Monrovia – The Interim Management Team (IMT) of the National Oil Company of Liberia (NOCAL) has rejected recent allegations in the media about the finances of NOCAL and how they are being managed.
Senator Dallas Gueh of Rivercess County has accused the IMT of spending US$ 1million as annual personnel cost, and making unnecessary and expensive travels; while other media institutions have published reports about NOCAL being allotted funds in the 2016/2017 national budget.
“These allegations are a deliberate falsification of the facts and have no basis whatsoever. We challenge those making the allegations to provide evidence in support of their claims or render an apology for misleading the public.
“We have accepted an invitation from the Honorable Liberian Senate to give details of all the facts we have to disprove these allegations and to also address other concerns about Liberia’s emerging oil & gas sector.
“While we wait for the hearing which is scheduled for March 14, 2017, we like to provide to the public a summary of all the facts about NOCAL finances and how they are managed.
We also want to provide an update on the status of the Liberian basin and the audit of NOCAL activities being conducted by the General Auditing Commission (GAC),” the Oil Company said in a statement.
No Appropriation In The 2016/2017 National Budget For NOCAL:
According to NOCAL, the Government of Liberia did not approve any appropriation for the entity in the 2016/2017 National Budget and did not also do same for previous years.
“The budget captures all spending entities under a particular line item, and a simple check would show that NOCAL is not a spending entity in the budget. We find it embarrassing, that individual and institutions with interest in knowing or reporting on financial and other activities at NOCAL are still unable to do a simple check on a budget that is readily available,” the statement noted.
NOCAL Annual Personnel Cost Is Not Usd 1 Million
The IMT has reduced NOCAL’s workforce from 155 persons to 37 effective and efficient staff; thus reducing personnel cost by 89 percent. The personnel cost of US$ 7.8 million incurred annually by NOCAL before the appointment of IMT has now been reduced to US$ 1.3 million for the entire 17 months of the IMT leadership.
These reductions were made in three phases: during phase-1 (October 2015 to December 2015) the IMT reduced workforce from 155 persons to 56 persons, resulting to reduction in the monthly personnel cost from US$ 658,333.33 to US$ 119,991.38.
During phase-2 (Jan 2016- April- 2016) we reduced workforce from 56 persons to 40 persons; resulting to reduction in personnel cost from US$119,991.38 to US$ 91,649.83. And during phase-3 (May 2016- present), we reduced workforce from 40 persons to 37 persons resulting to further reduction in personnel from US$ 91,649.83 to US$ 63,593.97.
As explained above, total personnel cost incurred by the IMT for the last ten months (May 2016- March 2017), is less than the one-month personnel cost incurred by NOCAL before the IMT was appointed.
The IMT has made full severance payment of US$ 2.4 million to all redundant staff; except former executives. Of that amount, the government of Liberia provided 1.3 million as a loan that NOCAL is required to repay by August 2017.
All these personnel related actions taken by the IMT were informed by NOCAL’s Sustainable Action Plan (SAP) approved by President Ellen Johnson-Sirleaf and done under the watch of the Ministry of Labor.
“Expensive” Travel Claims Have No Basis:
From August 2015 to February 2017, the IMT has made seven foreign trips; all very significant to generating revenue for the corporation and ensuring other exploration activities were executed. The total expenditure incurred by the IMT for these travels was US$ 77,481.32, and the financial benefits derived therefrom were US$ 4.7 million.
The expenses made by the IMT on foreign trips, for the last 17 months, is far less than the average US$ 258,000 spent on international travel for 12 months before the appointment of IMT. The reduction in travel expenditure is another outcome of the austerity measures the IMT has been implementing in accordance with the SAP.
GAC Audit:
The General Auditing Commission (GAC) has concluded all the field work related to the audit of NOCAL financials and a draft of the audit report is expected to be sent to NOCAL for comments before the end of March. The audit covered activities from FY 2011/2012 to FY 2014/2015.
The IMT want to encourage all stakeholders to wait for the final report of the audit and support recommendations therein. Early 2016, the IMT commissioned an audit of NOCAL’s activities. The call for the audit was in adherence with NOCAL’s core values of transparency and accountability and also in compliance with the SAP approved in 2015 by President Ellen Johnson-Sirleaf.
With these clarifications and updates, we encourage the public not to take these allegations seriously as they are purposely meant to distract the positive efforts being made by other stakeholders who are concerned about the current status of the basin and are brainstorming about strategies to keep it active.
Status Of The Basin:
Currently, only two of Liberia’s 30 potential offshore oil blocks are contracted; LB-13 is contracted to ExxonMobil until April 2018 and Lb-14 is contracted to Chevron until July 2018. All remaining 28 blocks are vacant.
From 2011 to now, a total of 10 exploratory wells have been drilled in the basin; including the one recently drilled by ExxonMobil. And all drilling programs have not resulted in a commercial discovery. These statistics are evidence that the Liberian basin is still underexplored; thus requiring an urgent need to keep it active with more exploratory activities.
For instance, Ghana drilled almost 100 exploratory wells before a commercial discovery was made at the Jubilee field in 2007. Nevertheless this status of the basin, the IMT remains optimistic about its potential, and firmly believes that more exploratory drilling in the basin will lead to commercial discovery.
