Oil Exploration to Start Soon
Posted May 10, 2004
The National Oil Company of Liberia(NOCAL) has concluded negotiations with two companies for oil exploration rights in the country.
The two companies are REPSOL, a company based in Spain and ‘Oranto’, and an unnamed Nigeria registered company.
Making the disclosure recently at a news conference held in Monrovia, NOCAL’s president and Chief Executive Officer(CEO), Cllr. F. Musa Dean said, the two companies will conduct three dimension oil exploration in Liberia’s offshore blocks 17 and 12 respectively.
Cllr. Dean said the contracts grant each company three exploration period to be conducted over a 10-year time-frame.
The NOCAL CEO said, “the contracts also guarantee funds for training of Liberian nationals as well as funds for welfare projects.”
Cllr. Dean said, deep water exploration is expensive and may cost between US$10 - US$15 million to execute one block, and drilling which follows could cost between US$35 - US$60 million.
He said the entire process could take between six to eight years before the first barrel of oil is produced.
Cllr. Dean said, as most countries do not have the funds or expertise to explore deep-water three dimension exploration, they opt for investors to provide the finances and expertise under two different kinds of arrangement.
He named the two arrangement as the production-sharing contract and the tax and royalty, saying “the production-sharing approach is employed in most frontier areas.”
The NOCAL president said Liberia being a frontier area, the entities have opted for the production sharing approach.