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Management Letter

On the Restated Financial Statement Audit of the

National Oil Company of Liberia (NOCAL)

For the Fiscal Periods 1 July 2011 to 30 June 2015

Yusador S. Gaye, CPA, CGMA

Auditor General, R.L.

Monrovia, Liberia

July 2017

Management Letter on the Restated Financial Statement Audit Of The National Oil Company of Liberia For The Periods Ended 1 July 2011 to 30 June 2015

1 Promoting Accountability of Public Resources

Table of Contents

INTRODUCTION ................................................................................................................ 3

SCOPE AND DETERMINATION OF RESPONSIBILITY ...................................................... 3

1 DETAIL FINDINGS AND RECOMMENDATIONS ............................................................. 5

1.1 Revenue ................................................................................................................... 5

1.1.1 Revenue Recognition ............................................................................................. 5

1.1.2 Accounts Receivable .............................................................................................. 8

1.1.3 Revenue Sharing Ratios “Old Data - PSDM” ............................................................. 8

1.1.4 Revenue Sharing Ratios “New Data – Cost Recovery” ............................................. 10

1.1.5 Revenue Sharing Ratios “Old Data” ....................................................................... 13

1.1.6 Revenue Sharing Ratios “3D Data” ........................................................................ 15

1.1.7 Revenue Sharing Ratios “3D Data – Cost Recovery” ............................................... 18

1.1.8 Redacted Invoices ............................................................................................... 21

1.2 Asset ...................................................................................................................... 22

1.2.1 Property, Plant & Equipment (PPE) ....................................................................... 22

1.2.2 Cash and Bank Reconciliation ............................................................................... 25

1.3 Expenses ................................................................................................................ 26

1.3.1 Travel ................................................................................................................ 26

1.3.2 Consultancy Contracts not in Compliance with PPC Act ........................................... 27

1.4 Corporate Governance Issues............................................................................... 30

1.4.1 Corporate By-Laws .............................................................................................. 30

1.5 Compliance Issues ................................................................................................ 31

1.5.1 Fuel usage log for Generator ................................................................................ 31

1.5.2 Award of Geophysical Services ............................................................................. 33

1.6 Control Issues ....................................................................................................... 34

1.6.1 Internal Control Weakness ................................................................................... 34

1.7 Physical Verification .............................................................................................. 37

1.7.1 Projects Implemented by Implementing Agencies and Institutions ........................... 37

1.7.2 Land .................................................................................................................. 41

1.7.3 Unverified Vehicle Assets ..................................................................................... 43

PRIOR YEAR AUDIT MATTERS NOT IMPLEMENTED .......................................................... 45

2 ANNEXURE ................................................................................................................... 47



ACRONYMS USED

ABBREVIATION MEANING

AG Auditor General

CGMA Chartered Global Management Accountant

COSO Committee of Sponsoring Organizations of the Treadway

Commission

CPA Certified Public Accountant

GAC General Auditing Commission

GOL Government of Liberia

IAS International Auditing Standards

IFRSs International Financial Reporting Standards

IOCs International Oil Companies

ISSAIs International Standards of Supreme Audit Institutions

LEITI Liberian Extractive Industries & Transparency Initiative

MOUs Memorandum of Understandings

NOCAL National Oil Company of Liberia

PFM Regulation Public Financial Management Regulation

PPC Act Public Procurement and Concession Act

PPE Property, Plant & Equipment

PSCs Production Sharing Contracts

PSDM Pre-Stack Depth Migration

PSTM Pre-Stack Time Migration

RL Republic of Liberia



THE Audit of THE NATIONAL OIL COMPANY OF LIBERIA Financial Statement for the

fiscal period 1 JULY 2011 TO 30 JUNE 2015

Cllr. Althea Sherman

Acting President/CEO

National Oil Company of Liberia (NOCAL)

Ashmun and Randall Streets

Monrovia, Liberia

July 19, 2017

Dear Cllr. Sherman:

The National Oil Company of Liberia financial statement are subject to audit by the Auditor- General

in term of section 2.1.3 of the New GAC Acts of 2014 as well as in accordance with the Public

Financial management Acts and regulations of 2009. The audit covered the fiscal period 1 July to 30

June 2015.

INTRODUCTION

The audit of the National Oil Company of Liberia (NOCAL) Financial Statements for the ended 1 July

2011 to 30 June 2015 was completed and the purpose of this letter is to bring to your attention the

finding that were revealed during the audit.

SCOPE AND DETERMINATION OF RESPONSIBILITY

The audit was conducted in accordance with the International Standards of Supreme Audit

Institutions (ISSAIs). These standards require that the audit is planned and performed so as to

obtain reasonable assurance that in material respects, fair presentation is achieve in the annual

financial statements.

An audit includes:

Examination on test basic of evidence supporting the amount and disclosures in the financial

statements;

Assessment of the accounting principles used and significant estimates made by

management; and

Evaluation of the financial statement presentation.

