Liberia's Oil Company Forks over $8M on Training

NOCAL CEO McClain

After being branded “delinquent” by members of the Lower House for snubbing the just-ended budget scrutiny exercise, Liberia’s Oil Company (NOCAL) yesterday released its 2013/2014 budgetary inflows and outflows.

Responding to lawmakers, NOCAL, at the time, argued that its president, Dr. Randolph McClain was out of the country, and so, the company could do nothing in the absence of its boss.

However, the Oil Company yesterday revealed that as part of its budgetary outflows for fiscal year July 1, 2013 to June 30, 2014, at least US$8,029,848.00 would be spent on manpower training and capacity building. That makes up at least 28% of the Oil Company’s total expenditure during the period under review.

NOCAL has also announced that it would be spending US$4,797,178.80 on personnel costs; making up 17%; while US$3,741, 263.88 would be spent on general budgetary expenditure (13%).

On capital expenditure and development, NOCAL will spend US$2, 898, 198.00 (10%) during fiscal year 2013/2014.  At least, 11% of the company’s expenditure would be on travel and consultancy, amounting to US$3, 234,482.00.

The company’s board gets to enjoy US$1, 372,000.00 during this period (5%). At the same time, US$2, 703,805.24 goes to allowances and benefits (10%) for NOCAL staff, while only 2% gets to go to the University of Liberia, amounting to US$475,000.00.

Meanwhile, the oil company is expected to collect US$19, 573,774.92 (69% of budget inflows) in social welfare contributions during fiscal year 2013/2014.  Also, US$3, 000,000.00 (10%) of the company’s budgetary inflows during the period under review would come from bid-round application fees.

Liberia is yet to award exploration rights for 20 of its 30 oil blocks. Stats posted on the country’s National Oil Company’s (NOCAL) website show only 10 blocks have been leased. The remaining 20 are open.

The Liberian basin consists of 30 concessionary blocks, according to NOCAL. Seventeen of these blocks are in the outer continental shelf in water depths between 2,500 meters (8,202 ft) and 4,000 meters (13,123 ft). Thirteen of the blocks are considered ultra-deep with water depths as deep as 4,500 meters (14,764 ft).

The country is concentrating on the 17 existing offshore blocks, and it has no plans to offer additional blocks. A third round of bids in anticipation of awarding contracts for Blocks 1-5 was cancelled by NOCAL in 2011. No bids have since been accepted for these blocks.

Justification given by NOCAL for the cancellation of the bid for the above-mentioned blocks was linked to a review of the country’s petroleum policy. Since then, (2011), NOCAL has remained mute about the inactivity---no update provided as to whether the bid has been reopened, or blocks (1-5) awarded already or not. Blocks 6 and 7, once under review, are still being negotiated since they were never fully submitted to the president or legislature, nor executed. Again, NOCAL is yet to update the public on the status of these oil blocks.

But admitting that a round of bids for blocks 1-5 was indeed canceled, NOCAL president, Dr. Randolph McClain told the Daily Observer that nothing will happen with these blocks until bids are reopened. He did not say when, however. Besides, all he could say regarding the status of blocks 6 and 7 was that bids just did not reach the point of conclusion. “All I can tell you is that those have not been concluded.”

 NOCAL confirmed that there are no plans to offer additional blocks at this time – neither the five remaining off-shore blocks 1-5, nor the ‘ultra-deep’ blocks (18-30) on the seaward side of the original 17 offshore blocks.