in The Tyee raised questions about Oppenheimer Investment Group's transparency, pointing out that the Group's website "has no names, street addresses or phone numbers for company officers or branches, nor any history of the firm."

Ewart wrote that in an interview Black told him he had conducted his own research into Oppenheimer Investments Group "and was satisfied with their credentials, although he did not provide the names of any specific airport projects the group claims to have worked on."

Thursday's Globe article notes the "secretive nature [of Oppenheimer Investments Group] has raised questions in British Columbia." 

David Beers is editor of The Tyee.

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