The audit will also include an examination, on a test basic, of evidence supporting compliance in all

material respects with the relevant laws and regulation which came to our attention and are

applicable to financial matters.

The matters mentioned in this letter are therefore those that were identified through test

considered necessary for the purpose of the audit and it is possible that there might be other

matters and/or weaknesses that were not identified.



The financial statements, maintenance of effective control measure and compliance with law and

regulation are the responsibility of the Accounting Officer. Our responsibility is to express our

opinion on these financial statements.

KEY MANAGEMENT PERSONNEL

No. Name Rank Time served

1 Dr. Randolph AKW. McClain President/CEO Feb.24,2012-Sept.30,2015

2 Marie E. Leight-Parker Sr. VP & VP/Finance April 11,2006-Nov.30,2013

3 Ophelia Hoff-Saytumah Vice President/CSR. April 11,2009-Oct.31,2013

4 Vida Mensah Vice President/Adm. May 1, 2012- Sept.30,2015

5 Rufus M. Tarnue Vice President/Tech Feb. 1,2011- Present

6 Pete E. Norman Asst. VP/CSR Feb. 1,2011-Sept.30,2015

7 Lamini Waritay Vice President/Public

Affairs March 1,2014- Sept.20,2015

8 Fulton D. Reeves Comptroller Sept. 18,2006-Oct.31,2015

9 Albert B. Cassell, Sr. Asst. Comptroller Sept.29,2010- Oct. 31,2015

10 Cllr. Althea Sherman Chief Operating Officer Sept.1,2013- Sept.30,2015

11 Cllr. Althea Sherman Interim President/CEO Oct.1,2015-Present

12 Karmo Ville Vice President Finance March 1,2014- Present

13 Cllr. Zaiye B. Dehkee, Director Legal Dept. July1,2012- Oct. 31,2015

14 Mrs. Idella Cooper-Shannon Legal Advisor pres./CEO May1,2012- Oct. 31,2015

15 Robert Sonkarlay Senior Accountant Dec.3,2012- Oct.31,2015

APPRECIATION

We would like to express our appreciation for the courtesy and assistance rendered by the staff of

the NOCAL during the audit.

Yours Faithfully,



1 DETAIL FINDINGS AND RECOMMENDATIONS

1.1 Revenue

1.1.1 Revenue Recognition

Observation

1.1.1.1 “IAS 18 Revenue” outlines the accounting requirements for when to recognize revenue

from the sale of goods, rendering of services, and for interest, royalties and dividends.

Revenue is measured at the fair value of the consideration received or receivable and

recognized when prescribed conditions are met, which depend on the nature of the

revenue. The criteria required to be met from revenue arising from the sale of goods,

according to IAS 18 paragraph 14 are:

The seller has transferred to the buyer the significant risks and rewards of

ownership.

The seller retains neither continuing managerial involvement to the degree

usually associated with ownership nor effective control over the goods sold.

The amount of revenue can be measured reliably

It is probable that the economic benefits associated with the transaction will

flow to the seller, and

The costs incurred or to be incurred in respect of the transaction can be

measured reliably.

1.1.1.2 It was observed from the inception of the income arrangement between TGS-NOPEC

and NOCAL; the Management of NOCAL appeared to have recognized revenue on a

basis inconsistent with IFRS. Therefore, for the periods under audit when those

recognition basis were applied, revenue were understated for the fiscal years 2011/2012

and 2012/2013 and overstated 2013/2014 and 2014/2015.

1.1.1.3 In addition, although the net effect of the understatements and overstatements appears

to have no net affect overall, NOCAL should apply the policy for recognition of revenue

in line with revenue standards promulgated under IFRS. See table 1 below for

NOCAL recognition of revenue as compared to IFRS.

Table 1: Revenue Recognition (Amounts in USD)

Description Revenue Recognition - IFRS

2011/2012 2012/2013 2013/2014 2014/2015

Amounts Collected: 2D PSTM 9,123,354 3,328,448 2,124,089 170,534

2D PSDM 684,819 138,147 104,547 19,189

2D Ultra Deep 2,165,656 5,382,957 2,201,485 529,466

Other 3D 5,449,870 11,915,759 - -

Sunfish 3D - 416,006 360,224 -



Table 1: Revenue Recognition (Amounts in USD)

Description Revenue Recognition - IFRS

2011/2012 2012/2013 2013/2014 2014/2015

Well Logs

Total Amount Collected 17,423,699 21,181,318 4,790,345 719,189

Interest

Less Expenses reimbursed by NOCAL

( 745,000)

Total Amount – IFRS 17,423,699 20,436,318 4,790,345 719,189

Revenue Recognition – Basis other than IFRS

2011/2012 2012/2013 2013/2014 2014/2015

Amounts Collected: 2D PSTM 7,051,054 4,524,992 2,596,587 -

2D PSDM 527,874 293,708 104,547 -

2D Ultra Deep 2,165,656 5,382,957 2,201,485 529,466

Other 3D 7,150,801 5,515,120 5,788,832 6,126,927

Sunfish 3D - 302,550 473,681

Well Logs

Total Amount – Other basis 16,895,385 16,019,326 11,165,132 6,656,393

IFRS Adjustments

528,313 4,416,992 (6,374,787)

(5,937,204)

1.1.1.4 It was also noted during the audit that some revenue items were not included in the

Revenue Sharing Report and therefore were neither received nor recognized by NOCAL.

