President Ellen Johnson Sirleaf has approved measures being put in place at the cash scrapped National Oil Company of Liberia or NOCAL, saying that such move is necessary to provide stability at that entity.
Members of the NOCAL Board over the weekend announced a Sustainability Action Plan or SAP aimed at ensuring the viability of the entity. It said the measures which includes cutting down of staff and restructuring the financially ill organization, when implemented will enable it continue to pursue its mission to develop Liberia’s hydrocarbon resources effectively in the best interest of the nation.
Speaking in a nationwide address from her Foreign Ministry office on Tuesday, August 25, President Sirleaf noted that the Board’s Action Plan calls for drastic steps to bring costs under control and put NOCAL on a more viable financial footing.
She added that these would include significant staff cuts, a reconstitution of the Board, and retirement or replacement of the senior executive leadership. She described the steps as necessary to ensure that NOCAL can perform its duties to manage and develop Liberia’s oil resources, and to rectify recent mistakes in its performance.
President Sirleaf recalled the caliber of companies that were attracted to Liberia’s acreage to pursue exploration activities as also high, with major exploration deals struck between NOCAL and the world’s top oil companies (Chevron and Exxon Mobil) as well as the largest signature bonus (US$50 million) ever for a “Frontier” country such as Liberia.
“There is no doubt that the current oil price collapse and other external factors, including our recent Ebola challenge contributed to the current financial crisis that the company is facing”. She further intimated that despite the obvious decline in revenue that began in late 2013, NOCAL continued hiring staff at an alarming rate with exorbitant benefits resulting in the current wage bill of over US$7 million per annum,” the Liberian leader indicated.
She stressed that it was regrettable that, commencing in the fourth quarter of 2013, NOCAL’s revenue for seismic data sale began a precipitous decline, during which total seismic revenue fell by 29 percent from the prior fiscal year and was compounded by the Ebola virus disease of 2014 that led to a reduction in investor interest across all economic sectors for the impacted West African region.
She, however, emphasized that the alarming situation at NOCAL prompted her action to instruct NOCAL’s Board of Directors to take immediate action to ensure that the institution is restructured for organizational efficiency and effectiveness; as well as to ensure most prudent handling of the country’s financial resources taking into account the Board’s Sustainability Action Plan.
NOCAL Board chair Cllr. Seward Cooper addressing employees over the weekend said the fall in the price of cruel oil on the global market has caused serious fiscal difficulties for the Company. He said as a result, the company is left with no options other than putting in place a company-wide restructuring plan to include personnel and related administrative and operational adjustments that could significantly reduce the entity’s overhead costs.
NOCAL’s financial stability has come under public scrutiny over the past months, with President Sirleaf publicly declaring that she is awaiting an audit of the entity’s finances to take an informed decision moving forward. But she was also quick to admit during a radio talk show conversation with the President that falling oil prices has also played a role.-Edited by Othello B. Garblah