1 October 2013

Liberia: Oil 'Protected for Next Generation' - Robert Sirleaf

Robert Sirleaf, one of the sons of the President Ellen Johnson Sirleaf.

Washington, DC — When President Ellen Johnson Sirleaf appointed her son Robert Sirleaf to chair the board of the National Oil Company of Liberia (Nocal), there were cries of nepotism and corruption. In an industry where profits have often been used to benefit rulers and their families and cronies, that's not surprising. AllAfrica has carried numerous articles detailing complaints and accusations against the president and against Robert Sirleaf from the pages of Liberian news organizations, some of whose content is aggregated on this site.

Last week in New York, where several events around the United Nations General Assembly involved Liberia, AllAfrica had an opportunity to interview Robert Sirleaf about his work at Nocal. He pointed out that as chair, he did not run the regulatory body. That's the job of the president and CEO, currently Randolph A.K.W. McClain, a chemical engineer with a PhD and thirty years of business experience, mostly outside Liberia. Sirleaf said he welcomed an independent audit of Nocal's finances - including funds provided for health facilities and other social purposes by oil companies, as provided in negotiated contracts. Sirleaf, who was also 'special advisor' to the president, said his mandate was to seek out the best international expertise to help Liberia negotiate with exploration companies and to craft legislation to regulate the oil and gas sector. The stated aim was to ensure that Liberia's oil - should commercial reserves be found - would be used to benefit the country's people, now and in the future.

His 17 September resignation, after less than two years in the position, should not have surprised anyone, Sirleaf said. Exploration contracts have been signed and a petroleum bill has passed the Liberian Senate and is under consideration by the House of Representatives. His job as Nocal chair, he said, was finished, and he welcomed the chance to step out of the limelight. Here are excerpts from the conversation. Also see video clips.

You must have known in advance that your appointment would create a storm of controversy.

I'd actually been on the board for two years before assuming the Chairman's role. A lot of people forget - Liberia doesn't have oil! So when you talk about "our oil" or "our production", it doesn't exist.

What Liberia has is people exploring to see actually if we do.

I didn't ask for the job. [When the previous Chair retired,] the board went to the president and said that I was the best person for the job.

The president and I had a very long conversation about what we wanted to accomplish - a very long discussion, a professional discussion, a mother-son discussion - about what the downsides and what the upsides were.

We decided we wanted to do it the right way. We decided, look, don't sit on the board and sit behind [the scenes] and make decisions. Actually sit in the seat, let everybody see you, let everybody know it's you. And it wasn't a Robert Sirleaf show. It was a board with some vocal directors - the minister of finance of Liberia sits on the board. The minister of lands, mines and energy sits on the board.

So it was a decision about what relationships, what needed to be done, how aggressively we were trying to get the right partners - you know, to get the right partners on Liberian exploration activity. It was more managing the right partners, not managing oil or managing a discovery.

Previously, Liberia, for a host of reasons, didn't have what we felt was the right partners and the right relationships with international companies.

Elaborate on that. What does it mean to get the right partners?

The Liberia [continental] shelf is technically extremely challenging. We have some of the deepest waters where the exploration activity would take place. There were only, at the time, seven companies worldwide that actually had the technology to explore - to actually go at that water depth. People have to remember, the Gulf of Mexico is like 500 feet, Liberia was eight thousand feet! So we had to seek out the companies that had the technical ability to actually begin exploration programs.

Part two: we wanted the type of companies that actually represent world class in accountability, in practices, in transparency. If you look at the oil exploration business, especially in Africa, [major international companies] need stability. So we're saying, "Look, we have a very stable country. Liberia's safe. Liberia's trying to move forward. We want you to come in." In the beginning, trying to bring in what we felt were the right partners took an aggressive going after them. Exxon didn't come knocking to Liberia's doors. Liberia went knocking to Exxon's doors.

You've said previously that you tried to create a model of transparency and accountability at Nocal. Do you think you accomplished that?

