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As the Liberian Legislature forges to ensure the viability of ensuing contract between oil company and the Liberian Government, a joint committee organized by the Liberian senate, mainly the committee on Lands mines Energy Mineral resources environment and Judiciary on June 14,2012 submitted a report to the plenary of the Liberian Senate with six counts recommendations.

On May 10, 2012 the Senate Joint committee on Lands mines Energy Mineral resources environment and Judiciary was mandated by the Senate Plenary to do a follow-up on the oil and gas sector and report to the full plenary of the Senate. The committee recommendations will now give the Senate a direction to debate the oil and gas sector. Predicated upon this mandate, the Senate Joint Committee submitted to the Senate plenary its report for advice and recommendations.

The recommendations amongst other things call on the Government of Liberia to enact a Local Content Law that will allow for the participation of Liberians in the supply of goods and services for Oil Companies.

The committee also recommended that there should be a review of all Production Sharing Contracts (PS-Cs) ratified by the National Legislature taking into account Liberian equity and Government equity, etc.

At the same time the committee recommended that the Legislature conducts a comprehensive review of the rationale behind the cancellation of the Third (3rd ) Petroleum Offshore Bid Round,which was cancelled by the National Oil Company of Liberia (NOCAL).

Another recommendations called on the Government of Liberia to takes into consideration all environmental and health issues in the management of the oil and gas sector in the reform exercise and there should be a program that will provide for Human Resource Capacity Building for the Oil Sector in Liberia on a geographic basis.

The Joint committee report said having understood that such policy is currently being prepared at the National Oil Company of Liberia (NOCAL) by all stakeholders under the auspices of the National Petroleum Technical Committee, including the Ministry of Lands, Mines, and Energy; the Ministry of State for Presidential Affairs, the Ministry of Justice, the National Investment Commission; the Ministry of Labor; the Ministry of Finance, the Ministry of Planning & Economic Affairs,

Meanwhile the Chairman of the Council of Economic Advisors to the President of Liberia and NOCAL President or his designee has reached a conclusion that there must be a formulation of a National Petroleum policy that will take into consideration that the Government of Liberia must establish a Revenue Management Act to deal with the management of future petroleum revenue,must establish an Income Tax Law,revenue generated from the oil and gas sector must go to a central collectorate and managed by central government and must not just be handled by a committee or a board of few persons,the National Legislature should establish a company that will hold Government's 20% equity in each oil bloc (the Operator),Reform the law making NOCAL as the Regulator instead of as an Operator,Land issues must be considered highly, especially for onshore petroleum exploration and There must be public hearings on the Oil and Gas sector particularly considering the Financial and Revenue Aspect, the Technical Aspect, the Legal Aspect and the Commercial Aspect.

The comprehensive reports of the Senate joint committee also states that the draft policy of the Oil and Gas Sector must have the participation and input of civil society groupings such as the National Bar Association, the Justice and Peace Commission, the Chamber of Commerce, amongst others, as matter of urgency, the Senate must invite experts to review the Act that created NOCAL, and the New Petroleum Law of Liberia (2002) and all ratified Production Sharing Contracts (PSCs) to ensure compliance with the Petroleum Law 2002,

It also mentioned that a reform should be considered referring policy making functions to the Ministry of Lands Mines, and Energy, Reform should consider creating a Trust Oil Liberia Limited that holds Liberian citizens equity interest in each Oil Block,Policies formulated will encompass reforming the petroleum sector such as institutional arrangement to separate (a) Policy Oversight (b) Regulatory Oversight and © Commercial/Operational Oversight,increase shares allotted to Liberian citizens,and that NOCAL works along with the Senate Joint Committee on Lands and Mines and Judiciary to ensure better understanding and avoid usurpation of functions.

Additionally, the Report noted that the committee observed that due diligence was not done before finalizing all existing petroleum contracts,that NOCAL is performing conflicting functions to the extent that where she is to defend there she is prosecuting, and the Senate Joint Committee on Lands, Mines, Energy, Mineral Resources, Environment and Judiciary hereby recommends that That the draft National Petroleum Policy should have the input of citizens around the country before being finalized by the Cabinet Engage the services of knowledgeable people or institutions to conduct workshop for members of the Liberian Senate in order to enable the Senate have an informed min on the Oil and Gas Sector to be able to adequately respond to the reform process,that the Legislature should separate the responsibilities of NOCAL to avoid it performing conflicting functions,that petroleum policy should be consistent with petroleum law, review cancellation of the Third Offshore Petroleum Bid Round and review all ratified Production Sharing Contracts (PSCs)to reflect adherence to provisions of the New Petroleum Law of Liberia (2002). Please see below the recommendations of the joint committee.

