Liberia’s Oil Discovery and the Response from Local Entrepreneurs

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Liberia’s Oil Discovery and the Response from Local Entrepreneurs

Written by  George D. Kennedy, Business Correspondent

Mr. Clinton displays modern training equipment TOTAL has imported for drivers. Some of the brand new trucks own by Arc Investment, Inc.

There is an old Chinese adage that says, “It is better to teach a man how to fish for himself than give him fish to eat.” Another old adage says “there is no food for lazy man.”

Some people are extremely lazy and they always sit by and rely on others to work and feed them.

It goes back to those who don’t want to do for their country, but always want their country to do for them.

The Liberian people woke up one morning to an announcement by Africa Petroleum of its discovery of oil in commercial quantity in its exploration blocks off-shore Liberia. But global concession watchdog, Global Witness, warned that if this discovery results in production, the country’s national oil company, NOCAL, must be kept in check to protect this major source of revenue.

NOCAL was recently brought into the limelight by Global Witness, warning that if the Liberian government does decide that it wants to maintain its national oil company, NOCAL, the government must determine how much control the company should exercise over revenues generated by the sector.

This was received by many in the public as vital to ensuring that Liberia’s oil revenues would rather help to further cure the wounds of the country, instead of serving as a curse to the country’s recovery from decades of civil strife and economic decline.

The fear is that any attempt on the part of the state-owned National Oil Company – which Global Witness has described as an institution with a history of corruption and fiscal mismanagement – to autonomously handle Liberia’s oil money will no doubt lead to chaos in the society.

It would be a travesty to have such lucrative natural resource discovered along the country’s coast to benefit only those who are already wealthy, while the poor continue in poverty. Oil wealth, on all fronts, must translate into increased economic growth and development boom for all citizens.  However, if the pockets of only a few political and social heavyweights continue to get deeper and deeper, then there is a problem.

After surviving 14 years of bloody civil war, Liberians will definitely want to have no resource curse upon their heads. Liberia’s Oil must therefore be transparently managed in order to be more of an economic blessing than a curse to the country and its people.

The good news, however, is that in response to the discovery, government, through its oil company, NOCAL, has not only welcomed these fears, it has been brainstorming on how Liberians would benefit from this natural resource.

But how can Liberians benefit when they don’t have the money to buy shares in the foreign companies operating in the country’s oil sector? They also have little or no technical know-how about the sector.

According to government,it is strategizing how to create what it called “local content” in the oil sector for Liberian businesses. But this has to be earned by Liberian companies/businesses, government has said.

In response to the benchmark set by government, TOTAL, a French petroleum company, has already begun to partner with a number of Liberian transporters. The French company has already begun to groom a Liberian transporter for the opportunity ahead.

Mr. Archon Clinton is the chief executive officer of ARC Investment Inc., a heavy duty transport company in Liberia.  Clinton started ARC Investment as a logistics company in 2007; purchasing and supplying used heavy duty trucks to businesses in the country.

Prior to that, after fleeing the civil war in Liberia in 1989 to Ivory Coast, Clinton moved on to settle in Ghana and subsequently to the Netherlands.

While in the Netherlands, he had an opportunity to link up with a number of Dutch firms. That exposure and contact the way for him in 2007 when he was informed by a friend of the arrival of TOTAL in Liberia. By then he had returned to home in 2005. He was told by this friend that the French petroleum company was interested in partnering with local transporters as part of its investment in Liberia.

“I didn’t have money when my friend told me about TOTAL and so I first considered selling my company to generate money to buy trucks,” noted the ARC CEO in an exclusive interview with this writer at his Somalia Drive office last Friday.

He later decided to reverse that decision. “I decided that since I can go to Europe, America and other Western countries to buy these trucks for my clienteles, it would be better for me to use my profit to buy one of the trucks for my company.”

Clinton did just that in 2008 when he bought his first used petroleum tanker. “My first truck was a used Volvo I bought in 2008,” he stated.

Archon and his ARC Investment Inc. then came in contact with TOTAL Liberia Inc.

“We had to prove our character to TOTAL and demonstrate that we are consistent and serious business people,” Clinton noted.

According to him, TOTAL has secured for him a fleet of brand new trucks that he now uses to transport the company petroleum products from one destination to the other.

TOTAL Liberia Inc. didn’t spend its own cash to purchase the trucks for ARC Investment Inc. and other transporter companies. What TOTAL has done, instead, for these companies is to provide its assets as collateral to Ecobank-Liberia so that the Bank can lend the money to the companies.

With TOTAL serving as guarantor on behalf of the companies, Ecobank-Liberia has made millions of United States dollars loan available to these Liberian transporters at a very moderate interest rate and repayment period of four years.

From his single used Volvo Truck in 2008, the ARC Investment Inc. now has 15 trucks including Renault, Volvo, and Mercedes, value over US$3.75 million dollars in 2012. Seven out of the 15 trucks are brand new Renault Trucks; while eight of them are used. The tankers are 6×6 and 8×4 high suspension vehicle specially built for the rough terrains in Liberia.

ARC Investment has benefitted six brand new trucks valued at US$1.5 million from TOTAL’s initiative. The cost of each of the trucks is US$250,000; while the lifespan of the tanker is at least ten to 15 years.

The trucks have two years’ warranty and that TOTAL has ensured that Renault Garage repairs the specially built fleets for Liberia at very low cost to the transporters. The Liberian transportor attributed his success in business to TOTAL Liberia, Inc.

Mr. Clinton explained that TOTAL has been very supportive of his business. “One of the most important things TOTAL has done is that the company has ensured that all of our transporters are well-trained and positioned to transport the company’s petroleum products,” he added.

According to the arrangement between TOTAL and the transporters, all of the trucks are embellished with TOTAL’s logo.

The tankers are assigned to transport TOTAL’s petroleum products across the country. TOTAL’s role is to provide the collateral to the Bank.

The French company is also responsible for paying the transporters for the services rendered; while the transporters will repay the loan they took from the Bank.

“I can now access credit because of TOTAL’s confidence I enjoy and the link the company has created between me and the banks,” Clinton said.

“What impresses me most about TOTAL is that the company is [not] Liberian-owned. But it is serving as guarantor for Liberians to become millionaires in their own country,” he added.

ARC Investment, Inc. currently has 64 Liberians in its employ — 17 of whom are heavy duty drivers, including a female trainee.

Meanwhile, Mr. Clinton has named theft and bad road conditions across the country as major challenges facing his company.

“Theft of fuel and bad road conditions are the major challenges facing ARC Investment. I don’t joke when it comes to proving my sincerity to TOTAL. I must ensure that petroleum products are correctly and accurately transported to the required destination.

“We give monthly prizes to our best drivers and conductors. We have reduced shortages over the last two years because of these incentives,” he said.

By | 2017-05-22T19:34:04+00:00 May 22nd, 2017|Uncategorized|0 Comments

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