See table 2 below for further detail.

Table 2: Omissions from Revenue Sharing Report

Description

# of

Wells Invoice #

Invoice

Date

Invoice

Amount

Collection

Date

% Amount

(US$)

Shell 7 11424 08/10/2011

17,500 9/9/2011

50% 8,750

Total SA 7 111938 31/05/2008 14,000 11/12/2008 50% 7,000

Total SA

111938 31/05/2008 4,900 11/12/2008 50% 2,450

Sub-total

18,200

Data Type

Invoice

#

Invoice

Date

Invoice

Amount

Audited

Amount Variance

Date

Collected NOCAL 65%

Seismic 0002674 25/11/2009 494,241 606,741 112,500 11/02/2010 73,125

Seismic 0002512 31/08/2009 525,996 540,218 14,221 20/10/2009 9,244

Sub-total 82,369

Total 100,569

Risk

1.1.1.5 The failure of management to record revenue in adherence to IAS 18 could lead to the

misstatement of the financial statements and mislead users of the financial statements.

1.1.1.6 The non-disclosure of revenue items on Revenue Sharing Report could deny NOCAL the

requisite revenue and impede the smooth operation of the entity.



Recommendation

1.1.1.7 Management should develop a revenue recognition policy that meets the requirements

of International Financial Reporting Standards (IFRSs) and ensures that NOCAL‘s

revenue is recorded in its books on a timely basis.

1.1.1.8 NOCAL should post adjusting entries to conform to IAS 18 and restate the financial

statements for the periods mentioned.

1.1.1.9 NOCAL should institute measures aimed at recovering undisclosed revenues.

Management Response

1.1.1.10 Management acknowledges and notes the auditor’s observation and findings with

respect to revenue recognition for FY2011/2012. Beginning FY2016/2017, NOCAL began

to address this issue by adopting an approved Financial and Accounting Procedural

Manual that includes a revenue recognition policy consistent with the International

Financial Report Standards (IFRS). Additionally, Management has restated its financial

statements for the audited fiscal years in line with IAS 18 per the GAC recommendation

Finally, to the extent that we can prove that revenue remains outstanding from TGS,

management will pursue recovery of those revenues and report to the GAC during

subsequent audits of NOCAL.

1.1.1.11 Management also wishes to clarify that with respect to subsequent fiscal years

(FY2012/2013, FY2013/2014, and FY2014/2015) the nature of the contractual

relationship between NOCAL and TGS made it impractical to recognize revenue when

invoices were issued by TGS. Management only became aware of those transactions

when revenue share reports were submitted to NOCAL by TGS at the end of each month

and it was at that point that management recognized revenue. The fundamental

recognition issue here is that management recognizes revenue when the transactions

became known to NOCAL, regardless of when cash was received. Our review of our

record shows that most of these recognitions were made before the cash was

subsequently received by NOCAL. Management also recognizes the auditor’s assessment

that even though there may have been delayed revenue recognition during intervals of

the audit period this did not have any net effect on the total revenue reported by the

corporation.

Auditor General’s Position

1.1.1.12 We acknowledge Management’s assertion that beginning FY2016/2017 the revenue

recognition is being addressed by adopting an approved Financial and Accounting

Procedural Manual that includes a revenue recognition policy consistent with the

International Financial Reporting Standards (IFRS). We will validate management’s

assertion of adopting IFRS during subsequent audit.

1.1.1.13 Management did not address the issue of posting adjusting entries in the Restated

Financial Statements as recommended. In addition, contractual relations should be

transparent and practicable to ensure that accounting revenue recognition principle is

applicable. Therefore, we maintain our recommendation.



1.1.2 Accounts Receivable

Observation

1.1.2.1 According to IAS 32 trade receivables are classified as a financial asset, namely an asset

that is a contractual right to receive cash or another financial asset from another entity.

1.1.2.2 We noted that NOCAL did not record accounts receivable arising from transactions with

TGS-NOPEC.

Risk

1.1.2.3 The failure of management to record accounts receivable could lead to the misstatement

of the financial statements and mislead users of the financial statements.

Recommendation

1.1.2.4 Management should develop a revenue recognition policy that meets the requirements

of International Financial Reporting Standards (IFRS) and ensures that accounts

receivable are identified and recorded accurately.

Management Response

1.1.2.5 Management notes the auditor’s recommendation with respect to recognition of

accounts receivable in its financial statements for the audited years. Management

confirms that this observation is particularly true for FY2011/2012 and FY2012/2013.

