Oil In Liberia: How Could Liberians Settle for Only 5%?

Liberia has recently discovered oil in commercial quantities but has only 5% share

By Honourable Saka

“Bad leadership is Africa’s major problem”, -J.A Kuffuor, former president of Ghana.

The above problem as observed by the former president will NEVER change for as long as the African people do not understand why this problem exists and how the system can be defeated. Fortunately, everybody knows very well that the corruption which the West often accuse African leaders of, is the right environment that they need for their resource-control colonialism to thrive.

Liberian oil and the Looting of Africa

The looting of African oil has begun in Grand Style, this time not in Nigeria nor Ghana but right in Liberia, also located in the West African region. For a country which has remained one of Africa’s poorest for decades, many were those who heaved a deep sigh of relief when Liberia recently announced to have “discovered” oil in commercial quantities, joining her West African sisters: Ghana, Nigeria and some others.

Oil deposits in the West African coast has existed for decades

In my opinion, there is no “discovery” of oil anywhere in West Africa but the exploitation of the oil belt that runs along the coast of the entire region which the oil executives knew about for decades but did not care to build rigs till now as they tried to gain control over the unstable situations of the Middle East at that time.

Let the African people not be deceived, the oil scavengers are now looming over West Africa and if we are not careful to choose rightly between the Nigerian and Ghanaian models of exploitation, there will be no real benefit and this political bonanza could definitely be a curse for the Liberian people in the long run.

Obviously, like their Ghanaian neighbours, with the current stable political climate and the recent oil find, Liberians all over the world are gripped with the expected prosperity that the oil and gas exploration “will bring” to their country. Undoubtedly, if it is well managed, the opportunities that will accompany the exploitation of the black gold could transform the destiny of the entire country for generations to come. It is with this understanding which has consequently raised the hopes and aspirations of many in the country who look forward to seeing improvements in their living conditions from 2014 and beyond.

Unfortunately these aspirations may turn out to be a nightmare if the people do not rise up to the government to take some time and adequately scrutinize the said oil “agreement” and also set up a national platform for dialogue on the best way forward, so that together, there will be a dialogue to secure a reasonable percentage share (70% and above) for the people whose interest the government claim to serve.

According to a recent statement issued by the Nobel Peace Prize winner, President Ellen Johnson, the American Oil company, Exxon Mobil will own a whooping 80% of the oil shares discovered in Liberia, while their Canadian neighbours, the Canadian Oversea Petroleum Limited (COPL), will own 20%. Therefore many are wondering: where does this place the people of Liberia? What percentage share does the government of Liberia have in this oil deal? The African people would want to know.

Oil exploration commences with high hopes for economic transformation

Again, why the rush to explore the oil without first putting adequate measures in place to guard against the challenges that may accompany the oil exploration in the near future? Where is the government rushing to? Is President Ellen Johnson considering early retirement in the coming months? Has the government considered building local refineries to process the crude oil or Liberia will follow the Nigerian model where the raw crude is shipped to Europe after which the refined product is then shipped back to the country at ridiculous prices? Has the government considered training local engineers to take over the management of the oil industry within the shortest possible time? Why must African leaders always allow such sensitive sectors of their economy to be held hostage by a few foreign corporations?

Our major problem as Africans is that we lack leaders with adequate planning skills. Before we rush to commission most projects, we do not adequately take the time to plan against the unforeseeable challenges that may likely show up in the near future.

Is Liberia well-prepared to deal with corruption in the oil and gas sector? Is the government prepared to face the angry youth who are likely to take up arms as we see in Nigeria? In Nigeria, many agitated so-called rebel groups rose up and took arms to fight what they call “corruption in the oil and gas sector”, a situation which has currently gotten out of control. Will Liberia learn some lessons from Nigeria or as usual, the leadership will wait unprepared, for the problems to come up before they run back to their NATO saviours for solutions?

Although President Ellen Johnson has not said what would happen to the Liberian share, the President and CEO of the National Oil Company of Liberia (NOCAL), Dr. Randolph McClain, explained that the negotiating team of the Liberian government secured a 5% citizens participation share in LB-13 and a further 5% royalty on oil produced from wells drilled under water depths of 0–1500 meters.

Angered by the shocking news, Okechuku, a PhD student at Oxford University wondered:

“When Liberia was in crisis, did the US and Canada send any help? I’m shocked at how a country's wealth is being giving away for peanuts. Is this the reason why the president was awarded the Nobel Prize some months ago? Ellen Johnson has always been the World Bank’s darling girl anyway. You don’t get a Nobel Peace Award without signing such deals.”

This has always been my point. The man is absolutely right! Of course that is the price the people pay when our leaders are given such awards by US-funded NGOs such as Human Right Watch, and the so-called Nobel Peace Prize.

Remember Ellen Johnson was given the Noble Prize somewhere last year? Yeah, that was when the “actual oil deal” was sealed. I guess someone now has a clue as to why our leaders will always sign such unacceptable agreements. The selfishness of our leaders is the reason for our underdevelopment. Our people must rise up and say no to all those foreign funded NGOs who have been buying-off our leaders and our independence with their so-called awards. It's a shame. No nationalism, no patriotism of any kind. How can a country that has suffered over a decade of economic hardship, settle for some 10% ‘royalty’ in a multi-billion resource like oil?

Oil for Nobel Peace Award?

Is this all that our forefathers died for? Is this the hope and the dream the government sought to build when the people gave out their mandate? But more seriously, how much of this 10% will end up in the offshore accounts of many of these ‘negotiating team’? This still remains unclear.

