Liberia National Oil Company President Christopher Z. Neyor has warned citizens here to be careful against untimely high expectation from the country’s emerging oil exploration.
“While the geology of our basin looks promising for oil discovery, until we actually drill, this cannot be confirmed and we remain a frontier country. We therefore must be careful not to want too much too soon or we risk the quality investors turning cold on us and we are left with the hustlers,” he said.
Mr. Neyor said at a quarterly dinner of the Liberia Business Association yesterday that tax and duty are exempted on the importation of contractors’ equipment and supplies for exploration activities because of the millions they risk.
He noted that an oil contractor risks tens of millions of their money to drill in Liberia’s water where the chance of discovery is often less than 20%. In addition, he argued that they have to pay certain annual fees to NOCAL for capacity building, social programs, education, rural energy and climate change.
“If an investor assumes all the high risk for exploration and pay to you hundreds of thousands of dollars, is it fair to ask him to pay import duties on his capital equipment?” he questioned.
He further asserted that upstream oil and gas is an emerging industry in Liberia and there is a lack of understanding of the intricacies of the oil business, thereby cautioning citizens to manage expectation. Neyor acknowledged that despite widespread news that oil drill would start this year, it does not indicate that it would flow, or everybody would be made rich next year.
“There are three distinct periods in upstream oil and gas: the Exploration period which may take up to 9 years, the Development period which may take 5 to 7 years and then the Production period often over 25 years or so depending on the quantity of oil discovered,” Neyor noted.
Notwithstanding, he mentioned that the geopolitical consideration in allocation of oil blocks could not be complete without ensuring that blocks are allocated only for citizens or what he referred to as ‘indigenous allocation’.