AFRICA OIL & GAS TODAY

Hopeful President Ellen Johnson Sirleaf of Liberia

Liberia hopes to join the Joneses if crude oil is discovered in its offshore region.

Liberia is soon to join a growing number of African countries which are discovering oil in their offshore region. The former war-torn country holds promising acreage in a region that has yielded rich new oil deposits. It has already signed an agreement with American oil major, Chevron to explore potential offshore reserves in its offshore area. Chevron with 70 percent interest in the concessions is to serve as lead partner in the former American colony. Chevron's exploration, worth $10 billion potentially, is for three years and involves three deep-water concessions.

This is not Chevron's first entry into Liberia; it once explored for oil in the late 1960s with two other companies.

Liberia is clearly overjoyed by Chevron's interest. The country, with a population of 3.4 million depends mainly on exports of rubber and timber for revenue. Oil export, would no doubt, enhance the country's earnings. President Ellen Johnson Sirleaf, in a statement said. "Energy is one of my top priorities, and with Chevron's technical skills we will be able to build our own capacity in the sector making a meaningful contribution to economic growth and job creation. We are delighted to welcome Chevron as a partner for Liberia to explore our oil and gas assets," said Sirleaf who has pledge to use Liberia's natural resources for growth and development.

Although the deal has been approved by the executive, it still has to go to the legislature for consideration and approval. Under Liberian law, the legislature is required to examine and then ratify any agreement before it can come into effect. Sirleaf's comment that the deal "is a crucial partnership for Liberia" is seen as a direct appeal to the country's legislative branch to act promptly so exploration can begin in earnest. If approved more jobs will surely be created and development of other sectors of the Liberian economy will be achieved.

It is easy for Chevron to enter Liberia. The United State supports Liberia's quest for economic growth. During a recent visit to the U.S, President Sirleaf met with top Chevron executives in a bid to encourage the company to come into Liberia. Chevron's entry into the country is expected to be "a further vote of confidence in the country's future," some say.

Chevron joins other top international companies including American companies like Anadarko Petroleum and Firestone and others like ArcelorMittal, BHP Billiton, China Union and Golden Veroleum, an Indonesian firm which recently secured a $1.6 billion palm oil deal, operating in the country. Direct air service by the American airline, Delta, has also been launched between Atlanta and Monrovia.

Before this Chevron deal, exploration in Liberia was done by U.S.-based independent producer Anadarko and UK-based Oranto. Both have interests in several west African countries. Seismic data produced by Oranto from two offshore blocks showed prospects for sufficient undersea petroleum reserves to interest one of the world's biggest oil companies.

Liberia sits at the western edge of the Gulf of Guinea, which extends along the coast to Nigeria. The Gulf is reported to have reserves in excess of 40 billion barrels. Also neighbouring countries including Cote d'Ivoire, Sierra Leone and Ghana have oil prospects. In the case of Ghana, oil production has already begun.

Advances in exploration and production techniques have opened the way for expanded oil and gas production across the continent. West Africa, however, remains the beehive of exploration activities partly because of the Gulf of Guinea with billions of barrels in reserves. According to a U.S. Geologic Survey Fact Sheet issued in February, there have been more than 275 new fields discovered in west Africa since 2000.

Chevron currently has major operations in Africa's two largest oil producing nations, Nigeria and Angola, and also is engaged in exploration and production in Chad, the Democratic Republic of Congo and the Republic of Congo.

Exploration in Liberia started in the late 1960s with Frontier, Chevron and Union Carbide. Before exploration was interrupted early in the 1970s, four wells were drilled and abandoned as dry. After several attempts to find oil by various companies, exploration ceased totally in 1986 due to worsening security issues.

Liberia is considered one of the poorest countries in the world. The discovery of oil would greatly boost the largely agrarian nation and propel it into the ranks of emerging African oil producers. Chevron's entry will result in employment opportunities for the country devastated by war. Says Sirleaf: "The creation of jobs and the revenue of possible oil finds will transform the economy through infrastructure development."