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Bad signs for oil sector

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An official at the National Oil Company of Liberia or NOCAL is suggesting that the country’s potential oil basins will be “empty” of operators if oil is not discovered in commercial quantity in 2018 to necessitate drilling process here.

Bad signs

NOCAL Communication official Mr. Ambullah Mamey told a media workshop organized by U.S. multinational oil company Exxonmobil on Wednesday, 5 October at the Royal Grand Hotel in Sinkor that oil companies operating two of Liberia’s basins may pack out and leave in 2018 upon the expiry of their contracts with government if oil is not discovered.

Liberia is still said to be at exploration stage, and potential oil block LB – 13 is under contract to Exxonmobil while block LB – 14 is also under contract to another U.S. multinational energy corporation Chevron.

Mr. Mamey argued that after years of investing millions of dollars from exploration stage to the point where oil companies would determine whether oil wells are dried or could be drilled, they would most likely abandon the wells if they do not discover oil in commercial quantities, meaning that they would incur more losses if they go on to drill.

As such, he suggested that it was advisable for Liberia to keep its basins active with explorational activities by encouraging other companies to come in and take over once the other companies have exited.

He argued that Liberia’s motivators are the fact that neighboring Cote d’Ivoire and Ghana which are all on the Gulf Guinea as Liberia have discovered oil, thus stressing the need to have investors keep Liberia’s basins active.

Concerning the drop in global oil prices that may be affecting Liberia’s oil sector, Mr. Mamey said companies may not be interested in buying Seismic data which give clues as to whether there may be oil in a particular basin.

He had suggested that NOCAL had raised funding from sale of Seismic Data and not selling of oil blocks as have been perceived here. He added that oil blocks are not sold, but leased to companies for a period of time to be returned to government or renewed based on the contract.

The Vice President at the Global Business Development (International Human Resource Development Corporation or IHRDC) Mr. Robert W. Taylor told the workshop that Liberia is still at the first stage which is exploration.

He said when the drilling process commences, it is captured through satellite and the country’s revenues and tax authorities know exactly the quantity of barrel being drilled and what the government is entitled to as per the contract signed.

He added that the information that companies rely upon to make investment come from Seismic Data, a kind technical testing of a potential oil block which gives an expert company the clue that there may be oil within a particular block.
But he clarified that the risk involved is that wrong direction provided by geologist as to where a company should drill to drill could unfortunately compel a company to abandon an oil well if it fails to discover oil.

Editors and reporters from various media institutions here attended the workshop, in an effort to provide information to the operation of the oil sector to and management public expectation by providing facts.

Presenters at the workshop highlighted the threats that also associate with the oil sector especially when the public cannot get informed with facts. 

By Winston W. Parley

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