1. PRESENTATION TO THE AAPG
OVERVIEW OF THE UPSTREAM PETROLEUM SECTOR REPUBLIC OF LIBERIA, WEST AFRICA
Presented by:
Marie E-Leigh Parker
Vice President for Administration
National Oil Company of Liberia

2. Major Policy Objective of the Government
: To create an enabling environment for private sector investment in the upstream petroleum sector and to ensure sustainable development if petroleum resources are discovered .

3. INTRODUCTION
LIBERIA IS LOCATED ON THE WST COAST OF AFRICA BOUNDE BY SIERRA LEONE, GUINEA AND IVORY COAST

4. Socio-Economic Framework
INTRODUCTION
Socio-Economic Framework
Liberia is the only African Country with colonial ties to the USA
Its Constitution, Laws, flag and other national symbols are modeled after those of the USA

5. INTRODUCTION
Liberia’s Capitol Building on Capitol Hill, Monrovia recently renovated

6. INTRODUCTION
In Liberia you will see places named Capitol Hill, Maryland, West Point, etc.
Liberia believes and practices the Free-market economy

7. INTRODUCTION
Like most countries, Liberia had a period of civil conflict (intermittently from 1990 to 2003); We remember the French Revolution, the American civil war, etc.
The period of civil conflict is now history as Liberians have resolved to travel on a path of unity and development;

8. INTRODUCTION
In 2006, the First Female in African to be elected President, was inaugurated in Liberia; President Elen Johnson Sirleaf graduated from Harvard University, with long years of experience working in the UN System, Citibank and other international organizations.

9. INTRODUCTION
Since her election, tremendous progress has been made in the areas of good governance, establishment of the rule of law, gradual economic growth security sector reform and improvements in international relations.

10. INTRODUCTION
Early this year, President Ellen Johnson Sirleaf visited the USA

11. Reciprocal visit of President George Bush to Liberia
The recent visit of US President George Bush to Liberia

12. Overview of Petroleum Prospects
Liberia is a frontier area; no oil is being produced
Studies have shown that Potential is in offshore areas

13. Overview of Petroleum Prospects
Exploration work conducted intermittently between the 1960’s and 1980’s were in shallow waters. Only seven (7) wells were drilled during this period. Although no oil was found, oil shows were found in some of the wells.

14. Overview of Petroleum Prospects
Finds in the deep water areas of the Gulf of Guinea and other places along the African Coast give Liberia course for optimism for its deep water prospects

15. Overview of Petroleum Prospects
TGS NOPEC was commissioned and in 2000 it shot a total of approximately 9,383 km of 2D seismic lines.

16. Overview of Petroleum Prospects
Seventeen (17) blocks were delineated, running from the continental shelf into deep waters

17. Block/Acreage Holdings
The first Bid round resulted in the following Block holdings:
Repsol Exploracion: LB -17, LB-16
Woodside Energy: LB-15
Oranto Petroleum: LB-11, LB-12
Regal/European Hydrocarbon: LB-8, LB-9
Broadway Consolidated PLC: LB-13

18. Block/Acreage Holdings
The Broadway and Oranto PSCs have been completed and ratified by the National Legislature; These 2 companies are now planning the execution of 3D Seismic surveys.
The PSCs for Repsol, Woodside and Regal/European Hydrocarbons have been completed and are presently undergoing the ratification process at the National Legislature

19. Legal and Regulatory Framework
The Petroleum PSCs reflect the following :
2002 Petroleum Act
The 2000 Revenue Code
The Environmental Protection and Management Law
The Investment Incentive Code

20. Legal and Regulatory Framework
The Petroleum PSCs reflect the following :
Because Liberia is a frontier area, many considerations and incentives are given during the PSC negotiation;

21. Terms in Typical Negotiated PSC
Duration of exploration: 8 Years
First Period: Years
Second Period: 2 Years
Third Period: 2 years

22. Exploration Work Commitments
First period:
3D Seismic Survey
Drilling of 1 Exploratory Well
Second Period:
Third Period:

23. First Period: US$8m Second Period: US$10m Third Period: US$10m
Minimum Expenditure
First Period: US$8m
Second Period: US$10m
Third Period: US$10m

24. Environmental Management Program
EIA required prior to commencement of exploration and production
Recovery of production costs and profit Oil split
Cost recovery: 70%

25. Sample Profit Oil Split
Total Production
(Barrels per Day)
Government
Share
Contractor’s
0 – 100,000
40%
60%
100,000 to 150,000
50%
Over 150,000

26. Income tax Rate: reduced from 35% to 30%
Taxation
Income tax Rate: reduced from 35% to 30%
Signature Bonus: Nil

27. Production Bonuses are Negotiable Sample Production Bonus:
When total production reaches
30,000 bbl/day = US$2m
50,000 bbl/day = US$3m
100,000 bbl/day = US$5m

28. Applicable Contributions Include
Contribution to Hydrocarbon Development Fund
Annual Contribution to training estimated as follows:
US$100,000: During exploration
US$200,000: During production
US$75,000: To University to Liberia

29. Annual Social Welfare Contribution Estimated to be as follows:
US$150,000: During exploration
US$250,000: During production

30. SECOND BID ROUND EXTENSION
THE GOVERNMENT OF LIBERIA HAS MADE AN EXTENTION OF THE BID ROUND CLOSING PERIOD BY ONE MONTH
THE NEW DATE IS JULY 1, 2008 AT 12:00 O’CLOCK NOON

31. CONCLUSION
The results of exploration to date indicate a very promising future for hydrocarbon exploration in Liberia,
Oil Prone Petroleum to Mixed Oil & Gas Prone Systems occur in the offshore Liberia Basins,
Security Conditions for Long Term investments are excellent and long term stability is assured.
NOCAL’s PSC terms meet the objectives of both the Contractor & Government with a “WIN-WIN” result.

32. Contact: www.nocal-lr.com
END
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