Ukraine war has sens oil and gas prices skyrocketing to their highest levels in almost 10 years
Sierra Leone has launched its 5th offshore licensing round that is anticipated to receive some interesting offers for acquisition of oil blocs, government officials are saying.
The announcement was made at the recent African Global Energy Summit in London, and has ‘generated a lot of buzz’ in the sector around the world, according to the officials.
This is coming at a time when countries around the world are looking at new ways of procuring their energy supplies in the wake of the Ukraine war that has sent oil and gas prices skyrocketing to their highest levels in almost 10 years.
Not surprisingly, the Director General of the Sierra Leone Petroleum Directorate (SLPD), Foday Mansaray, was talking up the possibilities for investors and Sierra Leone as he wooed companies within the sector.
He assured interested parties that his team was ‘a committed group of technical, legal, and financial experts’ with the mandate ‘to facilitate the optimal exploration, and development of Sierra Leone’s potential petroleum resources for the long-term benefit of the people’.
Mansaray said that the SLPD’s aim was to ensure ‘the process of unlocking and realising Sierra Leone’s petroleum resource potential and transforming the country’s growth agenda through a sustainable development of the petroleum sector’.
The SLPD, the sole custodian of the upstream and midstream activities in the country, negotiates petroleum agreements on behalf of the government, issues licences, as well as monitors and regulates the operations of companies investing in this crucial sector for Sierra Leone.
Mansaray, a British-trained chemical engineer, stressed the attractive pull of the Sierra Leone basin and urged his audience to ‘take advantage of the favourable conditions including an excellent fiscal framework, a transparent legal regime and a committed leadership’ to invest in Sierra Leone.
Eddinia Michaela Swallow (pictured), a Senior Legal Counsel at the SLPD, mapped out areas that were non-negotiable: a fixed percentage payment of royalties, corporate tax, resource rent tax and the excessive profit tax that kicks in when the oil price shoots up beyond a certain mark.
Ms Swallow said there was a very robust legal framework at the SLPD which ‘establishes the contractual relationship between the SLPD and investors’.
This was buttressed by legislation such as; the Income Tax Act of 2000; the Environment Protection Agency Act of 2008; the Petroleum Production and Exploration Act of 2011; and the Local Content Act of 2016.
She said all of these clearly ‘spell out how you conduct business in Sierra, how to meet your obligations and how your interests and rights are guaranteed and protected’.
Currently, there are three types of petroleum rights that are granted to would-be investors: reconnaissance permit, petroleum licence, and the permit for laying out and operating a pipeline
All of these required a ‘pre-qualification assessment’ through a rigorous application process to determine suitability in terms of reliability and proven work record, Ms Swallow noted.
She said that the SLPD believed in ‘clarity and transparency’ and had adopted mechanisms that were ‘easy and straightforward’.
‘We give you access to everything and point out things that are likely to help or hinder your business.
‘We don’t hide anything from you.
‘Even the application fees for the different permits and licences are clearly printed on the application forms,’ Ms Swallow added.
Zainu Deen Karim, Director of Finance SLPD and a Board Member of the Sierra Leone Local Content agency, highlighted the ‘flexible fiscal regime’ in the country which he said ‘is tailored to attract and encourage investment’.
He spoke of the importance of corporate social responsibility that entailed working with local communities and taking care of the environment.
Karim called on investors to ‘incorporate extensive and intensive quality training of local staff, at all levels’, in their policies and to allow them to grow.
This, he pointed out, would not just help the trained staff and ultimately the country but ‘it will help the companies by improving efficiency and increasing competence’.
Sierra Leone’s Deputy High Commissioner in the UK, Yvonne King-Odigboh, thanked participants ‘for their interest, for their presence and for their participation’ at the launch that has been described by officials as the defining stage for Sierra Leone’s oil exploration programme.