Inside Blue Bay – Special Report

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June 22, viagra sale 2012
By OTV Staff Reporters
Update June 26: The Presidents letter in response to the article is now posted at the bottom of this page.
In 2009, approved the oil and gas company Blue Bay Petroleum took over operations from Mobil Oil Micronesia, Inc. to provide fuel to Palau. Mobil had nine service stations, marinas and about 15 employees.

New information has surfaced about the circumstances surrounding Blue Bay Petroleum’s entry into Palau’s marketplace, including the transfer of the company, FIB status and award of an exclusive 5-year contract worth nearly 100 million dollars.
In 2009, when Blue Bay Petroleum took over Mobil’s operation there was an asset transfer estimated at over $4,000,000 that included the terminal, aviation contracts, tank farms, land, vehicles and buildings. However, Blue Bay’s incorporation documents show that its stock was valued at only $1,000.00.  Each of the one thousand shares issued was given a value of $1.00.
Blue Bay’s Stock Affidavit reveals that while it is 85% owned by Tan Holdings of Saipan, 15% of the shares were distributed to the President’s family. 2.5% of the Blue Bay stock went to the President’s sister, Rodeian Toriobiong, 2.5% to his cousin Uchel Tmetuchl, and 10% to the President’s lawyer Kevin Kirk’s wife and child.  The President’s sister and cousin only paid $25 each for their shares worth about $100,000.00 and Kevin Kirk’s wife and child paid only $100 for stock estimated at $400,000.00. Kevin Kirk was the attorney for both President Toribiong and Blue Bay.

Blue Bay Petroleum’s four board members and officers are also the President’s family members.  While on the incorporation documents filed with Palau Attorney General Office the President of Blue Bay is Salome Kirk, cousin to the President’s wife, on other documents given to OTV, George Chu holds himself out as the President of Blue Bay.
A standard condition of all foreign Investment permits is that they are non-transferable.  Mobil Oil’s permit was also non-transferable.   In fact, Blue Bay never applied for an FIB Certificate to operate in Palau because for the first time ever an FIB company – Mobil Oil — was permitted to transfer its FIB permit by a Certificate of Amendment signed by President Toribiong.  The Certificate of Amendment released Mobil from the non-transfer condition.  This is the only known Certificate of Amendment to ever be issued by a President.
The Certificate of Amendment was ratified by the FIB board on the same day as it was issued by the President.  This ratification did not happen at an official, noticed FIB board meeting, but instead, the board members were requested to meet with the President at his office in the Capital.  While at his office, the President asked for their assent.  All four board members present at the meeting agreed to sign the Certificate of Amendment.
Under Section 110 of the Foreign Investment Act, any amendment to an FIB Certificate requires an application to the FIB Board. The President’s Certificate of Amendment avoided the amendment application process and bypassed the opportunity for notice and comment by the Senate, the House of Delegates and other organizations including the Chamber of Commerce.
According to the President, Mobil Oil did not need to follow the amendment process contained in the Foreign Investment Act.  The President explained that Mobil’s foreign investment permit was issued in 1974 during the Trust Territory Administration and that the current foreign investment laws which were enacted in 1990, do not govern Mobil’s permit.  The President further stated that under the Trust Territory code, amendments to foreign investment permits were to be submitted to the Director of Resources and Development.  The President asserts that he had the authority to grant Mobil’s amendment request as the successor to the authority of the TTPI High Commissioner.  In a letter dated June 9, 2009, the President wrote to Mobil Oil granting their request to amend their permit citing his “inherent” authority under Palau’s Constitution and the laws of Palau.

The President “does not recall . . . if he knew to whom Mobil intended to transfer its operating rights” and claims he certainly “was not aware” that his sister and nephew were shareholders of Blue Bay.
Mobil Oil’s permit was never re-issued to Blue Bay.  Blue Bay does not hold an FIB permit in its own name and currently is operating through Mobil’s perpetual license.  By avoiding the Foreign investment permit process, the real worth and ownership of Blue Bay Petroleum, as well as other vital information, remains unknown to Palau’s government and citizens.
Blue Bay was recently awarded a unique 5-year exclusive contract by PPUC to provide fuel to the Malakal power plant.  While bidding for fuel to PPUC is usually done on a 1 or 2 year term, PPUC told OTV it may enter into any term it feels may be favorable to PPUC.
The Blue Bay contract was signed by the President and is worth approximately 100 million dollars over the 5-year term.  The President said the PPUC contract was awarded pursuant to a fair bidding process that was initiated by a Request For Proposal.  The President signed off on the contract “under the State of Emergency because there was no PPUC Board at that time,” but that acting General Manager Ken Uyehara had complete authority over the negotiations and terms.
In a written response to OTV, the President said “he has never spoken” to his sister or nephew about their shareholdings in Blue Bay and that both his sister and nephew “are both adults in their 40’s with their own families and households and I do not know their business dealings.  An investor chooses who it wants to do business with in Palau.  All of that is their private business.  I did not influence Mobil, or Blue Bay, or anyone else in regard to any of their business activities in Palau.”
Further, the President believes that foreign investors, just like anyone else, should be freely allowed to sell the businesses that they labor to build.  He stressed that none of his actions were done in secret and are all a matter of public record.  He also stated that PPUC’s contracts and actions are similarly a matter of public record.  PPUC, however, has refused to release the Blue Bay Contract to OTV claiming the contract contains proprietary information.
The President expressed concern about the timing of this report and believes that OTV was provided documents anonymously to pursue a story “that is not a story” as a result of the upcoming election.  The President remains unequivocal that he has done nothing wrong.
OTV contacted Kevin Kirk, but as of press time, Mr. Kirk had no comment. OTV called Blue Bay to speak with its President, Salmoe Kirk, but nobody at Blue Bay knew who that was.  OTV eventually caught up with Mrs. Kirk, but she also had no comment.

Sources:
Certificate of Amendment
Stock Affidavit
28 PNC Sec 101
Assignment and Assumption of Business Permit
Mobil Oil Business Permit 165-74
Letter Dated April 28, 2009 from Mobil to President Toribiong
Letter dated June 9, 2009 from President Toribiong to Mobil Oil
Interviews: names withheld
www.tanholdings.com
www.bluebaypetroleum.com
Letter response on article from President Toribiong
Estimated assets values from industry consultants