17 September 2014, Monrovia – A new Liberian bid round for four offshore oil blocs is courting investment from ECOWAS companies, using an incentive that target regional upstream operators that is the first of its kind in a bid round.
The ‘Local Content Participation’ provisions included in the design of the bid round will give preference to bidding groups with ECOWAS companies that partner with a Liberian company.
The bid round, run by NOCAL (National Oil Company of Liberia), opened in August and closes on November 14th. It re-opens four undrilled blocs for competitive bidding: LB-7, LB-7, LB-16 and LB-17 and is being organized with Ernst & Young (EY).
Bidders are being asked to bid on an upfront payment (“signature bonus”) to be paid to Liberia within a set number of days after their contract becomes effective.
But under the Local Content Participation provision, bids from groups that include either: a) a significant West African/ECOWAS upstream petroleum company that has committed to partner with a Liberian company, or b) a direct partnership with a Liberian company for a total of a 5 percent interest in the PSC by the Liberian company, will be considered to have 20 percent boost to their signature bonus amount.
NOCAL hopes that the ‘Local Content Participation’ provision will lead to meaningful Liberian participation in the upstream and downstream petroleum upstream businesses, as well as providing opportunities to regional players and helping develop the ECOWAS upstream sector.
Councilor Althea Sherman, NOCAL Chief Operating Officer, who is coordinating the round, said:
“We want a vibrant Liberian industry and jobs, but also a vibrant West African upstream sector. This provision will help do both. It will enable Liberian companies to develop capacity and take full advantage of the petroleum value chain, and give opportunities for regional companies to participate.
Liberia’s domestic industry is undeveloped and requires mentoring. We think that ECOWAS partners who understand the region and have successfully developed capability from a low starting point themselves are best placed to do that.”
NOCAL will hold a roadshow on 23rd September in Lagos, Africa’s oil capital, to present seismic data and details of the contracts on offer to ECOWAS companies.