Liberia: Petroleum Law Amended under Cover of Darkness? Civil Society Group Points out Troubling Changes

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MONROVIA – In April this year, Liberia will be giving out oil blocks in a round bid but a civil society organization has raised red flags on recent amendments quietly made to the Liberia Petroleum Law which are injurious to the oil sector and Liberians.

There is no evidence that the Legislature publicly discussed the amendments. News about amendments to the law was first seen on the Executive Mansion website after they were signed by the President.

It can be recalled that the Legislature held several executive sessions during their second sitting. It is believed that the law was amended during one of those executive sessions.

“PresidentWeah seems concerned about fulfilling his campaign promises and seeking funds to achieve that. His reasonable rush for funds and his unfamiliarity with issues about the oil sector is being exploited for selfish reasons by a handful of public officials,” the group noted, accusing the Minister of State Mr. Nathaniel McGill of spearheading the reform.

According to the Campaigners for Change analysis of the amended petroleum law vis-à-vis the previous law, several sections of the previous law were altered to serve the selfish ambition of a select few during the upcoming round bit at the detriment of the public.

A Director on the Board of Campaigners for Change International, Ambulah Mamey, was employed with the NOCAL between 2014 and 2018. He facilitated the presentation of Liberia’s 2014 draft petroleum (E&P) law across Liberia and co-authored the Consultation Report that, in part, informed reforms to the Law.

According to him, concerns raised with the amended law, especially about direct negotiation, executive allocation, citizen participation, and tenure, are the same concerns Liberians raised during the 2014 oil consultation. Opposition political parties and civil society organizations elevated these concerns to ensure the petroleum law guarantees transparency, avoids resource curse, protects Liberia from resource-related conflict, and ensures equitable benefits for all Liberians.  The content of the law was also informed by opinions of expert hired by the 53rd Legislature.

There is no evidence that the Legislature publicly discussed the amendments. News about amendments to the law was first seen on the Executive Mansion website after they were signed by the President.

Change in Size of Oil Blocks

In the previous law, Section 6.3 which stipulates the size/surface of offshore blocks states that, “The surface of offshore blocks constituted under this Act shall not exceed 2,000 square kilometers, and the surface of onshore blocks constituted under this Act shall not exceed 1,000 square kilometers.”

The original provision sought to reduce the blocks’ size, which previously had exceeded the “standard size” (i.e., b/w 1,000 to 1,500 sq. km) of blocks across sub-Saharan Africa. This was intended to enable Liberia maximize the value of its “potential” oil resources as well as concentrate oil exploration in a smaller space.

However, the amended law expands the size of the offshore block to 3,500 square kilometers and surface of the onshore limit has been doubled to 2,000 square kilometers.

The implication of this, according to the civil society group, is that the number of oil blocks in the basin will be reduced.

“LPRA/NOCAL and Legislature has provided no geological rationale for the change. There are indications that change was influenced by one of the oil companies currently in conversation with NOCAL to participate in the upcoming bid round,” Campaigners for Change alleged.

Stripping Off LPRA Independence

The original provision of Section 6.7 of the Petroleum Law on the establishment of the petroleum regulatory authority stipulated a Board comprising of three members, including the Director General. The law also designated a term limit for Board members and the Director General. Their key function is to provide oversight for the regulatory authority.

This was intended to make the Board of Directors more independent and to protect the Board from external influences and pressure, especially from the executive and the legislative branches of government.

However, the amended law states that “General policy oversight and direction shall be provided to the Authority by a Board consisting of five Liberians, including the Chairperson, appointed by the President.  They shall be persons of high integrity, shall have qualifications and experience in geosciences, engineering, management, law, or taxation and finance relevant to the responsibilities of the Authority, and shall not otherwise be an officer in the public service.  They shall serve to the will and pleasure of the President.”

The Civil Society noted, “The Senate recently rejected President Weah’s request to remove tenure positions at other public institutions. Can you guess why the Senate agreed to terminate tenure position in the oil sector a few months to the bid round?”    

Tampering with Transparency

Section 14.1 of the old Petroleum Law, a petroleum agreement may be awarded only on the basis of an international competitive bidding process conducted in accordance with the provisions of Section 15 through 17.

This was intended to bring credibility to the bid round and attract the quality of companies that Liberia needs.

But the amendment to the law stipulates that Petroleum Agreement may be granted in three (3) forms; (i.) International Open Competitive Bidding; (ii.) Direct Negotiations and (iii.) Executive Allocation to NOCAL.

Campaigners for Change: “Both provisions heighten the risk for members of the executive to circumvent the bidding process only to award blocks to companies that may not be best suited to emerge from a competitive bidding round. Currently, we can confirm that at least two officials of the Liberian government (Minister Nathaniel McGill, and Senate Pro-Tempore Albert Chie) are into separate conversations with international oil companies outside of the bid round.  Rep. Edwin Snowe is aware of the amendments and how it is poised to benefit McGill and others. His recent outburst to be “tough”, is a strategy to pressure the President’s inner circle to award petroleum agreement to the Russian oil company he brought to Liberia in 2013.”

FrontPageAfrica could not independently verify this information.

Again, the amended law repealed Section 68.3 of the previous law which intended to

provide additional comfort to international oil companies wanting to invest in Liberia without undermining the interest of the state.

Campaigners for Change: “International oil companies are customers/buyers. Customers/buyers will be attracted to a country (seller) if that country has strong legal safeguards. In the case of Liberia, an international company is likely to invest in our O&G program if that company has substantial comfort in our laws and is confident that our laws provide strong safeguards to protect their investment and mitigate “legal risks.” 

According to the Civil Society group, repealing of that section effectively limits to what extent an international oil and gas company would be able to enforce ruling(s) emanating from an arbitration court related to their investments in assets and resources of Liberia.

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