By Alaskai Moore Johnson, alaskaijohnson@gmail.com (+231) (0) 777-889-870 / (+231) (0) 886-631-025
IPNEWS – Monrovia: If Liberians don’t rise up to demand that they get back their share from proceeds that would be generated from Liberia’s oil resource, they will be rubbed off their five percent share which was placed in Section 36 of the 2014 Petroleum Law of Liberia.
This share, which is a mandatory 5% equity, in every petroleum contract the government signs, was placed in the law by members of the 53rd Legislature, some of whom are still in the present 54th Legislature. But the same lawmakers and the new ones who joined them after the Presidential and General Elections of 2017, conspired to steal from the Liberian people their entitlement (share) that would be generated when Liberia finds and begins to produce and sell oil.
What Is the 5%?
When the law was passed during the regime of former President Ellen Johnson Sirleaf, lawmakers agreed that Liberians from all walks of life should benefit from at least a 5% share in all oil contracts for the “benefit of a Citizens’ Fund.” This means any profit each of the oil companies in Liberia makes, 5% share of that profit will be for ALL Liberians and that money will go into the “Citizens’ Fund” for ALL Liberians and not in the government account or to any business.
How Much Is This 5% Going to Amount To? Coalition for the Restoration of Liberians 5% Equity (CORLE), is an advocacy group that is now in the vanguard demanding that the administration of President George Weah restores what it “stole” from the people.
Ambulah Abutumaga Mamey, who heads CORLE, told this newspaper that his estimate shows that the dividend to be generated from the 5% equity in just nine of Liberia’s 33 oil blocks that the government initially planned to give out to international oil companies, is about US$1.9 billion. “This is the total estimated amount Liberians will have entering into their ‘Citizens’ Fund’
for the period oil production will last after discovery. However, If Liberians do not stand up for their rights and pressure the government to reverse the law to what it was: “5% for the benefit of Citizens’ Fund’, and include all the other sections (36.2, – 36.7) regarding the Citizens’ Fund that were deleted from the law, this is the estimated amount of money that the nine businessmen the government has selected, and their allies in the government will be making in the future while they are no longer in government.
Mamey said, CORLE’s estimates are based on the estimate of hydrocarbon in the nine blocks, the cost of producing 1 billion barrels of oil, and the price of a barrel of oil at the time of COREL’s estimate.
TGS NOPEC, the company that does all the oil data estimation for Liberia, says the Harper Basin in which the nine blocks are situated, has a high potential for oil discovery and further estimates that Liberia could find at least one billion barrels of oil in the Harper Basin. Regarding the cost of exploring, developing, and producing the estimated one billion barrels, CORLE’s estimate is based on the cost of production data, which shows that the cost to check for and produce one billion barrels is approximately US$25.4 billion. Under the projection that one billion barrels of oil is produced at a cost of 25.4 billion and sold at US$64.00 per barrel or 64 billion, the estimated profit will be US$38.55 billion and five percent of this US$38.55 billion is US$1.9 billion. Mamey explained that because the price of oil goes up and down and the cost of production also goes up and down, the estimated 1.9 billion as dividend for the 5% could be more or less.
He also explained that the 1.9 billion is not a one time deposit, but payments that would be coming in little by little (like every year or every quarter once oil is being produced and sold) into the ‘Citizens’ Fund’ for the many many years that Liberia will be producing oil.
Even though the law was passed during Madam Sirleaf’s administration, it was never touched. The petroleum law that set aside the 5% for Citizens’ Fund was passed in 2016. Since the law was passed, it became functional under Pres. Weah’s administration as Madam Sirleaf’s administration came to an end in 2017.
Mamey argues that “But because Weah, Chie, McGill, Tweah, and others wanted that 5% for themselves and the law could not allow that, that is why they changed the law in September 2019 without anybody knowing.”
What happened?
The Weah Administration took from Liberians their 5% rights and profit in ALL oil concessions and gave that right to nine businessmen connected to political elites in Liberia. The first thing they did was, on September 26, 2019, they worked with lawmakers and secretly deleted from Section 36 of the 2016 Oil Law the clause that gives “5% share for the BENEFITS of a CITIZENS’ FUND and replaced that clause with a clause that now reads “5% share for companies owned by Liberians.”
On April 19, 2021, CORLE, which comprises eight civil society and student groups, wrote Pres. Weah reminding him that on October 9, 2019, he approved an amendment to Liberia’s 2014 petroleum law titled: “An Act to Amend Certain Provisions of the New Petroleum (Exploration and Production) Reform Law of Liberia 2014.”
