sharing in governance of extractive industries

AllAfrica.com: Liberian government signs up Chevron as oil exploration partner

Available: http://allafrica.com/stories/201008271044.html

Moving closer to joining the growing ranks of African oil producers, Liberia has selected one of the world's largest oil companies as lead partner to explore potential offshore reserves. The announcement puts the spotlight on President Ellen Johnson Sirleaf's pledge that Liberia will use its natural resources for growth and development and avoid the pitfalls that have plagued many oil- and mineral-rich nations.

The government said a statement on Friday that a three-year exploration agreement with the Chevron Corporation involving three deep-water concessions in Liberian waters "has been approved by the Executive and submitted to the Legislature for consideration and ratification."

"We are delighted to welcome Chevron as a partner for Liberia to explore our oil and gas assets," Johnson Sirleaf said in the Executive Mansion statement. "Energy is one of my top priorities, and with Chevron's technical skills we will be able to build our own capacity in the sector making a meaningful contribution to economic growth and job creation. A Chevron spokesman, Scott Walker , confirmed to AllAfrica "that an agreement to explore three deepwater concessions in Liberia has been submitted to the Legislature for ratification." Additional information will be provided when the process is concluded, he said.

This is a crucial partnership for Liberia," she said in an apparent appeal to the legislative branch to act promptly so exploration can begin before the end of the year. She said Chevron would bring to the country not only an important investment but also "the latest technologies, best practices in transparency and efficiencies, and an excellent record of community and social responsibility."

But ratification may not come easily. Many legislators have been less-than-eager to support the popular president's ambitious agenda, and political tensions are on the rise as the country moves towards elections in October 2011. Johnson Sirleaf, who is seeking a second term, is likely to be opposed by several contenders, including George Weah, the soccer star who was lost in a 2005 run-off in the country's first elections following 25 years of disruption and civil war.

Following a visit to the United States in May, Johnson Sirleaf said she had met Chevron executives to encourage the oil giant "to come and do business," which she said "will send a big signal" that Liberia is a place investors should take seriously. Negotiations continued in Monrovia between a team of senior Chevron officials and the Liberian leader and her advisers.

The Executive Mansion statement called the agreement "a further vote of confidence in the country's future" and cited other major investors who have committed to projects in the country, including ArcelorMittal, Firestone, BHP Billiton, Sime Darby, Anadarko Petroleum, China Union and Golden Veroleum, an Indonesian firm which this month approved a $1.6 billion palm oil deal.

The statement also pointed to the September 5 launch by Delta Airlines of service between Atlanta and Monrovia - "the first direct flights from the U.S. to Monrovia in 20 years." The flight, which will also stop in Accra, will operate on a 215-seat Boeing 767-300ER aircraft, Delta has said. The service had been scheduled to begin in June 2009 but was delayed by the U.S. Department of Homeland Security pending completion of upgrades at Roberts International Airport outside the capital, Monrovia.

Since taking office in 2006, Johnson Sirleaf has made the fight against corruption a cornerstone of her platform. In a May 2010 AllAfrica interview, she called corruption "systemic" in Liberia and said: "The only way to solve it is to take it from under the carpet and deal with it." She expressed confidence that the country is "moving in the right direction and that, in a few years, we'll solve this problem."

Chevron currently has major operations in Africa's two largest oil producing nations, Nigeria and Angola, and also is engaged in exploration and production in Chad, the Democratic Republic of Congo and the Republic of Congo.

Exploration in Liberia to date has been carried out by the U.S.-based independent producer Anadarko and UK-based Oranto, which operates in Nigeria and has interests in several other West African countries. Seismic data produced by Oranto from two offshore blocks showed prospects for sufficient undersea petroleum reserves to interest a big player like Chevron.

Liberia sits at the western edge of the Gulf of Guinea, which extends along the coast to Nigeria, a major producer since the 1960s. Oil prospects have risen for Liberia's neighbors to the east, including Cote d'Ivoire and Ghana, where production is slated to begin later this year in a large offshore field called Jubilee.

Advances in both exploration and production techniques have opened the way for expanded oil and gas production across Africa. According to a U.S. Geologic Survey Fact Sheet issued in February, there have been more than 275 new fields discovered in West Africa since 2000.

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