Beginning in FY2013/2014, Management started to recognize account receivable at the

time of receipt of the revenue share report from TGS. These recognitions were reflected

in financial statements presented to the auditors at the commencement of the audit for

those years. Beginning in fiscal year 2016/2017, Management has adopted an approved

Financial and Accounting Procedural Manual with a section on revenue recognition policy

in line with IFRS that will address accounts receivable recognition issues in the future.


1.1.2.6 We acknowledge that the receipt of the Revenue Share Report from TGS might not be

timely to assist Management in complying with IFRS. TGS should adhere to the tenets of

the agreements and provide copies of invoices immediately when clients are billed.

However, we will validate Management’s assertion that it has “adopted an approved

Financial and Accounting Procedural Manual with a section on revenue recognition policy

in line with IFRS” during subsequent audit.

1.1.3 Revenue Sharing Ratios “Old Data - PSDM”

Observation

1.1.3.1 Article 4 Section 1 of the ULTRA DEEP-WATER 2D SEISMIC SURVEY AND DATA

MANAGEMENT PROJECT AGREEMENT between NOCAL and TGS of August 4, 2009 states

the following:

“For and in consideration of the Old Data Services, NOCAL and TGS-NOPEC

agree that all Old Data Licensing Fees and Viewing Fees shall be shared by the

parties in the following manner: NOCAL, 65% and TGS-NOPEC 35%.”



1.1.3.2 We observed that TGS-NOPEC recovered a cost of approximately US$400,000 from

transactions arising from these data without evidence of an agreement between NOCAL

and TGS-NOPEC in respect of recovery of such cost.

1.1.3.3 Furthermore, we recalculated NOCAL’s share of the revenue based on stipulations from

the contract to be US$2,000,897 (65% of revenue as stipulated in the contract) of the

total revenue of US$3,078,303. However, NOCAL received US$1,624,760 resulting into a

variance of US$376,137. See table 3 below and Annexure 1 for detail.

Table 3: Revenue Sharing Ratios Old Data-PSDM

Fiscal

Year Total KMs

# of

Invoices

Total Invoice

Amount

US$

A

NOCAL

Calculation

%

GAC

Recalculati

on (65%)

B

TGS

Calculation

C

Variance

B - C

Prior

year

38,558.66 12

1,621,837.00

10% &

60%

1,054,194

750,880

303,314

2012

23,901.71 11

1,053,568.00

60%

684,819

632,141

52,678

2013

10,382.06 5

212,535.00

60%

138,147

127,521

10,627

2014

3,216.83 2

160,841.00

60%

104,547

96,505

8,042

2015 1

29,522.00

60%

19,189

17,713

1,476

Total 76,059.26 31 3,078,303.00 2,000,896 1,624,760 376,137

Risk

1.1.3.4 Non-compliance with Article 4 Section 1 of the ULTRA DEEP-WATER 2D SEISMIC

SURVEY AND DATA MANAGEMENT PROJECT AGREEMENT could deny NOCAL much

needed revenue.

Recommendation

1.1.3.5 NOCAL should institute measures aimed at recovering the desired revenues in

accordance with Article 4 Section 1 of the 2D Ultra Deep Contract.

Management Response

1.1.3.6 The issue raised here by the GAC stems from an issue of interpretation under the above-

mentioned contract with TGS (the “2009 Contract”), and does not represent an

accounting issue, per se, or a situation in which there was clear non-compliance by TGS

with terms of the 2009 Contract.

1.1.3.7 TGS asserted that under the terms of the 2009 Contract, the 2D PSDM data licensed

under the invoices identified in Annexure 1 was neither “Old Data” nor “New Data” under

the terms of the 2009 Contract, but was effectively a third class of data, independently

developed by TGS from the original raw survey data after the effective date of the 2009



Contract. (Under the 2009 Contract “Old Data” included 2D data existing as of the

Effective Date and “New Data” included the data collected pursuant to the surveys to be

conducted pursuant to the 2009 Contract).

1.1.3.8 TGS agreed to share the proceeds from the 2D PSDM data on the same basis as: New

Data_90% TGS and 10% NOCAL until TGS recovered the US$400,000 cost incurred in

processing the 2D PSDM data, and thereafter 40% TGS and 60% NOCAL.

1.1.3.9 NOCAL argued that because the 2D PSDM data was derived from the raw survey data

from the initial TGS 2D survey, it should be treated as Old Data.

1.1.3.10 After further review of this matter with external counsel, NOCAL recognized that the

definition of Old data could be read to support TGS’ view. Old Data was defined in the

2009 Contract to mean “data from any source including but not limited to any tapes,

reports, interpretation, seismic, gravity, magnetic and well logs data, whether digitized

or not, acquired, produced, or obtained prior to the Effective Date of this Agreement…”

The 2D PSDM product, which is technologically distinct from the earlier 2D PSTM data,

was clearly created after the Effective Date. Hence, Management, recognizing the

ambiguity related to the language of this provision of the 2009 Contract and realizing

that with such an interpretation this matter could go either way, has decided to further

engage TGS on this matter with the goal of receiving financial benefit for the corporation

from any additional revenue earned on the licensing of the 2D PSDM data. The outcome

of this negotiation will be recorded and reported to the auditors during the audit of

NOCAL in subsequent fiscal years.


