The Analyst (Monrovia)

3 January 2013

Liberia: Preparing a Generation to Efficiently Manage Liberia's Oil and Gas Sector

Photo: Tullow Oil
Offshore drilling.

opinion

Liberia quest to explore for hydrocarbon (petroleum) offshore its territorial waters backdates to the late sixties. In fact, some believe that the government decision for exploration activities was made in 1940s. Howbeit, creating a long-term approach for capacity development has been on the fringe of decision paradigm. As usual, the government and decision makers wanted to proof the existence of hydrocarbon before mapping out a capacity building program. This askew approach has been grossly responsible for the human development lapses the country has experienced over the years. Sadly, some state actors are still keen on following this parochial method of national growth. Words like “why spend money to train individuals who the country might not need if we don’t find this resource” are generally heard concerning capacity building for a new field/sector about to be explored.

Globally, countries establish, as top priority, training and development of its citizens for new sectors. Some states even roll out a robust training program for the citizens far before they (states) make decision about exploring such sector. This allows these countries to house the necessary capacities and capabilities in-country. Paying for expatriate (which will definitely be needed from the beginning) can cause a massive blow to the revenue generation ability of the country and its citizens. Therefore, as a more salient approach, preparing its own citizens remains top on the country agenda.

There are three reasons for building in-country capacity within the oil and gas sector and to a large extent, other sectors. The first is that it allows the country to gain economic boons and build a middle class faster than when expatriate are used. The “triggered-down” effect of having higher number of locals trained and working in the sector can add significant value to the local economy. Secondly, having locals skilled in oil and gas project brings more social value to the operations and helps build extensive trust with the local community. The fact that local community dwellers acknowledge that workers on oil and gas installations are “sons and daughters of the soil” reduces mistrust and the widely held notion that the foreigners are coming to rip them off of their inheritance. Thirdly, building local capacity for the oil and gas industry strengthens national competence and improves sustainability thereby allowing for possibility of continuous future explorations and production activities.

A glimpse at capacity development strategy

After many attempts to find oil proofed futile, Norway hit the elusive black gold following a brave and brilliant interpretation of an Iraqi born geologist Farouk al-Kasim. Farouk was later appointed by the Norwegian government to develop a blueprint for managing the oil and gas sector. Farouk’s blue print allowed the Norwegians to rely more on national competence and less on borrowed capabilities. Norway trained its citizens and is being considered today as one of the gold star in the industry. Norway’s state oil company, StatoilHydro, is internationally recognized as a competitive commercial player with saving funds from petroleum operation over US$384 billion.

Brazil, on the other hand, is thought to have the 15 largest proven reserves of oil globally. The country has established over 401 federal financed vocational, technical and higher learning institutions.  Annual budget for vocational institutes alone, over the last eight years, jumped from 385 million in 2011 to a staggering 3.8 billion in 2012 to match the increasing demand by the oil boom. In December 2003, the government of brazil showed its commitment to local content development by creating the Program for the Mobilization of national Oil and Natural Gas industry (PROMINP) which objective is to “maximize the national good and service industry’s participation, on a competitive and sustainable basis: in deploying oil and gas projects in brazil and abroad.”

Talking to a colleague at GNPC in 2011, it struck me that the government of Ghana has designed a strategy to train over 3,500 Ghanaians with specialization directly relating to petroleum operations. My next question to this guy was whether the industry will be able to absorb and afford these Ghanaians in the interim? He honestly responded that “if Ghana petroleum industry does not absorb immediately, working aboard still benefits the local economy through remittance.” His statement shows a true and lasting commitment for sustaining the industry and establishing a firm grip over the oil resources.

NOCAL promise for a better tomorrow

Liberia has only pronounced a “significant discovery” and hopes have run high anticipating the millions, if not billions, of dollars which the country could generate. However, it is well possible that Liberia new find may not be commercial enough to encourage development and subsequent production of the field. In such case, the country benefits nothing.  Notwithstanding, as in the case of Ghana, building the capacity of young Liberians for the oil and gas industry provides a win-win outcome. In a worst case scenario (with no or less commercial oil find), the trained Liberians can still find attractive job in other neighboring or western countries and contribute to the local economy.

NOCAL has gradually begun to capture this concept and has established a scholarship committee which spearheads the company local and international scholarship scheme. Under this scheme, the company has been able to sponsor over 50 students in various universities around the country. The scholarship includes full tuition coverage and a monthly stipend. More than that, the company has decided to provide atleast 15 scholarships to deserving Liberians with strong ambition for oil and gas careers. To date, the company has already sponsored more than 30 master-level students in various institutions abroad.

Chevron’s Contribution

Consequentially, NOCAL has understood that academic training is important but must be matched with hands-on training. This on-the-job training affords NOCAL employees the opportunity to gain practical experience about the requirements for oil and gas operations.

As one of the world major oil and gas exploration and production companies, Chevron took keen interest in Liberia offshore blocks and repurchase blocks LB-11, LB-12 and LB-14 from Oranto and since started developing its prospects for effective drilling campaign. The company has already drilled two offshore wells and is currently calibrating the data to ascertain the presence of hydrocarbons.

Despite the current uncertainty of hydrocarbon presence in its 3 offshore blocks, Chevron committed to NOCAL that it will roll out a training and capacity development program for employees of the company. This gesture is a clear manifestation of the kind of contribution and human development program Chevron wishes to add to Liberia.

As a beginning point, Three NOCAL employees, were chosen to spend a year-long job training (SECONDMENT) at Chevron headquarters in the United States to gain practical knowledge on the methods, theories, and techniques applied in planning, drilling, developing and producing an oil field. This secondment agreement with Chevron shows the government of Liberia commitment to building a strong workforce within our emerging oil and gas industry which, if administer and managed properly, can elevate the country from its quagmire of destitution and economic downturn to one that is filled with hope and sustainable growth.

As a small country rebuilding after years of civil strife and devastation, this offer by Chevron might seem little but NOCAL, aware of the significance of developing a generation that will adequately fill the capacity vacuum created by the war, ensured that Chevron delivers on their commitment.  The current batch, comprising of a petroleum engineer, a petroleum geologist and an environmental economist, is considered the “pioneers” of the secondment initiative and there are plans to make this program sustainable as long as Chevron remains a partner in Liberia.

Chevron acted, NOCAL has responded, the President of Liberia is committed and the secondees are being trained.

About the Author

Urias Goll is an environmental economist working for NOCAL. He is one of the secondees assigned to Chevron. He can be contacted at uriasgoll@gmail.com

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