Liberia Petroleum Regulatory Authority (LPRA) Strategic Assessment of the Potential Environmental, Economic and Social Impacts from Petroleum Operations in the Harper Basins May 2019 Table of Contents 1.0 Introduction ............................................................................................................................................ 5 2.0 Reasons for Bid Rounds .......................................................................................................................... 5 3.0 Description Tentative Schedule of Petroleum Activities ........................................................................ 7 4.0 PRELIMINARY ECONOMIC ASSESSMENT................................................................................................. 7 4.1 Overview ............................................................................................................................................. 7 4.2 Demand for Oil and Gas .................................................................................................................... 10 4.3 Fiscal Regime ..................................................................................................................................... 10 4.4 Fiscal Instruments ............................................................................................................................. 11 4.5 Windfall Profits Taxes ....................................................................................................................... 12 4.6 Bonuses ............................................................................................................................................. 12 4.7 Royalties ............................................................................................................................................ 12 4.8 Surface Rental or land/acreage rental fees ...................................................................................... 12 Production Sharing .................................................................................................................................. 13 4.10 Ring-Fencing .................................................................................................................................... 13 4.11 Loss Carry-forwards ........................................................................................................................ 13 5.0 Bid Round .............................................................................................................................................. 13 5.1 Historical Perspectives on Bid Rounds .............................................................................................. 14 5.2 Joint Venture ..................................................................................................................................... 15 6.0 Economic Evaluation ............................................................................................................................ 15 6.1 Assumptions ...................................................................................................................................... 15 6.2 Results ............................................................................................................................................... 15 6.3 Sensitivity Analysis ............................................................................................................................ 16 6.4 Selling of Share (Privatization) .......................................................................................................... 19 7.0 PRELIMINARY ENVIRONMENTAL ASSESSMENT .................................................................................... 19 7.1 Affected Environment ....................................................................................................................... 19 7.2 Potential Impacts and Alternatives ................................................................................................... 20 7.3 Methodology ..................................................................................................................................... 21 7.4 The ESIA Process ............................................................................................................................... 21 7.4.1 Introduction to the Process ....................................................................................................... 21 1 | P a g e 7.5 Mitigation and Monitoring Required ................................................................................................ 22 7.6 Regulatory Review ............................................................................................................................ 22 7.6.1 Legislative Framework ............................................................................................................... 22 7.6.2 Constitution of the Republic of Liberia ...................................................................................... 24 7.6.3 Environment Protection and Management Law of the Republic of Liberia .............................. 24 7.6.4 Effluent Discharge License ......................................................................................................... 25 7.6.5 Solid and Hazardous Waste Disposal License ............................................................................ 25 7.6.6 Pollution Emission License ......................................................................................................... 25 7.6.7 National Environmental Policy ................................................................................................... 25 7.6.8 The Act Creating the Environmental Protection Agency ........................................................... 25 7.6.9 National Energy Policy ............................................................................................................... 26 7.6.10 Statements of Policy ................................................................................................................ 26 7.6.11 New Petroleum Law of Liberia ................................................................................................. 26 7.7 Institutional Framework.................................................................................................................... 28 7.7.1 Environmental Protection Agency ............................................................................................. 28 7.7.2 Liberian Coast Guard .................................................................................................................. 29 7.7.3 Ministry of Mines and Energy .................................................................................................... 29 7.7.4 Ministry of Public Works ............................................................................................................ 29 7.7.5 Ministry of Health ...................................................................................................................... 30 7.7.6 Ministry of Internal Affairs ......................................................................................................... 30 7.7.7 Ministry of Agriculture ............................................................................................................... 30 7.7.9 National Fishery and Aquaculture Authority ............................................................................ 30 7.8 Environmental and Social Impact Assessment Process .................................................................... 30 7.9 General Background of Liberia .......................................................................................................... 31 7.9.1 Coastal Plains ............................................................................................................................. 32 7.9.2 Rolling Hills ................................................................................................................................. 32 7.9.3 Plateau and Tablelands .............................................................................................................. 32 7.9.4 Northern Highlands .................................................................................................................... 33 7.9.5 Meteorological Setting ............................................................................................................... 33 7.9.6 Precipitation ............................................................................................................................... 33 7.9.7 Temperature and Sunshine ........................................................................................................ 33 7.9.8 Wind ........................................................................................................................................... 34 7.9.9 Relative Humidity ....................................................................................................................... 35 7.10 Geological Setting ........................................................................................................................... 36 2 | P a g e 7.10.1 Stratigraphy .............................................................................................................................. 37 7.10.2 Structure 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