LETS LECTURE: NOCAL’s Bankruptcy

0
1331
Harry Greaves.jpg

The chickens, it would seem, are coming home to roost and with what vengeance! Last week there were legislative hearings on NOCAL, and we learn that the custodians of our national hydrocarbon treasure have revealed that the company is running out of money, going bankrupt. How, you may well ask, is that possible, when we have it on good authority that before her untimely death a year ago, Marie Esther Dupigny-Leigh Parker, senior vice president of finance and of revered memory, had stashed away $50 million in NOCAL’s bank account? What happened to that money and who took off with the loot?

I suppose we will never know. But there are some likely culprits in the wings. First, let us look at how NOCAL spends its (or should I say our?) money. Last year December, I wrote NOCAL one of my intrusive letters requesting a raft of information about NOCAL expenditures. Overall, NOCAL is now spending $25 million of your and my money every year, mostly on itself. How does a company which is not producing any product (because we have not yet discovered oil) spend that kind of money? At this stage of its evolution, NOCAL is essentially just an administrative unit. It’s job is to supervise bids for oil blocks (something that was suspended three years ago and just restarted last year) and review exploration reports submitted by the few oil companies that have been concessioned oil blocks.

For this task, all NOCAL needs are probably two dozen financial analysts and geologists/geophysicists. But instead it has a veritable cornucopia of well remunerated souls. There is a CEO (chief Executive Officer) whose salary reputedly rivals the salary of the President of the United States, chief executive of the most powerful nation on earth, which has a GDP that runs into trillions of dollars. Ours is a mere 2 billion dollars.

Then there is a COO (Chief Operating Officer). Excuse me! Operating what? NOCAL is not producing one liter of oil. Further, underneath her there is a legion of vice presidents. NOCAL, it seems, is trying to mimick the organization chart of the Chevrons and ExxonMobils of this world. The difference is that these companies are producing oil, oodles of it all over the world, and their annual revenues dwarf the budgets of many African nations.

But it hasn’t always been like this. NOCAL in 2006 was a small-knit unit. They had no money. I remember because as managing director of LPRC I lent them $30,000 at one point to pay their payroll and I financed a trip by their CEO to an oil conference in Texas that we jointly attended. They occupied just one floor of the Episcopal Church Building on Ashmun Street at the time. Today, they are on three floors and counting. They reputedly have in excess of 200 people on their payroll. Doing what? God in heaven knows.

Let’s delve a little deeper. One of the questions I asked NOCAL management that they never responded to was how much money the company’s board of directors was spending. I asked this question because there were rumours that its illustrious former chairman, the Honorable Rob Sirleaf, scion of our fearless leader, Ellen Johnson Sirleaf, was spending NOCAL’s money like it was going out of style. The board reputedly was operating a budget of US$1.5 million a year.

How does the board of a state-owned enterprise spend that kind of money? Were they feasting on pheasant and quaffing copious quantities of Chateau Laffite? Or was there something more sinister afoot?

The budget of my board at LPRC, which I considered to be handsomely rewarded, was just south of US$100,000 per annum. How could NOCAL’s board be spending 15 times as much money as mine was, when, as I intimated earlier, they were producing absolutely nothing? At least we were generating revenue from leasing storage tanks, and by the time of my departure we were pulling in a profit of $8 million per annum pre-tax.

I learned later that some of that board budget was being spent by Mr. Sirleaf to finance many of the civic projects that he claimed were financed by him out of pocket in the run-up to his ill-fated senatorial bid. So much for all that high falutin talk about working pro bono. Seems to me like Mr. Sirleaf was working for plenty bono.

The writer is a Certified Public Accountant and businessman. He can be reached at .

Authors

LEAVE A REPLY

Please enter your comment!
Please enter your name here