For the first time since it gained independence over a century and a half ago, Liberia has struck an agreement with a foreign company for the exploration of crude oil in its territorial waters. On 29 August, the government of Liberia announced it had granted Chevron Corp. concessions to explore three deepwater areas for offshore oil in a three-year program set to start later this year. Liberia is also granting exploration rights to a number of other companies, including Repsol Exploration SA, Woodside West Africa Pty Ltd., Regal Liberia Ltd., and Anadarko Petroleum Corp. Liberia's legislature must still approve the agreement.
Analytical Note: Still reeling from the after effects of 25 years of chaos and civil war, Liberia appears to have never produced any oil, and transnational companies are keen to begin exploration for oil and gas. The exploration deals will be a litmus test for President Ellen Johnson Sirleaf, who has pledged to use the country's natural resources for growth and development. Furthermore, the Legislature's ratification of the Chevron agreement is not a done deal, and could find itself halted by domestic politics, especially with 2011 elections just around the corner. Political tensions in Liberia are on the rise, and the opposition could opt to use the deal against Sirleaf, who is seeking a second term in the 2011 elections.
By Jen Alic for OilPrice.com who focus on Energy, Finance and Geopolitical news. OilPrice.com also has a geopolitics newsletter that is delivered twice a week for free.
