A geographical survey has estimated that waters off Liberia, Sierra Leone, Guinea and Ghana could contain reserves of up to 3,200 million barrels of oil.
Watchdog Global Witness alleges that international firms and local officials are paying bribes in return for future oil contracts in Liberia despite the fact that oil is yet to be discovered.
Global Witness alleges that oil company Oranto Petroleum bribed the Liberian legislature in order to ratify a contract, as did the National Oil Company of Liberia (NOCAL), the government agency tasked with monitoring the oil sector.
A Global Witness researcher claims the group have unearthed bank payment vouchers and receipts from lawmakers, “We have documentary evidence that up to $120,000 was paid to the legislature over a period of two years”.
There are fears that if such systematic corruption is not controlled, the oil industry could undermine Liberia’s recovery. Mr Yiah of Sustainable Development Institute and member of the Liberian Oil and Gas Initiative states that “The decisions taken by the government and international donors in the coming months could define [its] future: they must reform the sector now or risk continuing the corruption and instability of Liberia’s past”.
NOCAL both regulates the sector and is mandated as a company to profit from oil. Global Witness recommends that government agencies responsible for the sector should be restructured, the regulatory power of NOCAL removed and an independent oversight body created. They also suggest that corruption in the oil sector be investigated and the country’s anti-bribery and transparency laws enforced as well as creating independently managed oil accounts to stop the country depending on oil money.