The Liberia Energy Sector Network (LENS), an organization of professionals, businesses, and organizations in the energy sector in Liberia, after extensive deliberations over the President’s ARREST agenda, stress the need to ‘Put Energy First.’ In a statement issued on Tuesday, January 30, 2024, the interim leadership of LENS Network noted that energy is not merely ancillary to national growth but imperative. They highlight the absence of energy as a centerpiece in the ARREST agenda outlined by President Boakai in his State of the Union Address.
“Energy cuts across all items of the ARREST agenda. We cannot accomplish any of these outlined goals without a thorough consideration of the energy situation in the country. High fuel costs and a lack of electricity will impact the tourism industry, for example. Many hotels rely on generators to keep facilities running, driving up costs and forcing many businesses to close. Solving the energy crisis first will mean huge gains for the tourism industry,” says LENS interim Chairman, Michael Johnson.
It is very expensive to run hotels and recreational facilities in Liberia due to the electricity situation. Because energy cost is a major expense in the tourism sector, the cost to tourists is quite prohibitive. A normal Liberian cannot enjoy the facilities offered. Even Liberians abroad cannot afford to fully enjoy the top-end tourism facilities available due to the high costs mainly associated with electricity to run those facilities.
The Energy Factor is a central catalyst in achieving the new national agenda, and a consideration of the whole energy sector, not just electricity, is required.
A New Organization with a Mission
Founded in the early days following President Boakai’s historic second-round win, LENS Network has garnered a following akin to who’s who in the energy sector in Liberia. “We, as professionals in the country and abroad, believe that Mr. Boakai as President could set up policies and the foundation for energy independence for Liberia.”
The central vision of the organization is to achieve energy independence for Liberia by the year 2050. Speaking at the launching ceremony of the organization, held at the Monrovia Christian Fellowship on 9th Street, on Jan. 20th, the Interim Chairman of LENS Network, Mr. Michael Johnson, cited the need for an aggressive approach to take hold of the opportunities offered to solve the major issues in the sector. A collaborative approach is required between sector professionals, organizations, institutions, businesses, and the government to achieve a goal that will benefit not just us in our lifetime, but generations to come. Mr. Uriah Taylor, a geologist and petroleum engineer, in a special statement spoke of the need for speed to get things done, citing that the organization, having just started, has already stirred the pot in the sector. He cited that energy is not just electricity. “Often overlooked are the key opportunities in the oil & gas exploration subsector, which has been dormant for years. ‘Oil and gas exploration firms are knocking at our door, and we need to encourage them to come and invest.'”
Rebooting Oil & Gas Exploration
The official launch event, attended by an array of professionals and renowned civil society leaders and activists, including Macclean Renner and Archie Ponpon, was climaxed by an oil & gas Upstream Roundtable. During the Roundtable discussion, several petroleum upstream sector experts discussed pathways to reboot now-dormant oil & gas exploration in Liberia.
“One key thing is to place competent persons as soon as possible to the NOCAL and the Liberia Petroleum Regulatory Authority. The country has trained professionals to carry out the work required to reboot the sector. Oil & Gas Companies are knocking not just on our doors, but on the doors of other countries. Soon, they will have to decide whether they will spend their exploration dollars in Sierra Leone, for example, or Liberia,” noted one speaker.
Mr. Fabian Lai, a petroleum finance expert and CFO at TipMe, also outlined the millions of dollars that could be raised by the government if it seized the opportunity to reboot oil & gas exploration quickly and aggressively. “Oil & Gas is a sector where you don’t have to find oil before you start to get returns. Companies spend millions on seismic data, an ultrasound of the ground to determine if an area could contain oil & gas deposits. They also pay hundreds of thousands in contract fees like surface rental and education fees to universities. That is before they drill the first hole in the ground.”