We wanted to make the company extremely transparent, and that began with me in the seat. You know, I could have stayed on the board, I could have left the board and stayed in the background, but we decided not to do that. She [the president] decided, look, let's be up front and center, let the Liberian people know it's you.

The traditional model is: people make a lot of decisions and all these relationships are kind of run behind a curtain. We said, no, let them know you're there, let them know you're sitting in the seat, let them hear your voice, let them know you're representing your country. We wanted everybody to see what we were trying to accomplish, and we said that. Some of the downsides of that are my name became a bit of a lightning rod.

We were extremely successful to bring Chevron into our acreage, and we were extremely successful to bring Exxon. You've got to remember, Chevron and Exxon are number one and number three on the Fortune 500 list. There are a lot of other good ones, but these two are, by far, in the best class of companies, technically, financially, in the oil exploration business. If you brought in the American companies and what they stood for - transparency, accountability, great social-corporate responsibility - and that we were able to do successfully.

Then we said, let's reform the whole sector. Let's first fix what we can fix. And that reform was rewriting our petroleum laws. It's been quite interesting - people saying that I wrote the law. I don't have the intellectual capacity to write petroleum law! So actually, the World Bank hired a consultant. It was the World Bank's consultant that drafted the law.

OK, but if you accomplished a lot, why leave now?

In the beginning we said, once the reforms are in place, you're going to leave. And I said, "Fine, the reforms are in place." And I left. I'm very comfortable with that. I'm very happy about it.

But I'm also a realist, and I understand that being in the job was going to be extremely difficult. People were going to use it as a low-hanging fruit to create politics, to create attacks - we knew that. It was extremely challenging, but it was still a job that we felt we were going to be up front and center and do the right way. And I think we did. As a matter of fact, I know we did.

What did you bring to the job that made it worth accepting that downside?

I think it was a level of trust. I think it was a level of accountability that the President wanted. The board went to her, and said: "We're going to be moving into this phase of exploration; we need somebody. We think he's the right person, because we're talking about representing Liberia with very large companies.

When you're sitting across the table from oil companies, they're not going to operate in Liberia's interests. They're going to operate in the companies' interests. That's what they do, and that's what they should do. So you're going to have to come to the table prepared, ready to represent your country, ready to make the best decisions for your country, to get the job done.

I worked on Wall Street for 24 years. In business, it's about relationships; it's about how you're going to manage the relationships, getting what you want done out of people. So me walking in with these oil companies - they automatically knew who was sitting across the table from them, and we were successful.

Let's discuss the petroleum bill. You consulted a lot of people. In fact, AllAfrica interviewed Paul Collier, a prominent Oxford economist who advises a project called the Natural Resource Charter. He said you'd just been to see him and that you'd had serious, substantive discussions with scholars at his Centre for the Study of African Economies. What were you trying to accomplish?

Again, it's a brand-new petroleum law. I worked with people; I worked with the board on this. One of the things we said about this petroleum law is, "Let's not write this petroleum law for 2013. Let's write the law for 2017, 2018, 2019." And what we requested of the [World] Bank was a far-reaching, best international practices, highest accountability and transparency, highest level of bringing in local content - but write the law in advance of where the country is today, in advance of where the hydrocarbon business is today.

So that new petroleum law is actually four years in advance of where Liberia is. And according to [the Bank], it is the most far-reaching, it is the most advanced law, in the region. The Senate passed ours. We look forward to the House doing good public consultations and passing it.

We're gonna get there. They're going to see the value of doing it.

And these laws are so stringent - and that was the plan. Regardless of political change, regardless of the political landscape, that business is protected for the next generation.

The type of companies [allowed to bid for Liberia's business] is one of the things -financial capabilities, technical capabilities are extremely strong. The local content laws are extremely strong. The environmental protection of the waters is extremely strong in the law. But the bottom line is, once you get the right partners, all the other subsets fall in.

If you pick the right company to do exploration, safety, environment, the companies that have the highest levels of integrity to be able to do those things, a lot of other things will fall into place.

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