1.1.3.11 We acknowledge Management’s response that TGS will be engaged on this matter with

the goal of receiving financial benefits for NOCAL and report the outcome of the

negotiation to the GAC. However, we did not see evidence of a “third class of data” nor

cost recovery provision of $400,000 in the agreement.

1.1.4 Revenue Sharing Ratios “New Data – Cost Recovery”

Observation

1.1.4.1 Article 6 Section 1 of the ULTRA DEEP-WATER 2D SEISMIC SURVEY AND DATA

MANAGEMENT PROJECT AGREEMENT between NOCAL and TGS of August 26, 2009,

states the following:

For and in consideration of the New Data Services, NOCAL and TGS-NOPEC

agree that all New Data Licensing Fees and Viewing Fees shall be shared as

follows:

o Up to TGS-NOPEC receiving $1,190 USD per km (excluding required

permit costs) in License or viewing fees from the New Data (in other

words, until such time TGS-NOPEC recover its investment in surveying

the area capped at US $17,255,000): all license revenue shall be

shared 90% TGS-NOPEC, 10% NOCAL;



o Subsequent license revenues would be shared: 40% TGS-NOPEC, and

60% NOCAL until the expiration or termination of the 2009 Agreement.

1.1.4.2 In addition, Article 18 of the Agreement states “each of the Parties shall nominate an

authorized representative and his alternate who will be responsible for all

communications required or made under this Agreement by that Party. Each Party shall

have the right to change such representative or alternate by notice in writing. As at the

date of signature or this Agreement, the names of the Parties’ representatives and their

addresses for service are as follows:

TGS – NOPEC Geophysical Company

Attn: Mr. David Hicks – VP/AMEAP

National Oil Company of Liberia

Attn: Dr. Fodee Kromah

1.1.4.3 We noted numerous inconsistencies in the revenue sharing ratios applied by TGS-NOPEC

to determine NOCAL‘s share of revenue, contrary to the provisions of the agreement

above which led to TGS-NOPEC recovering US$18,315,171 instead of US$17,255,000.

See table 4 below & Annexure 2 for detail

Table 4: Summary of Distribution of Excess Cost Recovered

Description % per

Agreement Amount (US$)

Recovered Amount 18,315,171

Maximum Recoverable per Agreement 17,255,000

Excess Recovered by TGS-NOPEC 1,060,171

Distribution of Excess cost recovered:

NOCAL Share of Excess Cost Recovered 60% 636,103

TGS-NOPEC Share of Excess Cost Recovered 40% 424,068

1.1.4.4 Additionally, we noted that email exchanges between the then Vice President/Finance

about possible expansion of area to be surveyed did not address the cost implication of

such expansion. The silence of both parties on the cost implication of the proposed

expansion exposed the interpretation of their email exchanges to uncertainty.

1.1.4.5 We also noted that TGS-NOPEC seeking the approval of the then Vice President/Finance

to expand the survey area was in clear violation of Article 18 of the contract. As

mentioned above, Dr. Fodee Kromah (the then President/CEO) was the designated

person from NOCAL to contact on matters relating to the contract. We observed no

evidence that TGS-NOPEC was given written notice designating to the then Vice

President/Finance as the authorized representative of NOCAL. Reference table 4

above for detail.

Risk

1.1.4.6 Non-compliance with Article 6 Section 1 (i) and (ii) of the ULTRA DEEP-WATER 2D

SEISMIC SURVEY AND DATA MANAGEMENT PROJECT AGREEMENT could deny NOCAL

much needed revenue.



Recommendation

1.1.4.7 NOCAL should institute measures aimed at recovering the desired revenues in

accordance with Article 6 Section 1 of the 2D Ultra Deep Contract.

Management Response

1.1.4.8 The issue here is also a question of interpretation of the 2009 Contract, and not an

accounting issue or a simple matter of failure to follow the clear terms of the 2009

Contract. The rights of the parties depend upon whether the 2009 Contract set a

maximum limit on the acreage that TGS would survey, or merely fixed a cost per

kilometer for the survey work and indicate the projected size of the survey.

1.1.4.9 The position of the GAC is based on the assumption that the contract set a maximum

limit on the acreage to be surveyed, and that TGS could recover survey costs only in an

amount equal to the stated cost per kilometer multiplied by the stated acreage amount.

1.1.4.10 TGS takes the position that the acreage surveyed was not intended to be fixed by the

reference in the contract recitals to 14,500 acres, and notes that Article 7.1(ii)

specifically states that “It is understood by TGS and NOCAL that the final program

acquired may be adjusted to reflect industry interest and prefunding.”

