Government vows transparency in new oil exploration deals

Liberia's transitional government has signed offshore exploration agreements with three little-known oil companies, just three months before elections to return the war-scarred West African country to democracy. Musa Dean, the head of the state-run National Oil Company of Liberia (NOCAL), announced the three deals on Thursday as the international community considered hard-hitting proposals to limit the government’s economic powers in order to crack down on rampant corruption. The proposed measures include the creation of an international authority, to be called the Economic Governance Steering Committee, which would have the power to veto suspect government contracts. Liberia came under fire earlier this year for secretly signing an agreement that would allow an obscure London-based company called WAMCO to buy and market most of the country's diamonds, which are still subject to a UN export embargo. The government was eventually forced to cancel the deal after it caused international uproar. But Dean insisted that the oil exploration agreements just signed were legal and above board and would bear international scrutiny. “There should be a high level of transparency in all investment agreements this government has entered into [including]…. how the resources from these investments will be used for the interests of the people,” he said. The offshore exploration agreements award acreage to Oranto Petroleum Limited of Nigeria, Broadway Consolidated of the United States, and a consortium comprising Regal Liberia and European Hydrocarbons. Dean said the latter comprised a group of Liberian and European entrepreneurs. Only one of these companies, Oranto Petroleum, has an established track record as an oil producer, but Dean said all of them would start exploration drilling shortly. "The contracts commit those three companies to a very rigourous work programme," he said, declining to say how much they would invest in offshore exploration. "Liberia has strong potential for oil and we expect oil rigs out about three months from now after the legislature shall have ratified the agreement," he added. Western diplomats in the capital Monrovia expressed concern over the deals. “The government is fighting allegations of graft,” said one. “It needs to make the details of the agreement public”. In July 2004 Repsol was granted an initial permit to carry out oil exploration off the coast of Liberia, but the Spanish oil giant still consulting with share holders whether to invest in the country, which has just emerged from 14 years of civil war. Repsol said then that if it did start oil exploration in offshore waters near the Sierra Leone border, it would invest between US $10 million and US $15 million in Liberia over a four year period. Before the civil war began in 1989, Liberia exported iron-ore, rubber, timber, and diamonds - but rubber is the country's only legal foreign exchange earner these days. Fighting forced iron-ore mines to close long ago and the United Nations has so far refused to lift sanctions on diamond and timber exports - imposed between 2001 and 2003 to stop the president Charles Taylor from raising funds to buy arms. It says the transitional government is not yet strong enough to exercise effective control over these industries.