President Ellen Johnson-Sirleaf of the Republic of Liberia in West Africa.
Originally uploaded by Pan-African News Wire File Photos
By ANGEL GONZALEZ
Wall Street Journal
HOUSTON—Chevron Corp. said Wednesday it will explore for oil in deep water off the shore of Liberia, a nation that doesn't yet produce
crude but holds promising acreage in a region that has yielded rich
new crude deposits.
The San Ramon, Calif., company signed a deal for three big deep-water blocks covering a combined area of 3,700 square miles—nearly four times as big as Rhode Island and bigger than what Chevron holds off the shore of oil-rich Angola.
Chevron will hold a 70% interest in the concessions, and will conduct
a three-year exploration program, which will begin in the fourth
quarter.
Chevron's foray is the latest in an emerging oil region in West
Africa, where giant fields such as Tullow Oil PLC's Jubilee and
Anadarko Petroleum Corp.'s Venus have been found.
It is also the first time that a giant integrated oil company has
gotten involved in Liberia, which is still healing from years of civil
strife. An oil discovery would greatly boost the recovery of the
agrarian nation, one of the world's poorest, and could propel it into
the ranks of budding African oil powers like Ghana and Uganda.
"It represents an expression of confidence in the leadership and
future of Liberia, which are essential conditions to attract other
major investors in all sectors of the economy," Liberian President
Ellen Johnson Sirleaf said in an email. "The creation of jobs and the
revenue of possible oil finds will transform the economy through
infrastructure development."
For Chevron, Liberia is a rare find: a country that is still open to
foreign investment in its natural resources that could be home to
significant quantities of crude. The fact that the country isn't an
oil producer yet creates attractive conditions for investment.
"Terms and conditions in Liberia are in line with most of the
countries that are encouraging foreign investment," said Ali Moshiri,
Chevron's head for Africa and Latin America.
"They're very pragmatic about their approach," Mr. Moshir said of the
Liberian government. "That's the reason we're here."
As major oil companies scour the globe, competing with Asian companies to find the last few giant reservoirs of crude, finding a play of "this size and this magnitude" is becoming less and less common, he
said.
Mr. Moshiri said that the first well is scheduled to be drilled next
year, and that the company could base some of its operations out of
neighboring countries. Chevron has a large presence in Africa, and is
a major oil producer in Angola and Nigeria.
Liberia, with a population of 3.4 million, mainly depends on exports
of rubber and timber to make ends meet. It is still healing from the
civil war that ended in the earlier part of the decade, but its
recovery has been quickening its recent years. Last weekend, Delta Air
Lines Inc. launched the first direct flight between the U.S. and
Liberia in decades.
—Isabel Ordóñez contributed to this article.
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