President Ellen Johnson Sirleaf
President Endorses NOCAL Sustainability Action Plan
MONROVIA, August 25 (LINA) - President Ellen Johnson Sirleaf has endorsed the National Oil Company of Liberia (NOCAL) Sustainability Action Plan (SAP) approved by its Board of Directors.
The Plan is aimed at ensuring the viability of the entity so that it continues to pursue its mission to develop Liberia’s hydrocarbon resources effectively in the best interest of the nation.
According to an Executive Mansion release, the Liberian leader made the disclosure in a nationwide address delivered from her Foreign Ministry office on Tuesday, August 25.
She said the Board’s Action Plan calls for drastic steps to bring costs under control and put NOCAL on a more viable financial footing.
According the Liberian leader, these steps would include significant staff cuts, a reconstitution of the Board, and retirement or replacement of the senior executive leadership.
Madam Sirleaf described the steps as necessary to ensure that NOCAL performs its duties to manage and develop Liberia’s oil resources, and to rectify recent mistakes in its performance.
She recalled the caliber of companies that were attracted to Liberia’s acreage to pursue exploration activities as also high, with major exploration deals struck between NOCAL and the world’s top oil companies (Chevron and Exxon Mobil) as well as the largest signature bonus (US$50 million) ever for a “Frontier” country such as Liberia.
She underscored that the execution of Production Sharing Contracts (PSCs) with super majors and other reputable international oil companies also resulted in significant interest in Liberia’s hydrocarbon sector with record licensing of seismic data and related revenue; noting that during this period, average revenue generated, US$30.5 million, compared to average annual revenue of US$4.5 million in prior years.
This, according to her, translated into US$10.6 million annual payments to the Government’s Consolidated Fund. The average annual revenue for the sale of seismic data/component for the period 2010–2013 was US$15.6 million - a 300 percent increase when compared to annual seismic revenue generated for earlier periods, she indicated.
President Sirleaf stressed that it was regrettable that, commencing in the fourth quarter of 2013, NOCAL’s revenue for seismic data sale began a precipitous decline, during which total seismic revenue fell by 29 percent from the prior fiscal year and was compounded by the Ebola virus disease of 2014 that led to a reduction in investor interest across all economic sectors for the impacted West African region.
“There is no doubt that the current oil price collapse and other external factors, including our recent Ebola challenge contributed to the current financial crisis that the company is facing,” she noted.
The Liberian leader said despite the obvious decline in revenue that began in late 2013, “NOCAL continued hiring staff at an alarming rate with exorbitant benefits resulting in the current wage bill of over US$7 million per annum.”
She, however, emphasized that the alarming situation at NOCAL prompted her action to instruct its board to take immediate action to ensure that the institution is restructured for organizational efficiency and effectiveness, and to ensure most prudent handling of the country’s financial resources, taking into account the Board’s Sustainability Action Plan.