1.1.4.11 NOCAL was advised by outside counsel that on these facts, arbitration counsel would not

be comfortable pursuing a claim against TGS based on facts that clearly demonstrate

that TGS conducted an extended survey, with NOCAL’s knowledge, and to NOCAL’s

financial benefit. We were also further advised by external counsel that if the dispute

was taken to arbitration, the TGS interpretation of the contract could likely prevail. In

light of the ambiguity in the provision of the contract and advice provided by external

counsel, Management has decided to further engage TGS to consider ceding additional

revenue share to NOCAL in line with the GAC recommendation. However, Management

recognizes that it faces a significant challenge for recovery of the full amount estimated

by the auditors to be recoverable in the face of incontrovertible evidence that TGS

conducted the survey over an area that exceeded the stated acreage indicated in the

contract.

1.1.4.12 Management respectfully submits a copy of the memo from external counsel regarding

this matter (attached as Exhibit 1.1.4- Memorandum - External Counsel) for GAC review

and consideration.


1.1.4.13 We acknowledge Management’s assertion that efforts will be made to recover the

additional revenue from TGS. We will validate Management’s assertion during

subsequent audit.



1.1.5 Revenue Sharing Ratios “Old Data”

Observation

1.1.5.1 Article 1 Section 7 ULTRA DEEP-WATER 2D SEISMIC SURVEY AND DATA MANAGEMENT

PROJECT AGREEMENT between NOCAL and TGS-NOPEC of August 4, 2009, defines

―Old Data as follows:

Old Data means any NOCAL‘s geophysical data from any source including but

not limited to any tapes, reports, interpretation, seismic, gravity, magnetic and

well logs data, whether digitized or not, acquired, produced, or obtained prior

to the Effective Date of this Agreement, in the possession of TGS-NOPEC for

and on behalf of NOCAL under any previous arrangements, agreement or

MOU.

1.1.5.2 Additionally, Article 4 Section 1 states the following:

For and in consideration of the Old Data Services, NOCAL and TGS-NOPEC

agree that all Old Data Licensing Fees and Viewing Fees shall be shared by the

parties in the following manner: NOCAL, 65% and TGS-NOPEC 35%.

1.1.5.3 We observed, during the audit, that revenue from old data amounting to US$5,580,913

were shared 60% or US$3,348,548 to NOCAL and 40% or US$2,232,365 to TGS-NOPEC.

Based on our recalculation, NOCAL should have received US$3,627,593 while TGS-

NOPEC receives $1,953,320. Thus NOCAL received US$279,046 less in revenue than

allowed by the contract. See table 5 below & annexure 3 for detail.

Table 5: Distribution Summary of Understated Old data (PSTM) Revenue

Description

2D PSTM

Revenue

Summary

A

TGS-NOPEC NOCAL

%

Amount

(US$)

B

%

Amount (US$)

(A-B)

TGS-NOPEC calculation of old data

5,580,913.00

40

2,232,365

60

3,348,548

GAC Recalculation based on old data

rate

5,580,913.00

35

1,953,320

65

3,627,593

Understated Revenue 279,046

1.1.5.4 We observed no evidence to support the variations observed in the distribution ratios.

Risk

1.1.5.5 Deviation from contractual agreement by TGS-NOPEC and NOCAL’s inability to identify

and remedy such deviation could deny NOCAL the necessary revenue it is entitled to.

Recommendation

1.1.5.6 Both TGS-NOPEC and NOCAL should ensure that contractual agreements are adhered to

the fullest. Any amendment to the contract should be adequately documented in a form

of an addendum.



1.1.5.7 NOCAL should seek recovery of the revenue identified through appropriate means

agreed to with TGS – NOPEC.

Management Response

1.1.5.8 NOCAL understands from the preliminary GAC findings and inquiry for feedback during

the audit fieldwork that this issue involves the invoices identified below, each of which is

for 2D data originating under the 2004 2D MOU. (The “kilometer and “type of data”

columns have been eliminated from the original table shown in the preliminary GAC

findings to fit the table on a regular page.)

Invoice

#

Invoice

Date

Fiscal

period

Invoice

Amount

NOCAL%

$

GAC Rx

Variance

Total S.A. 0001495 30/05/2008 2008

378,000 60%

226,800

245,700

(18,900)

Total S.A. 0001495 3/07/2008 2008

90,000 60%

54,000

58,500

(4,500)

Tullow 0001765 15/10/2008 2008

1,358,124 60%

814,875

882,781

(67,906)

Tullow 0001765 15/10/2008 2009

84,883 60%

50,930

55,174

(4,244)

Tullow 0001765 15/10/2008 2009

70,000 60%

42,000

45,500

(3,500)

Anadarko

Petroleum

Corp

0001937 17/12/2008 2009

372,164 60%

223,299

241,907

(18,608)

ConocoPhillips 0002328 18/05/2009 2008

1,791,132 60%

1,074,679

1,164,236

(89,557)

BP Exploration

Operating

0002331 19/05/2009 2009

704,972 60%

422,983

458,232

(35,249)

BP Exploration

Operating

0002331 19/05/2009 2009

54,575 60%

32,745

35,474

(2,729)

Anadarko

Petroleum

Corp

0002386 23/06/2009 2009

16,067 60%

9,640

10,443

(803)

Maralhon Oil 0002512 31/08/2009 2010

525,996 60%

315,598

341,898

(26,300)

1.1.5.9 The GAC takes the position that the NOCAL share of the above invoices should have

been computed on the basis of the 65% share to which NOCAL is entitled for licenses of

“Old Data” under the above-mentioned Ultra Deep contract (the “2009 Contract”). It is

true that the data covered by these licenses is “Old Data” under the 2009 Contract.