Mr. Tim Jarry, Exploration Director at NOCAL and panelist, said the government can take advantage of the opportunities afforded by the resurging interest in exploration in the region and encourage companies to come and explore for oil & gas. He also cited many of the business opportunities that could be made possible with an active oil & gas exploration environment. ‘The country could really benefit and in the very near term. It is also important to continue to drill wells. Ghana achieved its oil & gas riches after drilling 113 wells. With the new and current technology, we don’t need that much.
Low Hanging Fruit for the Boakai Team
With the current interest from companies like ExxonMobil and Shell, the Boakai team could seize the opportunity to bring the oil & gas majors to its shores and reboot the sector. Companies must sign a Production Sharing Contract, promising to give the government a portion of the production, usually 15% if oil is found. And the companies commit to putting up all the money for it. In April of last year, ExxonMobil applied to enter Direct Negotiations with the Liberian government for four offshore blocks. The process has stalled, however, because of uncertainties. “This is money on the table, and we are ignoring it every day that the sector remains in limbo,” says LENS chairman.
Mildred Kortu, a CSR Professional in the Oil & Gas sector noted, “When the Oil companies came in the early 2010s, they provided funds for Corporate Social Responsibility, and the country was able to do a lot of good with the funds. University Laboratories were built, 1000s upon 1000s of university students were put on scholarship. Many students went abroad on scholarships and receive education at top institutions. That industry offered more scholarships in that short period of time, perhaps more than any other industry over the same period.”
LENS Network believes that an active industry Reboot agenda by the Liberian government could attract US$20-50M over the next two years in signing bonuses, contract fees, and CSR allocations by oil companies, money much needed for the government’s ARREST agenda. The Sector Think Tank’s Billboard near the Capitol Building could not have said it much clearer. It reads, “Reboot Oil & Gas Exploration: Billions at Stake”. “This is not a joke or wild assumption,” says, Interim Chairman, Michael Johnson, a Geologist and Engineer and CEO of Demus Exploration & Production, a Liberian-owned oil & gas exploration firm. “Guyana has discovered 11 billion barrels and that has changed the complexion of the Guyanese economy just in the last five years.” Ousman Dukuly another Energy professional and panelist called for the education of the Liberian public and the new government on the benefits of the Oil & gas upstream sector and how it really works. ‘People don’t really know the potential and benefits of the sector. In fact, people think that there is already oil being taken from Liberia. Liberia has not found commercial oil. To do so, Liberia must drill more wells. Even though there is potential, we need to manage expectations.’
Energy and the ARREST Agenda
Energy is not just electricity and oil & gas. Energy is a conglomeration of many subsectors, including renewables. ‘Energy is the ability to do work. To get the economy working, you need energy,’ one expert said summarily. ‘If we found oil/gas deposits in our country, we could sell to foreign markets and generate funds for our development agenda. Finding huge gas deposits could mean tapping into much-needed fuel for power generation. We could also tap into the production of biofuels and become a leader in the region. We could also use biofuels as a cheap alternative source of energy for transportation. Billions of barrels of ethanol are produced from corn and sugarcane each year. This is a fuel that has net zero emissions since the carbon extracted from the atmosphere by the plants to grow is the same carbon that returns to the atmosphere when ethanol is consumed. Liberia could be a leader for biofuels in the region.
‘I don’t think tourism translates into anything without energy being tackled first. We will need a country with 24/7 power availability. Not just that, but a surplus that can be used by the industry to produce goods and services for the economy. Our students will need electricity to study. Hospitals will need electricity to run equipment and provide lifesaving care for all emergencies no matter the time of day. Hotels in the tourism space can reduce costs when they don’t have to run generators. Crime and the rule of law can be addressed when millions now in the dark have stable electricity. Roads and infrastructure projects can be carried out with low fuel costs for equipment. With electricity, work can be carried out 24/7, an option that could drastically shorten project delivery times and reduce project costs. We can use an abundance of our sunlight to generate solar energy. The Agricultural value chain could be explored fully, and energy availability could mean factories for value-added products along the chain. The culmination of it all is Energy availability. And this ARREST agenda can only be possible if the current government Puts Energy First.