Prez. Sirleaf Endorses NOCAL Board’s Approved SAP

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To ensure organizational efficiency and effectiveness, President Ellen Johnson Sirleaf has endorsed the National Oil Company of Liberia (NOCAL) Board’s approved Sustainability Action Plan (SAP) aimed at ensuring the viability of the entity so that it continues to pursue its mission to develop Liberia’s hydrocarbon resources.
She said the board’s action plan calls for drastic steps to control costs and put NOCAL on a more viable financial footing, adding that these would include significant staff cuts, a reconstitution of the board and retirement and replacement of the senior executive leadership.
Madam Sirleaf made this announcement during a press conference held at the Ministry of Foreign Affairs, held in Monrovia Tuesday.
“I have mandated these steps because they are necessary to ensure that NOCAL can perform its duty to manage and develop Liberia’s oil resources, and to rectify recent mistakes in its performance,” she said.
She recalled that the caliber of companies that were attracted to Liberia’s acreage to pursue exploration activities was also high, with major exploration deals struck between NOCAL and the world’s top oil companies, Chevron and Exxon Mobil, as well as the largest signature bonus of US$50 million ever for a “Frontier” country such as Liberia.
President Sirleaf underscored that the execution of the production sharing contracts (PSCs) with these super major and other reputable international oil companies also resulted in significant interest in Liberia’s hydrocarbon sector with record licensing of seismic data and related revenue. She also noted that during this period, average revenue generated was US$30.5 million, compared to average annual revenue of US$4.5 million in prior years.
This, according to her, translated into US$10.6 million annual payments to the Government’s Consolidated Fund.
The average annual revenue for the sale of seismic data/component for the period 2010–2013, was US$15.6 million; a 300 % increase when compared to annual seismic revenue generated for earlier periods, she indicated.
Madam Sirleaf also said that it was regrettable, commencing in the fourth quarter of 2013, NOCAL’s revenue for seismic data sale began a precipitous decline, during which total seismic revenue fell by 29 percent from the prior fiscal year and was compounded by the Ebola virus disease of 2014 that led to a reduction in investor interest across all economic sectors for the impacted West African region.
“There is no doubt that the current oil price collapse and other external factors, including our recent Ebola challenge contributed to the current financial crisis that the company is facing,” She noted.
She further intimated that despite the obvious decline in revenue that began in late 2013, NOCAL continued hiring staff at an alarming rate with exorbitant benefits resulting in the current wage bill of over US$7 million per annum.”
She however emphasized that the alarming situation at NOCAL prompted her action to instruct NOCAL’s Board of Directors to take immediate action to ensure that the institution is restructured as well as to ensure most prudent handling of the country’s financial resources taking into account the Board’s Sustainability Action Plan.
Meanwhile, President Sirleaf said the administrative actions became prudently compelling and a few members of the board will continue until an interim board is reconstituted.

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