LPRA Clarifies Petroleum Licensing Authority Amid Questions Over NOCAL Role

Monrovia — The Liberia Petroleum Regulatory Authority (LPRA) has moved to clarify Liberia’s petroleum licensing framework following growing questions from oil companies and stakeholders regarding the role of the National Oil Company of Liberia (NOCAL) in upstream petroleum operations.  

In a statement issued Wednesday, the LPRA reaffirmed that under the Petroleum (Exploration and Production) Act of 2014, as amended, the Authority remains the legally mandated institution responsible for administering petroleum rights, negotiating agreements, and overseeing licensing processes in Liberia’s oil and gas sector.

According to the regulator, Section 4.1 of the Petroleum Act stipulates that the right to explore for, produce, and transport petroleum can only be acquired through petroleum rights granted in accordance with the law and applicable regulations.

The LPRA further pointed to Section 7.2 of the Act, which establishes the Authority for the purpose of administering the petroleum law, while Section 8.1(c) empowers it to enter into petroleum agreements and other legal instruments necessary to grant petroleum rights.

The Authority emphasized that reconnaissance licenses may only be issued to entities meeting the requirements outlined in Section 11 of the law and clarified that possession of such a license does not automatically entitle a company to a petroleum agreement.

It also stressed that petroleum agreements become valid only after being signed by both the Director General of the LPRA and the Minister of Finance and Development Planning.

Addressing concerns surrounding the 2019 amendment to the Petroleum Act, the LPRA explained that Section 14.1(c) introduced additional pathways for awarding petroleum agreements, including competitive bidding, direct negotiations, and executive allocation of petroleum blocks to NOCAL.

The regulator noted that several international oil companies had sought clarification regarding the interpretation and implementation of the executive allocation provision.

However, the LPRA maintained that the amendment did not alter its statutory authority over petroleum licensing and negotiations.

“Section 14.1(c) recognized that it is the Authority which shall grant petroleum rights to NOCAL,” the statement said, adding that the LPRA remains solely responsible for granting petroleum rights through reconnaissance licenses and petroleum agreements.

Under the amended framework, the President may allocate a petroleum block to NOCAL, which can then partner with prequalified investors to negotiate agreements with the LPRA for exploration and production rights.

The Authority stressed that all negotiations involving NOCAL and potential investors must still be conducted by the LPRA, with the approval of the Ministry of Finance and Development Planning, to ensure that Liberia’s economic interests are protected.

“The State’s economic interest in a petroleum agreement may not be limited by terms that are not negotiated and approved in accordance with the process required by the Petroleum Act,” the statement added.

The LPRA described itself as Liberia’s independent petroleum regulator responsible for overseeing petroleum exploration, development, and production activities, while coordinating petroleum agreement negotiations on behalf of the Government of Liberia alongside the Ministry of Finance and Development Planning and the Ministry of Justice.

المصدر: FrontPage Africa (Liberia)