Preparing a generation to manage Liberia's oil sector

By Urias Goll

Liberia’s quest to explore for hydrocarbon (petroleum) offshore its territorial waters dates back to the late sixties. Some believe the government’s decision for exploration activities was made in 1940s. Creating a long-term approach for capacity development has been on the fringe of decision-making. As usual, the government and decision-makers wanted to prove the existence of hydrocarbon before mapping out a capacity-building programme. This skewed approach has been grossly responsible for the human development lapses the country has experienced over the years. Sadly, some state actors are still keen on following this parochial method of national growth. Questions like “why spend money to train individuals who the country might not need if we don’t find this resource?” are generally heard concerning capacity building for a new field/sector.

Globally, the establishment of training and development of citizens for new sectors is a top priority. Some states even roll out a robust training programme for their citizens before they make decisions about exploring new sectors. This provides these countries with the needed capacities and capabilities. Paying expatriates (who will definitely be needed at the start) can cause a massive blow to the revenue-generation ability of the country and its citizens. Therefore, as a more salient approach, preparing a country’s own citizens is the best option.

There are three reasons for building in-country capacity within the oil and gas sector, and to a large extent, for other sectors as well. First, it allows the country to gain economic boons and build a middle class faster. The “trickle-down effect” of having a higher number of locals trained and working in the sector can add significant value to the local economy. Second, having locals skilled in oil and gas projects brings more social value to the operations and helps build extensive trust with the local community. The fact that local community dwellers acknowledge that workers on oil and gas installations are “sons and daughters of the soil” reduces mistrust and the widely held notion that the foreigners are coming to rip them off of their inheritance. Finally, building local capacity strengthens national competence and improves sustainability, thereby allowing for the possibility of continuous future explorations and production activities.

A glimpse at capacity development strategy
After many attempts to find oil proofed futile, Norway hit the elusive black gold following a brave and brilliant interpretation of an Iraqi born geologist Farouk al-Kasim. Al-Kasim was later appointed by the Norwegian government to develop a blueprint for managing the oil and gas sector. Al-Kasim’s blue print allowed the Norwegians to rely more on national competence and less on borrowed capabilities. Norway trained its citizens and is being considered today as one of the gold stars in the industry. Norway’s state oil company, StatoilHydro, is internationally recognised as a competitive commercial player with savings funds from petroleum operation totalling over US$384 billion.

Adding to my point, Brazil is thought to have the 15 largest proven reserves of oil globally. The country has established over 401 federally financed vocational, technical and higher learning institutions. Annual budget for vocational institutes alone, over the last eight years, jumped from $385 million in 2011 to a staggering $3.8 billion in 2012 to match the increasing demand by the oil boom. In December 2003, the government of Brazil showed its commitment to local content development by creating the Program for the Mobilisation of National Oil and Natural Gas industry whose objective is to “maximise the national good and service industry’s participation, on a competitive and sustainable basis: in deploying oil and gas projects in Brazil and abroad”.

Talking to a colleague at the Ghana National Petroleum Corporation in 2011, I learned that the government of Ghana has designed a strategy to train over 3 500 Ghanaians with specialisations directly relating to petroleum operations. My next question was whether the industry will be able to absorb and afford these Ghanaians in the interim. He responded, “if Ghana’s petroleum industry does not absorb immediately, working abroad still benefits the local economy through remittance”. My colleague’s statement shows a true and lasting commitment for sustaining the industry and establishing a firm grip over the oil resources.

Promise for a better tomorrow
Liberia has only announced a “significant oil discovery” and hopes have run high anticipating the millions, if not billions, of dollars which the country could generate. However, it is possible that Liberia’s new find may not be big enough to encourage development and subsequent production of the field. In such case, the country benefits nothing. Notwithstanding, as in the case of Ghana, building the capacity of young Liberians for the oil and gas industry provides a win-win outcome. In a worst-case scenario (with no or less commercial oil find), the trained Liberians can still find attractive jobs in neighbouring or western countries, and they can still contribute to the local economy.

The National Oil Company of Liberia (NOCAL) has gradually begun to capture this concept and has established a scholarship committee, which spearheads the company’s local and international scholarship scheme. Under this scheme, the company has been able to sponsor over 50 students in various universities around the country. As the Chinese say, a journey of a thousand miles begins with a single step. That step has already been taken by NOCAL and it can only be anticipated that the government will continue its training programme.

Urias Goll is an environmental economist working for NOCAL. He is a One Young World Ambassador and currently serving a career development assignment with Chevron Energy Technology Company in Houston, US.