CSO Group Flays Weah’s handling Of Oil Deal -Says transaction will rob Liberians of rightful benefits
A civil society group, CORLE has sharply criticized the decision of the government to negotiate the ongoing oil concession deal outside of open and competitive bidding process and opt for closed-door direct negotiation which according to the group will definitely rob the country of its rightful benefits and entitlements.
In a press release signed and issued by Mr. Ambullah Abutumaga Mamey, Organizing Chairman, the Coalition for the Restoration of Liberia’s Equity(CORLE)/Liberia Youth Initiative for Peace and Sustainable Development, the group alleged that President George Weah has announced through the Liberia Petroleum Regulatory Authority- a dangerous decision to begin negotiating Petroleum Sharing Contracts (PCs) with International Oil Companies outside of any open, fair, and transparent competitive bidding; but through Direct Negotiations.
The release added that the President’s latest decision has removed what it called all initial doubts that he has a desperate agenda to rob Liberians of their oil wealth and secure same for he and his allies within the Legislature, and outside the government.
“When oil companies seek petroleum operation license, it is open competitive bidding process that gives them confidence to compete and challenges them to offer their best set of financial, social welfare, environmental, and technical packages to host countries. The Direct Negotiation method that President Weah now prefers and pursues has proven to be noncompetitive, non-transparent and always executed behind closed doors and under dubious circumstances that leave those participating in the negotiation with more benefit than the country and its people”, the release said
The release furthered, “In 2009, it was through direct negotiation that Liberia lost approximately 245 million to Oranto Petroleum– a Nigerian-owned oil company. Oranto acquired three blocks (block 11, 12 and 14) from Liberia for a total of approximately five-hundred thousand USD, and a year later in 2010 sold 70% interest in those blocks to Chevron for 250 million; earning 245 million more than what Liberia received in 2009”, the release said.
The group said that on the other hand, through open competitive bidding in 2013, Liberia- earned an unprecedented 50 million in upfront payments from the award of just one block (block-13) to ExxonMobil. The group said While, there remains concerns over how the funds generated from the process were managed, it is settled that competitive bidding- not direct negotiation- remains the best and most secured pathway for Liberia to attract qualified companies to its basin and generate the maximum financial and other benefits from its hydrocarbon sector.
CORLE maintained that the negative experience Liberia had with direct negotiation, especially the loss of over 200 million, and the urge to avoid future reoccurrence was a major factor that led the country and its international partners-including the United State Government to reform Liberia’s oil sector in 2014. It added the 2014 reform included the adoption of a 2014 Petroleum Law which explicitly said in section 14: “petroleum agreement may be awarded ONLY on the basis of an INTERNATIONAL COMPETITIVE BIDDING PROCESS”.
“Sadly in 2019, President Weah and 54th Legislature secretly amended the 2014 Petroleum Law and included – among other detrimental changes- direct negotiation as an option to award petroleum operation license. Section 14 b (i) of the 2019 amendment also empowers the President to unilaterally decide when to use direct negotiation for the award of petroleum license”, the group said.
The group observed that with the 2019 amendment and the president’s alleged decision to abandon competitive bidding- if not urgently corrected- will reverse all the gains Liberia has made to increase transparency and prevent or reduce chances of bribery in the award of petroleum operation license. It added that the actions will also prevent Liberia from attracting credible and experienced operators to its basin and substantially reduce what they country should benefit from its hydrocarbon resource.
“CORLE therefore calls on President Weah to cancel ongoing direct negotiation, undo the 2019 amendment, and relaunch an international competitive bid process in ways that assure experienced operators that the bid process will be transparent/fair, and that their participation will not cost them any future reputational damage”, the group said..
The release concluded that as CORLE did during the just ended Liberia 2020 License Round which experienced the premature exit of bidders and the subsequent failure of the License Round to consummate agreement with any company, it will remain engaged strategically with key natural resource watchdog organizations, Liberia’s development partners and interested oil companies to expose the personal wealth accumulation agenda of the President and his allies that they desperately seek to achieve through the manipulations of laws governing the oil sector.
“By such action, CORLE will be seeking to ensure the recently announced direct negotiation is abandoned so that Liberia’s petroleum operation licenses are awarded to experienced, financially and technically qualified operators only after competitive bidding. The goal of CORLE’s action is to increase Liberia’s chances of drilling more wells, making commercial discovery, and protecting the rights and interest of ALL Liberians in future oil wealth”, the release concluded.