As many foreign firms sign on to explore crude oil along the shores of Liberia, the head of the National Oil Company of Liberia, (NOCAL), has cautioned Liberians to lower expectations, saying, the country may begin benefiting from oil resources not in the immediate future, but only after 25 years.
He said the three stages — exploration, development, and production periods — involved in extracting crude oil will span 25 years depending on the quality of oil that will be discovered in the country.
Canadian Overseas Petroleum Limited (COPL) recently disclosed offering U$45m to U$50m in cash toward the purchase of block 13 of Liberia’s oil industry.
But, in his speech Friday night during a dinner hosted for the Liberian Business Association, NOCAL’s CEO, Christopher Z. Neyor did not mention how much NOCAL has so far accrued from foreign companies expressing interest in the Liberia’s hydrocarbon resources.
Mr. Neyor warned Liberians against avenge high expectations for immediate benefits from oil resources, saying: “We must be careful not to want too much too soon or we risk the quality investors turning cold on us and we are left with the hustlers to take our oil resources from the country.”
The business executives became amazed when Mr. Neyor informed them that many Liberian business contractors might forfeit their chances of purchasing blocks because of the huge cash requirement involved.
“The Petroleum Act allows for at least 10% citizen equity in oil blocks; this has been difficult to implement because of the huge cash requirement to do the exploration work plan of the Petroleum Sharing Contracts (PSC),” Mr. Neyor indicated.
He, however, allayed their fears, saying that NOCAL has explored funding opportunity in the London capital market through an investment consultant to structure capital access for Liberians who win equity in oil blocks here.
Mr. Neyor urged the the business community against allowing one country or a particular region of the globe to dominate Liberia’s oil blocks, adding: “Doing so will have long term adverse consequences that are not in our best economic and political interests.”