10 March 2014

Liberia: Bidding Movement - Oil Company's Defense of CEO Backfires

Monrovia — The National Oil Company of Liberia came out swinging against several media report last week taking the head of the company, Dr. Randolph McClain to task for "undermining the ongoing oil sector reform process. In a statement issued in Monrovia on the weekend, the company dismissed as "malicious falsehood and bad journalism" stories being run in some local newspapers of late, accusing him of undermining the ongoing oil sector reform process.

But in a major contradiction, a report by the International petroleum publication, Upstream on McClain's recent presentation in South Africa, states that Dr. McClain in fact did reiterate his commitment to launching a licensing round, earlier promised for the third quarter of 2014, comprising at least 11 licenses, including blocks 1, 2, 3, 4, 5, 29 and 30 in the Harper basin, together with blocks 6, 7, 16 and 17 in the Liberia basin. Also in the frame are more than 20 blocks in the ultra-deep which have now been demarcated ready for licensing, although it is not certain whether these would be included.

The report went on to say that Liberian officials concerned with passage of the Petroleum Exploration & Production Bill and the draft National Oil Company of Liberia (NOCAL) are gearing up for the culmination of a consultation process which has taken a road-show around the country. "Thirty "round tables" will be held reflecting different lobbies, and interest groups will meet to approve the final package which sponsors hope can be returned to Capitol Hill. It is thought proceedings can be wrapped up within a week and any changes to the law passed to lawmakers before submission to President Ellen Johnson-Sirleaf House for assent. However, problems may persist in the House of Representatives, which failed to approve the draft on the last reading."

The Senate has already approved the Bill but, according to Upstream report, may have reservations if changes are made -- although proponents hope it may pass into law before the end of the month so that a new licensing round can go ahead under fresh institutional supervision. "NOCAL would become a purely commercial E&P entity, while a new regulatory body called the Petroleum Directorate would be established to organize and regulate fresh tenders," the report said.

On Saturday, NOCAL appear to be out of the loop of McClain's presentation in South Africa, asserting that at no time had McClain undertaken any activity that would undermine the integrity of the ongoing reform in the oil sector as alleged by some local newspapers.

McClain, according to the NOCAL statement, pointed out that, contrary to what is being alleged in the newspapers concerned, he is working assiduously to ensure that NOCAL remains focused on the reform of the sector for the benefit of the country and its people. In this regard, the National Oil Company of Liberia official said, NOCAL continues to fully cooperate with all relevant stakeholders, including the National Legislature to ensure a successful outcome of the oil sector reform process.

"The NOCAL President and CEO further made it clear that he is very much aware of his responsibilities as well as his obligations and limitations regarding the sector, and will do nothing to compromise neither the interests of NOCAL nor those of the government regarding the reform process. Dr. McClain urged media stakeholders who are in the habit of sensationalizing and personalizing issues for ulterior motives to desist."

Ironically, McClain's decision to announce bid round breached the oil sector reform process. The Senate passed Petroleum Law (2013) stating 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.

FrontPageAfrica reported last week that McClain, in a recent meeting with ExxonMobil, again announced that NOCAL is preparing for an upcoming bid round of 9 - 11 blocks offshore Liberia, a statement which reportedly sent alarm bells ringing.

Last September, 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.

Since 2007, 10 Production Sharing Contracts were signed, including 4 with 2 of the largest and most reputable companies in the World, Chevron (2010) and Exxon (2013). 5 exploration (meaning "looking for") wells have been drilled and more wells will be drilled in 2014. Liberia has a total of 30 offshore Blocks: 17 Deep Water Blocks and 13 Ultra Deep Water Blocks. To date, some eight companies are in Liberia's Deep Water Blocks currently looking for oil, but no company has found oil in enough quantities to produce it.

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.