Meanwhile at the moment, although early indications are positive, the exact extent of oil deposits found in the country still remains unknown. Leaders have already settled for a peanut from big oil corporations as they hand over the oil reserves to the western firms with virtually nothing left for the ordinary Liberian in the near future.

The Canadian Overseas Petroleum Limited (COPL) recently disclosed offering the politicians, a mere U$45m in cash toward the purchase of block 13 of Liberia's oil industry, a move which will see Liberia lose billions of dollars every year to the COPL. I wonder why these politicians will just sell the oil reserves for merely $45m when the actual oil deposit is yet unknown? How many of the poor Liberian families will benefit from the $45m given to the politicians?

Liberian politicians have been blinded by the mere $45millon they received as “signature fee”, forgetting about the long term financial loses, the environmental damage and all the hardships the country will endure while their foreign ‘donors’ bag a whopping 95% profit shares on a monthly basis! Oh Africa! When are we seriously going to plan for tomorrow? Why are African leaders so keen on the few millions today, while they ignore the billions which the big oil companies will be reaping in the coming years?

US-funded NGOs honours President Ellen Johnson as a leverage for more oil

This brings to mind my most worried concern: Why are such sensitive agreements always held in the corridors of secrecy when the destiny of entire generations depends on them? Why must the good people of Liberia allow only a few selfish, greedy and corrupt politicians to negotiate on their behalf in camera, without adequately conveying the detail content of such agreements to the public?

For a country like Liberia which had been plunged into civil war and suffered decades of economic hardship, seeing the need to put such oil agreements in the public domain, and discussing them in consultation with leaders of the regional block would have been a better decision.

But as usual, African leaders never consult their colleagues during such critical moments. Only a few millions into their offshore accounts and the agreement is sealed, living the poor masses to their fate.

Will Liberia Repeat Nigeria and Ghana’s Mistakes?

In Nigeria for instance, as western oil companies loot some $140 Billion a year of the country’s oil, two-thirds of the country’s 160 million people live on less than $2 a day. Western oil companies are literally looting Nigeria’s oil, paying as little as a 9% royalty. Simply put, at $100 a barrel the western oil companies get $91 and Nigeria only gets $9. Or more shockingly, Big Oil makes $140 billion a year vs. Nigeria’s $10 Billion, writes Thomas C. Mountain as he reveals the shocking reasons why many Nigerians remain the poorest in Africa despite the country having plenty of oil and gas.

Ghana's Oil Has Been Sold Off Already

Today in Ghana, when Tullow Oils makes a profit of $3 billion, Ghana gets only $3 million out of that. Can this agreement truly better the lives of Ghanaians? Yet, former president Kuffuor, the man who recently suggested that bad leadership is Africa’s problem, was the same president who signed Ghana's oil agreement handing over our oil to the foreign firms. This is what happens when foreign corporations are allowed to secretly finance our politicians for into power during election periods!

The time is right for the African parliaments to consider banning these traitors who call themselves politicians from receiving funds from abroad as a means to finance their political campaigns. I am calling on the African youth to rise up and rebel against such dangerous oil agreements which has given our black gold to the foreign companies for free. This is our destiny and we must not allow foreigners to steal it through these greedy politicians who care only about themselves and their families. If the oil were to be the personal property of the politicians, would they approve such unfair contracts?

Unfortunately, instead of the African media to critically examine the content of all those oil agreement, these journalists are only concerned about elections, always discussing the politicians as if there are no other issues worth discussing.

The Way Forward:

Legislations must be introduced to ban all politicians from sourcing for funds from abroad during elections periods. It is usually during such times such contract documents are signed.

The country’s planners should not neglect other sectors of the economy. They should try to deepen economic activities in other areas in order to diversify to avoid exogenous shocks due to volatility in the prices of oil on the international markets.

Privatization of state resources must cease with immediate effect. Governments cannot continue with the habit of selling off every strategic resource without adequate long term planning. African leaders must take the pain to invest in the training of more engineers to help build our industries so that we can manage the exploitation of our resources. The current attitude of putting everything in the hands of the Whiteman must stop. The Blackman must for once develop the habit of managing his own affairs.

Ladies and gentlemen, this is the beginning of a long walk to perpetual poverty and economic impoverishment in Liberia as Big Oil corporations begin to loot Liberian worth. For very $100billion of profits made by the oil corporations, Liberians will only get some few $100 million donations.

I miss Chavez, I miss Gadhafi. These leaders showed oil-rich Africans the way, but due to corruption and selfishness, our leaders will not follow their steps. This is the major reason why I hate African democracy. For it is during these election periods that our politicians sign many of such bogus contracts. Once they ‘win’ the elections, any bogus agreements presented to them by their foreign donors, they will approve it. It’s a big challenge.

It’s time for everyone to wake up and see how the ‘system’ now works in African politics. Certainly, neo-colonialism is the last stage of imperialism. Ghanaians have already settled for some 10% share in their most-talked about oil. Nigerians have quietly accepted 9% for more than 50yrs.

Liberians must never settle for 5%! Anything less than 70% must be rejected by the people. This is the only way we can fight poverty and say enough to the western corporations who continue to enrich themselves with African resources while the African people wallow in poverty. Its time we said enough is enough.

Honourable Saka

The writer is a Pan-African analyst and the founder of the Project Pan-Africa (PPA), an organization that was established to unlock the minds of the African youth to take Africa’s destiny into their hands. The PPA seeks to provide the biggest platform that will give international exposure to all hidden but exceptional talents in Africa. Please visit us at: www.projectpanafrica.org and support the project. PPA is grateful to ITech Plus, ZBC News GhanaWeb, ModernGhana and all our partners that support our vision for Africa. Email me at: honourablesaka@yahoo.co.uk