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The National Oil Company of Liberia (NOCAL) announced that it has approved in principle a proposal by the current holder of Liberia’s Block 13 to transfer its interest to a joint venture between ExxonMobil and Canadian Overseas Petroleum.

The proposal by Peppercoast Petroleum (formerly Broadway Consolidated PLC), which is the current holder of Block 13, would transfer 100% of its interest in Block 13 to Canadian Overseas Petroleum (COPL), which would then immediately transfer 70% working interest to a wholly-owned subsidiary of ExxonMobil.

The ExxonMobil subsidiary will become the operator of Block 13, responsible for exploration and any future development of oil resources discovered in Block 13.  The COPL subsidiary will hold the remaining, non-operating, 30% interest in Block 13.

Under the terms of the Production Sharing Contract, parties may only assign their interests to third parties whose "technical and financial reputation is well established".

NOCAL, which has the power to approve or reject transfers, has told Peppercoast that it accepts that the proposed joint venture between ExxonMobil and COPL satisfies in-principle the technical and financial competency requirements of the transfer provisions of the PSC.

NOCAL’s in-principle approval does not mean the deal is complete.  It means only that NOCAL accepts that ExxonMobil has the technical and financial capacity to serve as the operator of Block 13, and that NOCAL is therefore willing to meet with representatives of ExxonMobil and COPL to discuss proposed changes to the Petroleum Sharing Contract (PSC) governing Block 13. A Liberian Government team is heading to London next week to initiate those discussions.

This approval is subject to the requirement that ExxonMobil acquires its interest immediately following Peppercoast's assignment to the COPL subsidiary, and that the parties negotiate agreement on proposed amendments to the PSC. It is these amendments to the PSC that the Liberian Government team, made up of representatives of the Hydrocarbon Technical Committee, is going to London next week to negotiate.

The team will be headed by the President and CEO of NOCAL, and includes the Chairman of the Board of NOCAL and the Ministers of Justice, Lands Mines and Energy, Finance, the Legal Advisor to the President of Liberia, the Chairman of the National Investment Commission, and outside legal advisors.

President and CEO of NOCAL, Randolph AKW McClain said: “We are very pleased with this proposal as it brings the kind of credibility we welcome. NOCAL looks forward to working with ExxonMobil and COPL to conclude a fair contractual agreement and bring the saga of Block 13 to a satisfactory conclusion. This will enable us to move forwards to develop Block 13 for the benefit of all Liberians.”