Kindly allow me first to congratulate the organizers of today’s stakeholders’ round table consultations. This could not have taken place at a more appropriate time. Rapid developments in the Oil and Gas Sector in the West Africa region are shaping a promising future for our community at large and for Liberia, in particular.
What evolves from these consultations, a new law, an appropriate framework, successful exploration, and mutually beneficial exploitation could actually change the lives of our people and brighten the future of this Nation.
Liberia’s Petroleum Exploration activities started in 1940. After subsequent exploration attempts and no commercial discovery, activities stopped in 1972. In 1980, activity resumed; the focus – the upstream sector, primarily oil and gas.
Based on 2D Seismic Data from TGS-NOPEC, Offshore Liberia is divided into seventeen (17) Offshore Blocks and thirteen (13) Ultra-Deep Water Blocks. Only 8 of the 17 blocks near shore are in their drilling phases. The thirteen (13) Ultra-Deep Water Blocks are to be contracted in the future.
Since 2007, 10 Production Sharing Contracts were signed, including 4 with 2 of the largest companies in the world, Chevron (2010) and Exxon (2013). Other International Oil Companies (IOCs) which have contracted some of the seventeen (17) Offshore Blocks include African Petroleum, Repsol, Anadarko, Tullow, etc. Most IOCs are in their exploratory stages with only 5 exploration wells drilled and more wells to be drilled in 2014.
Since 2010, Liberia has ratified re-negotiated contracts for better benefit to the Country and the Liberia people. In 2013, Liberia became the 1st Country in the world to negotiate a “Citizens Participation” with an oil company (Exxon). Recent reform efforts of the Petroleum sector involved the drafting of a new Petroleum Policy (2012). Now we are drafting a new Petroleum Act, Revising the NOCAL Act, designing a New Model Production Sharing Contract, and along the way incorporating clearly defined and appropriate Local Content provisions. Next, in anticipation of a heavy revenue flow, a Revenue Management Law governing financial resources from our minerals will be drafted. You will hear more details later today and over the course of these round table discussions.
Clearly, the challenge before us is to construct sustainable systems, programs and institutions. Strong Exploration and Production guidelines based on progressive, equitable policies, supported by internationally accepted laws will help maximize the benefits to Liberia.
Given similar geographical structure, the discovery of commercially viable oil deposits in neighboring and regional countries lend hope to the Liberia. The very potential of discovering substantial quantities of oil and gas offshore Liberia, will open new vistas and will create a new impetus for Liberia to become a competitive energy market player.
Revenue that would be generated by the oil & gas sector in Liberia, upon discovery, will significantly change Liberia’s economy. If properly followed and implemented, the new Petroleum Policy (2012), and the other instruments now under discussion could facilitate participation of Liberians into the oil and gas sector; and stimulate the development of other sectors of this economy, especially service-based activities. It is anticipated that thousands of jobs will be created in the hydrocarbon sector upon discovery. By all means necessary, these jobs will have to be occupied by the right professionals, with the appropriate skills-set and educational background. As a result, all key stakeholders and drivers of this sector: the Government, industry and academia must unite and resolve to establish the supply chain of well-trained Liberian professionals that this new industry would demand to function efficiently. That is a key to maximizing benefits and meeting the high expectations of our society and our external stakeholders.
Ladies and Gentlemen, we are dealing with intergenerational issues and assets. I cannot leave without addressing some of the challenges to sustainable development that we must consider.
The first is extreme poverty. Poverty remains the leading challenge suppressing our people – here and throughout our continent. Poverty is tied to the environment in intricate ways particularly in natural resource-based economies. Liberia, with its pressing need to speedily yet sustainably develop its natural resource sector, has this chance to get its oil and gas development plans right. Failure to get it right could dash hopes and worsen the situation.
The second is environmental impact of the extractive industries. For a continent that is dependent on its natural resources to achieve growth, the challenge of environmentally friendly sustainable development is daunting. Current patterns of extraction of non-renewable resources such as crude oil have had an untold impact on the environment. Oil spills and gas flares have polluted the environment significantly for more than 50 years in many oil rich nations. Liberia must seek to avoid similar paths.
Most importantly, we must ensure that the benefits realized are optimized for all Liberians.
The linkages are apparent and convincing. This current generation must take the right decisions and actions upfront. We are dealing with finite resources. Once depleted, they cannot be replenished. The spectre of future generations without the benefit of these mineral resources in a country that has not invested properly the proceeds from those resources should frighten us all.
Globally, we must continue to seek assistance from development partners and together we can study lessons learned from other oil rich nations with the intent of improving the effectiveness of our institutions, policies and regulatory capacity.
Nationally, we must work to strengthen our capacity to carry out strategic assessments of current policies and programs. Continued strategic assessments would render the oil and gas sector of significant importance, higher priority, and therefore strategic decisions would be subjected to social and environmental scrutiny.
We must engage the private sector (internationally and locally) to provide business solutions to sustainable development challenges in the oil and gas sector.
At the community level and all sectors of the Liberian society, through more and more awareness and inclusion, individuals and communal actions could prove in the short and long run important in developing our nation oil and gas sector sustainably. Recognizing that future generations should not suffer at the expense of the current generation’s inability to manage the country’s oil and gas resources properly.
In conclusion, on behalf of the Board of Directors of NOCAL, we again pledge our unwavering commitment to this process.
Thank you all for your time and involvement in this process