Gibson W. Jerue
10 May 2004
Monrovia — The general notion among Liberians is that there are oil deposits in parts of the country. What exacerbated this nation of late has been political pronouncements coming from official circle that this country has "enough" deposits.
Former President Charles Taylor, now exiled in Nigeria, crowned it all when he used the oil propaganda to buy the sympathy of the Liberian public against the American Government: "because we did not give them contract to drill oil here, so they are against us." But now, whether there is oil or no oil in the country, officials of the National Oil Company of Liberia say they are hopeful that there are credible signs that Liberia has oil.
The President of the National Oil Company, Cllr. Musah Dean, Jr. at a press conference Friday to dispelled the notion that there is oil already discovered and that it could be drilled any time as well as to announce that there are credible signs that oil could be in Liberia.
On the first note, Cllr. Dean agrees, "Oil is of special significance to both developed and developing countries. The mention of oil generates a lot of discussions in many quarters; expectations are often beyond bounds, principally because of the huge revenue generated from the production of oil and the capital intensity of the exploration and exploitation." He said political leaders make pre-mature pronouncements of the presence of oil in high quantities. He cautioned that though "every Liberian has a right to expect a change in his economic condition if we should find oil, but that cannot be done outside of planning for what you do not have." On the second note, the NOCAL President said there are good conditions and/or indications that show the presence of oil in Liberia.
He named those conditions as the presence of the "very good" source rocks, good trap, good closure or strong evidence of data.
Cllr. Dean indicated that those conditions that exist in other countries that are producing oil. "But we must indicate quickly that we have reached the point to conclude that there is oil in Liberia," he added.
The National Oil Company of Liberia (NOCAL) was established, pursuant to an Act of the Legislature. It holds all of the rights, titles and interests of the Republic of Liberia in the deposits and reserves of liquid and gaseous hydrocarbons within the territorial limits of the country. The Company, he disclosed, is yet to have an office and has not been funded, as it operates from a private law firm.
Despite that, Mr. Dean said his administration, in collaboration with experts on oil, are working around the clock to verify whether or not there is oil in Liberia.
According to him, NOCAL in August 2000 contracted the services of TGS-NOPEC, a geophysical company based in Houston, Texas, USA to conduct a "2-D seismic survey" which covered a large portion of offshore southern Liberia shelf and slope.
He said, "TGS-NOPEC acquired approximately 9,500 kilometers of seismic data from the entire offshore area, including the deep water area of Liberia." That survey cost the company about US$6.4m and the data acquired therefrom can not be released until Liberia underwrites the cost. But he said the company, following intensive and exhaustive negotiations, has agreed to be reimbursed using the proceeds from the sale of the data.
What is not known though is whether these data contain some useful information about the existence of oil in Liberia.
And the NOCAL President said they are moving to a second level - to conduct the 3-D seismic survey in deep water which would cost anything between US$10-15 million to execute just one block.
He declared, "The flavor now is to explore in the deep waters, about 700 to 3000 meters, to conduct the 3-D seismic exploration that suits." According to him, if drilling would follow, it would cost anything between US$35m and US$60m, and could take between six to eight years before a barrel of oil is produced.
One of two arrangements is possible to do the 3-D seismic survey: production sharing contract and Tax and Royalty. The first approach is employed in most frontier areas as Liberia, while under the Royalty arrangements; the company invests and pays the host country rental and taxes for exploration of the resources.
Cllr. Dean said NOCAL has no money to go for the Royalty and has opted for the Production Sharing approach.
He disclosed that they are now locked in negotiation and have concluded with two companies: REPSOL a company based and Spain in Oranto, a Nigerian registered company for the granting of exploration rights to conduct 3-D exploration in Liberia's offshore blocks. REPSOL will conduct exploration in block 17 and Oranto in block 12.
If it is confirmed that there is a deposit of oil in Liberia, the country will be able to produce gasoline, gas oil, jet fuel, kerosene, cooking gas and asphalt ("coal tar").
Analysts believe that NOCAL is proceeding in the right direction to inform the Liberian people as to what is obtaining on the oil issue.
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