Liberia will receive a whopping US$50 million from a signature bonus if ongoing negotiated contract between ExxonMobil and Peppercoast Broadway is signed by President Ellen Johnson-Sirleaf and approved by members of the National Legislature.
The President and Chief Executive Officer (CEO) of the National Oil Company of Liberia (NOCAL), Dr. Rudolph McClain, said the renegotiated contract provides other long-term financial benefits, strong social and environmental protections as well as provisions to promote local content and job creation in Liberia.
Speaking at the regular Thursday press briefing at the Ministry of Information, Culture and Tourism, he explained that the contract is a result of a lengthy period of negotiations between NOCAL, the Canadian Overseas Petroleum LTD (COPL) and ExxonMobil regarding Liberia's offshore Block 13 (LB-13).
In May 2011, Peppercoast announced the proposed sale to Canadian Overseas Petroleum Limited of it 100% interest in the Production Sharing Contract for LB-13.
However, addressing journalists, Dr. McClain explained that as a frontier country, Liberia will receive an upfront payment through a signature bonus, taxes and fees of US$50,000,000.00. According to him, this contract is amongst the first in the world to include the provisions where citizens could receive dividends from production if the exploration in the LB-13 leads to successful discovery and production of oil.
"Beginning with the various provisions of the contract, the US$50 million to be received immediately upon the ratification and printing into handbills includes US$21.25 million, one of the highest Liberia oil block signature bonus yet. This amount of US$21.25 million is also the highest upfront payouts to a non-producing country in the world. Up until now, it may interest you to know that the largest signature bonus Liberia has received for a single offshore block is US$3.33 million. The rest of the US$50 million is paid for taxes and transfer fees," NOCAL President, CEO said.
He also disclosed that the negotiating team of the government has also secured a 5% Citizens Participation Share in LB-13. Also in the contract, Dr. McClain said NOCAL secured a 10% royalty on oil produced from wells drilled under water depths of 0--1500 meters, and additional 5% royalty was agreed for oil produced from wells drilled under water more than 1502+meters of depth.
He noted that prior to this, there was no royalty under the Production Sharing Contract (PSC) of LB-13.
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I say government should embark upon a massive agricultural campaign by establishing state farms in all counties! There is more value in food than in oil!
This is truly a blessing for the Liberian people. $50m is a meaningful amount of our nations overall budget, so will greatly assist with infrastructure,education, and overall improved quality of life. In addition, should they hit oil, we will finally share in those riches as well. And if they don't hit oil, we still keep the $50m.
If this is not the Liberia story again, then Im impressed thus i have no knowledge on the projected cash flow from this agreement but my understanding is that the NPV is high so both parties are giving in more...however a careful monitoring of the deliverable mentioned by the chairman should be at the core of GOL M&E department.... the timely payment of this bonus should be cleared..... Am hugely concerned if the invested capital is a loan or actual cash provided by the TNC parent? My fear is Capital flight and devaluation of the domestic currency in the long run if these investments are not carefully monitored..
If this is not the Liberia story again, then I impressed thus i have no knowledge on the projected cash from this agreement but my understanding is that the NPV is high so both parties are giving in more...however a careful monitoring of the deliverable mentioned by the chairman should be at the core of GOL M&E department.... the timely payment of this bonus should be cleared..... Am hugely concerned if the invested capital is a loan or actual cash provided by the TNC parent? My fear is Capital and devaluation of the domestic currency in the long run if these investments are not carefully monitored..
I would like to impres upon my brothers and sisters that technology should be an emphasis when signing these deals. We must remember that the paper money is useless they print this money like monopoly play money; again these monies are subject to shortfalls. With technology that can last a life time. there needs to be a strong power grid in Liberia where manufacturing and industry can profit. Yes! Environment is of profound importants we must not destroy our ecology or environemnt for the sake of profit??.. There must be clean energy as we know water is one of our most if not the most important resource we have on the planet!!!!!!!!. Without water we die we all die"... In the long way forward education to run these cmpanies is vital also refinement of the finished product entails millions of jobs!!!!.. With independence entails responsibilities which encoyrages education of the highest standrads!!!.Our African children must be stress free truamqa freee and must have opportunities that will empower all the geniuses in our forbiddden economies. Africans have lacked by design any true enhancement of thier educational systems ; today the government mustensure that up to high scholl education and vocational training is freee no mattyer the cost why???? this will ensure a skilled people that will be able to do for self!!!!!... University is being considered by the AU' which stated there will be a Pan African University which will be one of the most advanced pon the planet!!!!. However as stated high school education is also very important there are many functions that will improve life forms with high school education. Not one child should be exempt for4 lack of money.Child labour should be a crime in the ECOWAS region as well as all Africa; no child should have to work scarificing his or her chnace at developing thier nation and continent. With skilled labour force vocational training in construction, electric, sanitation, tools and machinerty shops, mechanics ,carpentry, welding all these vocational skills are high schools modeled which will enable these students to either form small buisneses or be employed with oil companies, ore refinieries and agriculture. running big tractors, tractor trailers , the advanced mechanisms that is important for growth. The people must be part and parcel of this growth so with teh education they will know that they are important to the proccess, withoput them acquiring knowledge there will not be a successful Liberia".. All children 99.9% of our children need successful High School technical vocational education; it would be a bonus to ensure that oru elders who never got a chance to learn were able to even attain elementary education there by elliminating illietarcy completely!!!!!!!!.. Do not flop with corruption or greed at the first hurdle this is what tey rquire of us, failur; "remember that they are our former enslavers this must not be forgotten"..." Reach out to our lost an stolen diaspora' where there is an abundants of teachers" spare not the cost to ensure a top flight educational system that will no doubt empower the nation".