The House of Representatives has ratified another oil agreement for the awarding of a Production Sharing Contract (PSC) for Oil block-LB-16 following two days revision of the document. The contract has been endorsed by the Liberian Senate.
The contract was submitted Tuesday by President Ellen Johnson-Sirleaf seeking legislative scrutiny and endorsement.
It can be recalled last year, the Legislature ratified the controversial oil block-13 agreement which was widely described by Liberians as “4G” in similar fashion amidst public protests.
Contractors for the PSC include Liberty Production Corporation, based in the United States of America; Pillar Oil Limited, an oil exploration and production company from the Federal Republic of Nigeria and New Millennium Corporation, an entity owned by some private Liberian citizens.
In a report recommending the ratification of the Oil contract, the House Joint Committees on Lands, National Resources and Energy, Investment and Concessions, Contracts, Monopolies and Public Procurement Commission and Judiciary called on plenary to ratify the contract because it is in the interest of the country and its people.
The Committees said its decision to recommend the ratification of the contract is in line with Article 7 of the Liberian Constitution which states that: “The Republic shall, consistent with the principles of individual freedom and social justice enshrined in this Constitution, manage the national economy and the natural resources of Liberia in such manner as shall ensure the maximum feasible participation of Liberian citizens under conditions of equality as to advance the general welfare of the Liberian people and the economic development of Liberia.”
The committee further quoted Article 22 (b) of the Liberian Constitution which states: “The Republic may, on the basis of reciprocity, convey to a foreign government property to be used perpetually for its diplomatic activities. This land shall not be transferred or otherwise conveyed to any other party or used for any other purpose, except upon the expressed permission of the Government of Liberia. All property so conveyed may escheat to the Republic in the event of a cessation of diplomatic relations,” as one convincing reason that triggered its recommendation for the ratification of the production sharing contract by the House”.
The committee said after receiving the contract on December 16, 2014, it met in committee room for two days to deliberate on the instrument, using a manual production sharing contract (PSC) provided to it by the National Oil Company of Liberia as reference.
The committee said the deliberations sought an expert opinion from NOCAL and other stakeholders in the oil sector.
In her communication Tuesday to plenary, President Johnson-Sirleaf said NOCAL and the Hydrocarbon Technical Committee agreed to the recommendation in keeping with the PSC law.
The Liberian leader said the agreement is the highest bid with a signature bonus of US$10,500,000 and within the addition of funds payable for the acquisition of seismic data for LB-16 at US$11,500,000.
She said US$22,000,000 in total would be received from the lease transaction for the oil block.
The President disclosed that “this is the first of the PSCs from the Liberia basin 2014 Bid Round, which is now submitted for your ratification, enables the generation of needed revenue for the state and for NOACL, it sets a precedent for Liberian citizens to participate actively in the oil sector of the economy and amidst the challenging global oil market conditions.”