However, the 2009 Contract did not become effective until 26 August 2009. (Under

Article 1.16 of the 2009 Contract, the “Effective Date” of the contract is the date on

which it was signed by both parties. NOCAL was the last to sign, on August 26, 2009.)

Therefore, the new 65% NOCAL 35% TGS fee split for “Old Data” was not effective for

licenses granted prior to August 26, 2009, and all license fees paid for 2D data to that

date were split under the terms (as then in effect) of the 2004 2D MOU.



1.1.5.10 As of 2008, TGS and NOCAL had agreed to split license fees under the 2004 2D MOU on

a 60% NOCAL 40% TGS basis. All of the licenses shown in the above table other than

the most recent license (Marathon) were issued prior to August 26, 2009, and therefore

the correct split applicable to those licenses was 60-40. Only the Marathon license was

issued after August 26, 2009, and only that license fee should have been split on the

65%-35% basis. Therefore, the revenue shortfall is not $279,046, but rather $26,300.

Accordingly, the Management of NOCAL shall seek recovery of US$26,300 and not

US$279,046 from TGS.


1.1.5.11 We acknowledge Management’s assertion that it will recover the Marathon revenue from

TGS. We will validate Management’s assertion during subsequent audit.

1.1.6 Revenue Sharing Ratios “3D Data”

Observation

1.1.6.1 Article 2 Section 7 of the 3D Multi-Client Seismic Survey Project Memorandum of

Understanding between NOCAL and TGS – NOPEC Geophysical Company ASA of June

14, 2007, states that Trading, Licensing, Open Block Licensing and all other fees

received by TGS-NOPEC shall be shared 40% NOCAL; 60% TGS-NOPEC.

1.1.6.2 Furthermore, we noted reproduction charges in connection with the license of the data

and charges and fees relating to the data and interpretations pursuant to this MOU, or

the use, viewing fees, registration, rental, transportation, delivery, ownership or

operation hereof were not shared with as stipulated in Article 2 Section 7. Based on our

analysis, total other fees amounted to US$2,571,855 and NOCAL’s share of these

charges summed up to US$1,028,742. See table 6 below and Annexure 4 for

detail.



Table 6: Other Reproduction Charges (Amounts in US$)

Fiscal

Year KMs

Total Amount

Invoiced

Total Audited

Amount Variance

Total

Price/Sq.Km

Audited

Total

Price/Sq.Km

MOU

Total

variance/Unit Variance total

Total

reproduction &

Other Charges

2010/2011 6,413

9,690,031

13,579,266 3,889,236 4566

6,000 1,434

3,135,969

380,968

2011/2012 8,846

13,624,674

13,980,036 355362 5162

6,000 838

4,067,162

355,362

2012/2013 16,410

18,301,608

22,244,957 4154811 7691

8,500 920

2,185,654

1,835,525

Total 31,668 41,616,313 49,804,259 8,399,409 9,388,785 2,571,855

TGS-NOPEC's Share 60%

5,633,271

1,543,113

NOCAL's Share 40%

3,755,514

1,028,742

1.1.6.3 In addition to these charges, TGS-NOPEC charged Anadarko Petroleum Corporation reproduction charges of 0.9% amounting to US$359,250 but

did not share same with NOCAL as stipulated in Article 1 Section 11 of the Memorandum of Understanding. NOCAL’s share of 40% of these fees

amounted to US$143,700. See table 7 below for detailed analysis.

Table 7: Anadarko Reproduction Charges (Amounts in US$)

Client KMs Data

Type

Invoice

Number Invoice Date

Fiscal

Year

Amount

Invoiced Audited Amount

Reproduction

Charges

Anadarko Petroleum Corp – 15 2243 Seismic 1910 12/5/2008 2009 1,478,969 1,492,454 13,485








Client KMs Data

Type

Invoice

Number Invoice Date

Fiscal

Year

Amount


Reproduction

Charges













39,390,730 39,749,980 359,250

Amount Due to NOCAL 143,700



Risk

1.1.6.4 Deviation from contractual agreement by TGS-NOPEC and NOCAL’s inability to identify

and remedy such deviation could deny NOCAL the necessary revenue it is entitled to.