By: Jerome Toe

_______________________________________________________________________________________________________________________
June 16, 2012

RECOMMENDATIONS OF THE SENATE JOINT COMMITTEE ON LANDS, MINES, ENERGY,MINERAL RESOURCES, THE ENVIRONMENT AND JUDICIARY TO THE SENATE PLENARY.

HERE ARE THE RECOMMENDATIONS:

I.That the Government of Liberia devises a Local Content Law that will allow for the participation of Liberians in the supply of goods and services for Oil Companies

II.That there be a review of all Production Sharing Contracts (PSCs) ratified by the National Legislature to take into account Liberian equity, Government equity, etc.

III.That the Legislature conducts a comprehensive review of the rationale behind the cancellation of the Third (3rd ) Petroleum Offshore Bid Round, cancelled by the National Oil Company of Liberia (NOCAL)

IV.That the Government of Liberia takes into consideration all environmental and health issues in the management of the oil and gas sector in the reform exercise.

V.That there be a program that will provide for Human Resource Capacity Building for the Oil Sector in Liberia on a geographic basis.

Having understood that such policy is currently being prepared at the National Oil Company of Liberia (NOCAL) by all stakeholders under the auspices of the National Petroleum Technical Committee, including the Ministry of Lands, Mines, and Energy; the Ministry of State for Presidential Affairs, the Ministry of Justice, the National Investment Commission; the Ministry of Labor; the Ministry of Finance, the Ministry of Planning & Economic Affairs, the Chairman of the Council of Economic Advisors to the President of Liberia and NOCAL President or his designee as chair these points were reached:

VI. There must be a formulation of a National Petroleum policy that will take into consideration the below fundamental counts and others that may follow:

1.The Government of Liberia must establish a Revenue Management Act to deal with the management of future petroleum revenue.

2.The Government of Liberia must establish an Income Tax Law

3.Revenue generated from the oil and gas sector must go to a central collectorate and managed by central government and must not just be handled by a committee or a board of few persons.

4.The National Legislature should establish a company that will hold Government's 20% equity in each oil bloc (the Operator).

5.Reform the law making NOCAL as the Regulator instead of as an Operator.

6.Land issues must be considered highly, especially for onshore petroleum exploration.

7.There must be public hearings on the Oil and Gas sector particularly considering the Financial and Revenue Aspect, the Technical Aspect, the Legal Aspect and the Commercial Aspect.

8.The draft policy of the Oil and Gas Sector must have the participation and input of civil society groupings such as the National Bar Association, the Justice and Peace Commission, the Chamber of Commerce, amongst others.

9.As matter of urgency, the Senate must invite experts to review the Act that created NOCAL, and the New Petroleum Law of Liberia (2002) and all ratified Production Sharing Contracts (PSCs) to ensure compliance with the Petroleum Law 2002.

10.Reform should consider referring policy making functions to the Ministry of Lands Mines, and Energy.

11.Reform should consider creating a Trust Oil Liberia Limited that holds Liberian citizens equity interest in each Oil Block.

12.Policies formulated will encompass reforming the petroleum sector such as institutional arrangement to separate (a) Policy Oversight (b) Regulatory Oversight and © Commercial/Operational Oversight.

13.Increase shares allotted to Liberian citizens.

14.That NOCAL works along with the Senate Joint Committee on Lands and Mines and Judiciary to ensure better understanding and avoid usurpation of functions.

Additionally, the Report noted that the following was observed during the Joint Committee deliberations:

a. That due diligence was not done before finalizing all existing petroleum contracts.
b. That NOCAL is performing conflicting functions to the extent that where she is to defend there she is prosecuting.

Finally, the Senate Joint Committee on Lands, Mines, Energy, Mineral Resources, Environment and Judiciary recommends the following:

1.That the draft National Petroleum Policy should have the input of citizens around the country before being finalized by the Cabinet
2.Engage the services of knowledgeable people or institutions to conduct workshop for members of the Liberian Senate in order to enable the Senate have an informed min on the Oil and Gas Sector to be able to adequately respond to the reform process.
3.That the Legislature should separate the responsibilities of NOCAL to avoid it performing conflicting functions.
4.That petroleum policy should be consistent with petroleum law.
5.Review cancellation of the Third Offshore Petroleum Bid Round.
6.Review all ratified Production Sharing Contracts (PSCs)to reflect adherence to provisions of the New Petroleum Law of Liberia (2002).