Liberia isn’t expected to produce its first oil until five to seven years from now, so the country is concentrating on exploration efforts for its existing 17 offshore blocks and carrying out oil and gas sector reforms.

The National Oil Company of Liberia (NOCAL) says it is coordinating “a vigorous oil governance reform program” for the maximum social and economic benefits of Liberians and to avoid the resource curse.

Israel Akinsanya, vice president of public affairs for NOCAL, said the reform process has three main steps: draft and adopt a new policy creating principles and guidelines for E&P activities; draft and enact a new petroleum law, guided by the new policy, to cover E&P; and create a new model production-sharing contract (PSC) that reflects the new law.

Akinsanya admits that Liberia today does not have the equipment, money, or expertise for exploration or to build wells.

“Every exploratory well costs over $100 million to drill, and there is usually a high chance of failure to hit oil. Compare that with Liberia’s national budget of $400 million,” Akinsanya said at a media briefing. “Exploration also takes great expertise, so a partnership with private sector companies makes more sense so that the IOCs bring in expertise and take on all the financial risk.”

Private partnerships began in April 2013 when Liberia signed a PSC with ExxonMobil to develop offshore Block 13 (LB13). The contract gives ExxonMobil an 80% interest in the offshore block and Canadian Overseas Petroleum (COPL) a 20% interest.

The new PSC, which replaces the previous contract for Block 13, is among the country’s first to include provisions in which citizens could receive dividends if exploration leads to production. It also includes the right of Liberia to receive a 10% share in Block 13 when commercial production starts, Akinsanya said in a release.

The Liberian basin consists of 30 concessionary blocks, according to NOCAL. Seventeen of these blocks are in the outer continental shelf in water depths between 2,500 m (8,202 ft) and 4,000 m (13,123 ft). Thirteen of the blocks are considered ultra-deep with water depths as deep as 4,500 m (14,764 ft).

The country is concentrating on the 17 existing offshore blocks, and it has no plans to offer additional blocks.

A third bid round to award contracts for Blocks 1-5 was cancelled by NOCAL in 2011 and no bids have been accepted for them, Jonathon Sogbie, NOCAL’s public relations manager, said in a recent release. “Blocks will not be offered until after the planned review of the petroleum policy, petroleum law, and model [PSC],” Sogbie added.

The decision to cancel the bid round was taken by Liberian President Ellen Johnson Sirleaf to “allow for a reform process of the oil and gas sector of the country,” NOCAL said.

Sirleaf commissioned various assessments of the oil and gas sector, and with the assistance of various experts, aim to draw a new oil and gas policy as outlined by NOCAL. She also wants to include local content, revenue, and environmental management plans in the new policy.

Blocks 6 and 7 are under review, according to Sogbie, but that contract is being negotiated, having never been fully executed or submitted to the president or legislature.

Blocks 8 and 9 are under contract to Australian company African Petroleum Corp. Ltd. (APCL) NOCAL said Block 8 is in second exploration period. APCL has conducted geological and geophysical (G&G) data acquisition, including 3-D seismic, to help determine where the next well will be drilled in Block 8 to satisfy the PSC work program.

In Block 9, three exploratory wells have been drilled – Apalis-1 in Q4 2011, Narina-1 in Q1 2012, and Bee Eater-1 in Q1 2013.

In February 2012, African Petroleum (AP) announced a significant oil discovery at Narina-1, NOCAL said. AP’s third well in Block 9, Bee Eater 1, was an exploratory well to determine the extent of Narina-1 pay and the commercial viability of the prospects of Narina-1 well discovery, which has a net pay of 32 m (105 ft) with 21 m (69 ft) in the Turonian and 11 m (36 ft) in the Alban.

Anadarko Liberia Co. operates in blocks 10 and 15. It has conducted G&G data acquisition, including 3-D seismic, to help better define the prospectivity of the blocks.

NACOL said the second phase of exploration for Block LB-15 has commenced. Anadarko continues to conduct G&G research on the block which includes geological evaluation and geophysical mapping incorporating all wells and seismic data available to the operator and partners. The work also will include post-well analysis on the Montserrado-1 well, which was drilled during the first phase of exploration.

Chevron Liberia Ltd. (CLL) is the major owner and operator in blocks 11, 12, and 14 offshore Liberia. In Block 11, the operator, according to NOCAL, has conducted 3-D seismic acquisition and drilled one well. The result indicated an active working petroleum system in the Liberian basin. Well data is being integrated in other studies of the basin to determine prospectivity.

In Block 12, CLL also has conducted 3-D seismic acquisition and drilled one well, Carmine Deep. Well data is being integrated with other studies in the basin to determine other prospects. NACOL stated Block 14 is in its first exploration period, and one well commitment is slated for 2014 by CLL.

Repsol Liberia BV is the operator of blocks 16 and 17. NACOL said Block 16 is in its first exploration period. No well has been drilled, but exploration activities are in progress in terms of data acquisition, processing, and interpretation. Block 17 is in its second exploration phase, though no well has been drilled, according to NOCAL. Data acquisition, processing, and interpretation are underway.

NOCAL added Anadarko withdrew from the two blocks, giving its operating interest to Repsol.

“Our goal is to lease Liberian oil blocks only to those companies best suited to both explore for and produce our country’s petroleum resources,” NOCAL said. “All companies seeking to explore in Liberia, including offshore territories, should expect to meet our high standards for corporate responsibility.”