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CORLE asks Pres. Weah to cancel direct negotiation in oil bidding

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The Coalition for the Restoration of Liberians’ 5 percent Equity Rights or CORLE has asked President George Weah to cancel ongoing direct negotiations, undo the 2019 amendment, and re-launch an international competitive oil bidding process in ways that assure experienced operators that the bid process will be transparent, and their participation will not cost them any future reputational damage.

CORLE alarms here that President George Weah has announced – through the Liberia Petroleum Regulatory Authority- a dangerous decision to begin negotiating Petroleum Sharing Contracts (PCs) with International Oil Companies, allegedly outside of open, fair, and transparent competitive bidding, but through Direct Negotiations.

In a release, COREL says the President’s latest decision has removed all initial doubts that he has a desperate agenda to rob Liberians of their oil wealth and secure same for himself, his allies within the Legislature, and outside the government.

It explains that when oil companies seek petroleum operation licenses, it is an open competitive bidding process that gives them the confidence to compete and challenges them to offer their best set of financial, social welfare, environmental, and technical packages to host countries.

According to COREL, the Direct Negotiation method that President Weah now prefers and pursues has proven to be noncompetitive, non-transparent, and always executed behind closed doors and under dubious circumstances that leave those participating with more benefit than the country and its people.

It recalls that in 2009, it was through direct negotiation that Liberia lost approximately 245 million to Oranto Petroleum – a Nigerian-owned oil company, detailing that Oranto acquired three blocks (block 11, 12, and 14) from Liberia for a total of approximately five-hundred thousand United States Dollars, and a year later in 2010 sold 70% interest in those blocks to Chevron for 250 million; earning 245 million more than what Liberia received in 2009.

The release continues that on the other hand, through open competitive bidding in 2013, Liberia- earned an unprecedented 50 million in upfront payments from the award of just one block (block-13) to ExxonMobil.

It says while there remain concerns over the management of money generated from the oil sector, it is settled that competitive bidding- not direct negotiation is the best and most secure pathway for Liberia to attract qualified companies to its basin and generate the maximum financial and other benefits from its hydrocarbon sector.   

The negative experience Liberia had with direct negotiation, especially the loss of over 200 million, and the urge to avoid future reoccurrence was a major factor that led the country and its international partners including the United State Government- to reform Liberia’s oil sector in 2014, the release reads and notes that the 2014 reform included the adoption of a 2014 Petroleum Law which explicitly said in section 14: “petroleum agreement may be awarded ONLY on the basis of an INTERNATIONAL COMPETITIVE BIDDING PROCESS”.

CORLE laments that sadly in 2019, President Weah and the 54th Legislature secretly amended the 2014 Petroleum Law and included – among other detrimental changes- direct negotiation as an option to award petroleum operation license. It says Section 14 b (i) of the 2019 amendment also empowers the President to unilaterally decide when to use direct negotiation for the award of petroleum license.

It cautions that the 2019 amendment and the president’s latest decision to abandon competitive bidding- if not urgently corrected- will reverse all the gains Liberia has made to increase transparency and prevent or reduce chances of bribery in the award of petroleum operation license, adding the actions will also prevent Liberia from attracting credible and experienced operators to its basin and substantially reduce what they country should benefit from its hydrocarbon resource. Press Release

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