Liberia auctions oil blocks online due to Coronavirus outbreak

The Liberian Government is seeking interest from companies on participating in the offshore license round, which was open since April 10, 2020. But, due to the COVID-19 pandemic, the Government has decided to move the bidding rounds online in order to restrict coronavirus transmission.

Early this year, President Dr. George M. Weah announced the opening of the
entire Harper Basin. The President said that the Liberia Petroleum Regulatory Authority (LPRA), will open up the entire Harper Basin at the next Licensing Round and Nine (9) offshore blocks will be put up, allowing competent and reputable local, international oil and gas companies to bid with the hope of recommencing exploration programs, following years of inactivity.

In his words, President George Weah said: “The world is undergoing a tremendously turbulent time but with our resilience, tenacity and shared strength, we will defeat this deadly coronavirus. We cannot be discouraged and dismayed because of this scourge but must keep fostering the growth of our nations and business institutions. We will take all precautions and measures to mitigate the impact of the pandemic but must not stop or relinquish the desire to build a nation under a common purpose creating shared economic prosperity.

“It with this vision in mind that I officially declare the Liberia Offshore License Round 2020 officially open and formally launched. The round which was initially planned from April 10-October 1, 2020 will now open on April 10, 2020, and run-up to February 28, 2021. I have instructed the Liberia Petroleum Regulatory Authority (LPRA) that all initial engagement, promotional events, consultations, and business meetings relating to the Liberia Offshore License Round 2020 must be conducted online via the dedicated bid round website or other virtual platforms.

“Absolutely, there will be no physical meetings during the initial phases of the bid round until this deadly disease is defeated. This decision is similar to what is currently being adopted by sisterly countries conducting license rounds within Africa and around the world.

“Liberia has been, it is now, and continue to remain an attractive investment destination and we want to use this medium to demonstrate that the Government of Liberia provides a stable operating environment, predictable as well as flexible legal and fiscal regimes, and conducive operating environment for doing business.

“We encourage international upstream oil and gas companies and other private equity firms to participate in the license round. As I launch the Liberia Offshore License Round 2020, let me officially welcome you to explore our offshore assets, a system of governance, and the unparalleled hospitality of Liberians.”

Moreso, The Liberian Petroleum Regulatory Authority (LPRA) has set out plans to prequalify Liberian companies to take up 5% stakes in all petroleum agreements. The Petroleum Law has mandated 5% stakes be set aside for companies owned by Liberian citizens.

The equity stake could be carried or paid, the LPRA said, depending on the agreement reached between the various bidding companies. A list of pre-qualified Liberian companies will be made available to qualified international bidders in order to encourage partnerships.

Pre-qualification criteria for local companies are not similar to the criteria for international companies, the LPRA said. Applications for local companies opened on March 17 and will close on April 30. Results will be provided within two weeks of closing the application process.

Liberian companies are required to apply singly with a payment of $5,000. Beneficial owners must be disclosed, as must be financial records for the last two years. Companies are also asked to provide details of how they would fund financial obligations.

However, in response to the spread of coronavirus, the LPRA said it had opted to move the launch to a webinar, with an “exclusive list of delegates” and including speeches from Liberian President George Weah.

The country has 33 blocks in the offshore, with 24 blocks in the Liberia Basin and nine in the Harper Basin. The licence round will be focused on the nine blocks of the Harper Basin, Weah said in his state of the nation address in January.

Nine blocks will be on offer in the Harper Basin, one of the last unexplored and undrilled regions offshore West Africa: LB-25, LB-26, LB-27, LB-28, LB-29, LB-30, LB-31, LB-32, LB- 33.

The new block demarcation is following the petroleum bill update in 2019, with a maximum block size of 3,500 square kilometers, and aligning with the longitude and latitude grid.

TGS holds a range of multi-client data across the tendered acreage to support the licensing round: 5,961 kilometers of 2D seismic, gravity and magnetic data 6,167 square kilometers of 3D seismic, gravity and magnetic data.

The Harper Basin offers significant exploration potential in one of the few remaining unexplored deep-water basins in West Africa. The initial interpretation of 2D and 3D seismic data identifies many leads and prospects across the entire basin. Several sub-commercial discoveries from previous wildcat wells in the Liberia Basin have proven that the petroleum systems are working offshore Liberia.

Recent discoveries offshore Cote d’Ivoire prove source maturity, the viability of the reservoir quality, and charge potential of commercial size. The Albian reservoir offshore Cote d’Ivoire, for example, is producing and considered a good analogue for the maturation story and identified traps in the Harper Basin.

The LPRA’s director-general Archie Donmo is due to present the Harper Basin round at the Africa E&P Summit, in London on May 20-21. Managing petroleum exploration, development, data, local content, and production activities on behalf of the country.