3 March 2014

Liberia: Fire Sale At NOCAL? Liberia Oil Company Chief Reportedly Auctioning Blocks

In a meeting with ExxonMobil, Dr. Randolph McClain, the Chief Executive Officer of the National Oil Company of Liberia reportedly announced that NOCAL is preparing for an upcoming bid round of 9 - 11 blocks offshore Liberia, a statement which reportedly sent alarm bells ringing, FrontPageAfrica has learned. Industry observers are concerned that Dr. McClain's announcement to Exxon may be a contributing factor to the ongoing delays in the oil sector reform.

FrontPageAfrica began its investigations after sources in that meeting began whispering and speculating on FIRE SALE activities taking place within NOCAL and using a very questionable relationship with TGS NOPEC to legitimize it.

In September 2013, Chloe Fussel of Global Witness stated that NOCAL was attempting to push the law through so that it could conduct a bid round. Many within the process said no, it would be impossible with the provisions of the new law and if that were true, Dr. McClain would not have disappeared the day before the law went into the Senate.

A senior administration official who spoke to FrontPageAfrica on condition of anonymity said, Dr. McClain's disappearance signaled his unwillingness for the law to pass, contrary to the will of the President and if she were not in India at the time, he may have had to answer hard questions regarding his behavior.

Under the oil sector reform, the Senate passed Petroleum Law (2013) states that all tenders for blocks will be housed under the new regulatory arm called the Petroleum Directorate (PD) and that new institution would have prior approval by the President of the Republic and public hearing and newspaper notices before any blocks were put up for bid.


Explosive documents obtained by FPA confirm that the NOCAL CEO has a grander scheme up his sleeves and TGS NOPEC (seismic company) seems to be his unknowing partner in crime. The recent General Auditing Commission (GAC) on NOCAL for fiscal years 2006/07 and 2007/2008 exposes the repeated cheating of GOL monies perpetrated by TGS on a number of occasions:

Misappropriating the distribution amount owed to GOL between 2002- 2008 totaling $305,680.03, with applied interest the amount is $348,475.23. $1,034,858.41 meant for NOCAL in 2002 was not remitted until 2008 after NOCAL discovered the shortfall. The interest owed is $144,880.17.

The report goes on to state that because of the recent audit, and the Auditor General, TGS was forced to remit$1,266,102.59 of the $1,655,965.36 owed since 2002 and stated that TGS on a number of occasions "disregarded the provisions in the MOU" and the "non-compliance of TGS would impact the development of the Oil and Gas Industry in the Republic of Liberia".

From all indications, the source noted TGS may not be a reputable partner for Liberia but it took a GAC report to uncover the ills and not the National Oil Company of Liberia of is responsible for the sector.

The Bigger questions remain unanswered: Why would Dr. McClain be in partnership with TGS and present Liberia's offshore blocks for sale in South Africa at a conference, with an expected timeline of 3rd Quarter 2014, while the petroleum law reform was and is ongoing, not knowing when the process will be completed?

Secondly, why would Dr. McClain be preparing a NOCAL BID ROUND knowing that once the reform is completed, NOCAL will not, by law, host the bid rounds?

NOCAL Impedes Legislative Forums

The recent 15-County oil law presentation done by the Legislature was marred with NOCAL problems and push back and it became apparent that the operations side of NOCAL was passively attempting to sabotage the process while the Board behaved like a inactive observer. FPA learned from Legislative sources that NOCAL refused to pay per diem to its staffers on time, leading many to want to quit the process due to unnecessary lodging and logistical hardships.

One source confirmed that NOCAL assigned a car, slated for repairs to the NOCAL team of law presenters and when the car broke down, NOCAL left its employees stranded for over five hours. The Speaker of the House, Alex Tyler, allegedly had to call in NOCAL Board members and executive staff to admonish them for such poor treatment of their own staff.

The oil reforms are seen as a key deterrent to misuse of resources for the post-war nation on the mends. Last year, the watchdog group, Global Witness warned that far-reaching reforms of Liberia's oil sector were urgently needed if its population is to benefit from future oil discoveries. GW cautioned that the laws could mean the difference between an oil sector that contributes to the country's development or one that cements Liberia's reputation for corruption.

Last year, the national legislature lawmakers began considering two new oil bills -- one that would apply to the National Oil Company of Liberia, or NOCAL, and another that would regulate future oil exploration and production.

The draft law on NOCAL operations is partly aimed at reducing the company's powers, by removing its policymaking duties so that it becomes simply a commercial oil company operating on behalf of the state. A separate body would be created to be responsible for policy issues, such as how to manage bidding. The Senate quickly passed the bills. But the bill has since been put on the burner by the lower house amid protests by civil society groups strongly calling for a more transparent process.

COMING WEDNESDAY: Watch out for the second of a three-part series on NOCAL, TGS and the Oil Reform Process.

Copyright © 2014 FrontPageAfrica. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.