18 January 2013

Liberia: Oil Contracts Flawed

A discrepancy has been detected in the oil sector of the country with House Speaker Alex Tyler admitting that Production Sharing Contracts were written without petroleum laws.

The speaker also admitted that key provisions such as equity of the Liberian government, participation of Liberians and royalty were not captured in the oil document carried by the oil companies.

If not properly handled, he warned, the situation is likely to bring chaos in the oil sector of the country.

A row recently erupted in the oil sector with Montserrado County District #6 Rep Edwin Snowe calling on the Chairman of the National Oil Company (NOCAL) Robert Sirleaf to resign and accusing President Sirleaf of marginalizing others in the oil sector.

Representative Snowe also accused the Chairman of the National Oil Company Mr. Roberts Sirleaf of holding four jobs at the same time.

When the 53rd Natioal Legislators resumed session, they promised among other things to deliberate on the reform process of NOCAL as a part of their priorities

However, appearing at the regular press briefing of the Ministry of Information yesterday, Speaker Tyler said "When we received the production sharing contracts, we at the time did not know that we had a new petroleum law and I think the Executive shared that same concerns."

He said "We went ahead and rectified them and later on discovered through research when we resumed our duties for 53rd that in fact there was new petroleum of 2012."

The speaker added: "We read the law and went back to the conference, we noticed that the law was not captured in the document especially three key provisions."

With this, the Speaker said they want NOCAL to stand as an oil company because "we want to have a regulatory agency that will deal with oil and gas sector of the country. And then where possible we make a revenue management law. What we are currently doing is to ensure that we separate the function of the oil company."

On the issue of responsibility, he said "I also believe that as investors, yes we take some responsibility but they have got equal responsibility."

The speaker added that the PSC, the National Legislators informed the Executive that it was important to engage those government investment partners

that are currently holding production sharing rights to revisit the contracts "because there is a concept of law where you can look at the provision of a contract without voiding the entire contract."

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