-An optimistic NOCAL assures Liberians ahead of April’s bid round launch
Liberia’s search for oil in commercial quantity continues as the government, through the Liberia Petroleum Regulatory Authority (LPRA), is poised to conduct its next bid round in April this year—all in an effort to lure global petroleum giants back into the country’s oil sector.
Ahead of this much-anticipated launch, the National Oil Company of Liberia (NOCAL) is optimistic that oil will be found in commercial quantity which proceeds will help alleviate some of the burning economic challenges that the country is being faced with.
NOCAL vice president for Technical Services, Dr. Lester Tenny, has said this anticipated discovery cannot be successful in the absence of adequate investments into the processes or activities leading to said discovery, especially the launch of the upcoming bid round.
LPRA has since disclosed that Liberia will launch its next bid round for oil exploration in April of this year—an event that gears towards offering nine (9) blocks to petroleum companies for exploration.
The bid round allows a single oil company or a group of oil companies to apply for a Production Sharing Agreement in a competitive and transparent environment, giving them the right to search for commercial deposits of oil.
Speaking at the opening ceremonies of Day-2 at a three-day stakeholders roundtable organized by the LPRA, with support from NOCAL, Dr. Tenny noted that the LPRA and NOCAL will not only deliver a successful bid round comes April, he is very optimistic that oil will be found as the geology in the basin that is going for the bid round is very promising.
“We will find Oil. Ivory Coast discovered oil just right around the same area we are going to launch the bid round,” he said.
But to find the oil, the NOCAL VP noted, the government must be willing to facilitate the processes leading to the discovery. “This means that we must invest and empower the LPRA. And I keep emphasizing this; we have to empower the regulator.
It will be impossible to get the desired outcomes in the absence of adequate financial support if even the country can hire the services of all the geoscientists and the legal experts, he said.
Dr. Tenny noted that Liberia does have oil as the fingerprints and the geology are there to prove it. “The geology shows that we have oil. This means that there is a prospect of oil but all we have not done is to discover oil,” he said, adding, “This is why efforts are geared towards ensuring that the process leading to discovery is sanitized and prudently guided science.”
The question about whether Liberia has oil in commercial quantity, according to the NOCAL VP, depends on the technology that is employed during the exploration and extraction or drilling processes.
“What people call commercial discovery is basically the cost of extraction, not exceeding the expected profit. So you can have oil but, if to get the oil out costs more than the market value, people tell you that it is not commercially viable. But that does not also mean that that field cannot become viable in the future as a result of improved technology at a lesser cost.”
He urged the stakeholders to be optimistic that they are on the right trajectory while assuring the LPRA leadership that NOCAL will continue to provide financial assistance, where possible.
“We also call on other stakeholders like the Ministry of Finance to support the process.
“To realize the outcome of a bid round, the regulator must be financially liquid. He warned that the term the sector is currently on is dangerous because, in the absence of finance, all of the activities that will give birth to a successful bid round will be delayed.”
“I have told Finance Minister Samuel Tweah that the regulator needs to be sufficiently empowered. As a matter of fact, they are generating money. Oil money is not thousands of dollars, they are millions of dollars. And it is a logical investment because there will be a rate of return. So we should support the regulator in whatever ways we should because that is the only way they will be successful. So if we don’t support them, sadly, we will be undermining the very process.”
He expressed frustration over the lack of adequate support to the LPRA. “I was so frustrated when I heard that even the process of holding the stakeholders’ roundtable was facing some financial glitches. I had to communicate immediately with my boss that we have to intervene.
“We need to be aware as stakeholders that the oil sector will bring in millions of dollars, but won’t come running into you; it is you who have to run after it. And this, in a nutshell, means we have to invest adequately,” he stated
Past Controversies tend to Undermine Progress in the sector.
Dr. Tenny also noted that the oil sector of the country has been marred by devastating assumptions that tend to undermine the progress of the Liberian basin.
“The oil sector image has been destroyed by a series of controversies in the past,”
Apart from the knowledge that the current team from LPRA and NOCAL have, most of the current stakeholders in the sector are first-timers in launching a bid round.
But according to Dr. Tenny, this team is set to make history for Liberia. “So Liberia is on the track to set a record that newcomers in the sector, only having knowledge can be successful in delivering a deliverable so sensitive to any country,” adding, “And this is what the team at both LPRA and NOCAL has enjoined to do.”
He reminded the stakeholders that the oil and gas sector is very sensitive—therefore, the management of information is as important as the expected outcome.
“It is important that we take cognizant of the fact that information within the sector should be managed properly so as not to send the wrong signal and raise unexpected expectations within our people,” he said.
At the opening of the roundtable on Monday, LPRA Director-General, Archie N. Donmoe, said the government is passionate about ensuring that Liberia benefits from its potential oil and gas resources—which he said can only possible if government grants licenses to international oil and gas companies for exploration.
He called on the stakeholders to ensure that the interest of Liberia is highlighted in their deliberations.
Created by the Exploration & Production Law of 2014 (ratified in 2016), LPRA has all regulatory oversight of the Oil and Gas sector of the country.
Meanwhile, Liberia’s last bid round was concluded December of 2014 with over $60 million dollars in commitments but concluded unsuccessfully due to political wrangling between the Executive and Legislative branches of government.
Since the departure of Exxon and Chevron from Liberia in 2016/2017, there has been no exploration work offshore Liberia and the sector has been limbo.
This pending exercise is however expected to give Liberia another opportunity, if not the last, to put its best foot forward.