“Among other detrimental changes, the amendment specifically, Section 36, took from ALL Liberians a 5% citizens’ equity right – whose expected dividend was required to be deposited into a Citizens’ Fund for the benefit of every Liberian. The amendment
subsequently transferred the right to the 5% equity to only Liberians with oil & gas related businesses and deleted all the following explicit provisions regarding Citizens’ Fund: The provision on who has the authority to and how the 5% equity for the Citizens Fund would be requested (36.2), the provision that requires 5% equity to be a carried equity since Liberia may not have resources to invest on behalf of Liberians (36.3), the provision regarding the management of the Citizens’ Fund, (36.5 & 36.6), and the provision on a timeline for the passage of an act to implement the Citizens’ Participation Fund (36.7).
“Mr. President, prior to your approval of the amendment, Section 36 of the petroleum law mandated a 5% equity in every petroleum agreement for the benefit of a Citizens’ Fund and required profit from said equity be deposited into a Citizens’ Fund for the benefit of ALL Liberians. The law further required an international trust company to manage the fund and for money in the fund to flow to every Liberian- especially the most vulnerable- via a mechanism that would be agreed in a citizens participation fund law.”
CORLE had urged the President to suspend Liberia’s Offshore License Round 2020, and initiate work with the legislature to reverse all the changes made to section 36 of the 2014 petroleum law, and later proceed with the 2020 License Round.
“These actions will ensure the benefits from Liberia’s oil sector flow to ALL Liberians and prevent the disastrous consequences of concentrating oil wealth in the hands of a few wealthy and politically connected Liberians,” Mamey said.
Mamey informed IPNEWS that neither the President’s Office nor stakeholders in the sector replied directly to their communication but opted to use intermediaries.
9 Companies Now Having Liberian’s 5%
When the law was amended, the oil blocks, off Liberia’s shores in the Harper basin, were given to nine Liberian-owned companies, some of whom were established just about the same time the law was passed, according to Mamey. He further stated that CORLE isn’t against Liberian businesses. However, he argues, “We support Liberian businesses. We even support wealthy Liberian individuals taking shares in oil companies to increase their wealth. However, we do not support the government’s decision to take the 5% share from poor Liberians that need it most and give it to a few businesses. Do you think every Liberian will benefit when the nine businessmen make billions of dollars from the 5% share? For us, we don’t think so, and here are two reasons why? Benoni Urey and Emmanuel Shaw have legal shares in Lone Star Cell. How is the profit from their share benefiting you and other poor Liberians? In 2007, Jonathan Mason, Adolph Lawrence (RIP) and Cllr. David A.B. Jallah (RIP), etc. took legal share in oil Block-13 under the theory that the money they will generate will benefit Liberians through businesses. In 2013/2014, these Liberians sold their share in Block-13 to ExxonMobil through Peppercoast and made US$68 million (here is a link to prove this). How did the millions they made from their share benefit you and other poor Liberians? It is based on these examples that Liberians decided during the oil consultation that the law protects the 5% for a ‘Citizens’ Fund’ and not for businesses.
The nine companies the government has already selected include New Millennium Oil and Gas, CEO, Mr. MacDonald Wento; MAC-Africa Petroleum Inc, CEO, Walter S. McCarthy; Jungle Energy Power Inc, CEO, Tomah Seh Floyd; Green Petroleum (Liberia) Limited, CEO, Sidikie M. Bility; Africa Oil and Gas Inc, Managing Partner, S. Eric Allison; TSC Global Inc., CEO, Mr. Amara S. Sackor; DEMUS Exploration & Product, CEO, Michael B. Johnson; Aminata Oil and Gas, CEO, Emmanuel Togba and Kardnal Group of Companies, Managing Partner, Jeucontee Berry.
Senator Dillon
Meanwhile, Montserrado County Senator Abraham Darius Dillon has joined CORLE’s cause to make sure that the 5% Equity Right of Liberians is restored in the law.
CORLE said they met with the Senator following his invitation and request for information/evidence regarding CORLE’s concern over a 5% Citizens Equity Participation in petroleum contracts which was replaced with 5% equity for only Liberians with “Oil & Gas” Companies.
“Grounded in the understanding of the law, Senator Dillon reviewed CORLE’s argument and agreed that the 5% equity must be explicitly shown in the law to benefit ALL Liberians and not only Liberians with oil & gas businesses. Senator Dillon has promised to look extensively at the situation and proceed with appropriate actions in the Liberian Senate to ensure every Liberian benefits from the 5% equity as they requested during the 2014 oil consultation and was written in the original 2014 Petroleum (E&P) Law.”