Recommendation

1.1.6.5 Both TGS-NOPEC and NOCAL should ensure adherence to the contractual agreements.

Any deviation from and or amendment to the contract should be adequately documented

an addendum.

1.1.6.6 NOCAL should seek recovery of the revenue identified, through appropriate means, from

TGS – NOPEC.

Management Response

1.1.6.7 The GAC position assumes that reproduction charges are a “fee” subject to sharing

under Article 2 Section 7 of the contract referred to above (the “2007 Contract”). This is

not simply an accounting question, but rather a contract interpretation question. TGS

took the position that amounts it charged customers for reproduction services were

charged at cost – i.e., with a profit component – and that the TGS receipts for such

services therefore were not “fees” to be shared with NOCAL. NOCAL took the position

that these charges were a “fee” to be shared.

1.1.6.8 The 2007 Contract does not provide a clear answer to the question of whether a charge

without a profit component constitutes a “fee” for the purposes of that contract.

Therefore, the Management of NOCAL in consultation with legal counsel has decided to

further engage TGS to cede to the corporation revenue earned from reproduction

charges. However, because of the vagueness of language of the contract and coupled

with justification from TGS of additional cost incurred for reproduction, NOCAL

recognizes the challenge of demanding payment of the total amount that has been

deemed to be recoverable by TGS.


1.1.6.9 We acknowledge Management’s assertions that efforts will be made to recover the

additional revenue from TGS. We will validate Management’s assertion during

subsequent audit.

1.1.7 Revenue Sharing Ratios “3D Data – Cost Recovery”

Observation

1.1.7.1 The 3D Multi-Client Seismic Survey Project Memorandum of Understanding between

NOCAL and TGS – NOPEC Geophysical Company ASA of November 26, 2007, provides

the following definitions:

1.1.7.2 Article 1 Section 8 states that “Survey Management Fees” means the fee of 15%

management fee on the total cost of the survey which is paid proportionally by the

operators of the blocks, and is separate from the “Data Trading Fee” Block Licensing

Fee”.



1.1.7.3 Article 2 Section 7 states that Trading, Licensing, Open Block Licensing and all other fees

received by TGS-NOPEC shall be shared 40% NOCAL; 60% TGS-NOPEC.

1.1.7.4 Article 8 states “neither Party to this MOU may sell, assign, transfer or otherwise dispose

of, either in whole or part, its rights under this MOU to a third party without the prior

written consent of the other party which consent shall not be unreasonably withheld or

delayed. Any proposed sale, assignment, transfer or disposal by TGS-NOPEC or NOCAL

of all or part of her Revenue Share hereunder shall not be subject to any restrictions”.

1.1.7.5 We noted that TGS-NOPEC was required to recover the cost of survey before effecting

Article 2 Section 7 stated above.

1.1.7.6 Additionally, we noted that the total cost presented to NOCAL upon request amounted to

US$84,756,668. However, the total cost recovered by TGS-NOPEC under this

arrangement summed up to US$94,035,417 resulting to a variance of US$9,278,749.

Based on the sharing ratio presented in Article 2 Section 7 of the MOU, NOCAL’s share of

excess cost recovered by TGS-NOPEC amounted to US$3,711,500. Reference

annexure 5 for detail.

1.1.7.7 We further noted that TGS-NOPEC acquired the services of a third party (BGP) to survey

some of the areas stipulated in the MOU without the written consent of NOCAL in

contravention of Article 8 of the MOU.

Risk

1.1.7.8 Deviation from contractual agreement by TGS-NOPEC could deny NOCAL the necessary

revenue.

1.1.7.9 The acquiring of a third party without consent from NOCAL contravenes the stipulations

in the Agreement and exposes NOCAL to payment for services without prior consent and

assessment.

Recommendation

1.1.7.10 Both TGS-NOPEC and NOCAL should ensure that contractual agreements are adhered to.

1.1.7.11 NOCAL should seek recovery of the revenue from TGS – NOPEC.

Management Response

1.1.7.12 NOCAL respectfully disagrees with the conclusion that the contracts between TGS and

survey vessel operators such as BGP violated the terms of the 2007 MOU. The 2007

MOU requires TGS to obtain and market seismic data and Article 2, section 3, of the

2007 MOU clearly states that TGS will “negotiate the seismic data acquisition . .

.contracts.” Moreover, nowhere in any of the agreements between TGS and BGP

relating to the 2007 MOU is there language suggesting that TGS is attempting to give to

BGP rights that TGS has vis-à-vis its agreements with NOCAL. The language of the

agreements does not, as a matter of law, create an assignment of the right to receive

revenues. It only creates an obligation of TGS to share revenues received. Attached, as

Exhibits 1.1.7A to 1.1.7G, are the TGS agreements with BGP relating to the survey and

the cost sharing.



1.1.7.13 NOCAL understands that TGS and BGP agreed to share costs and revenues associated

with the survey conducted under the 2007 MOU with respect to Liberia offshore blocks

LB-11 and LB-12. Upon receipt of the draft management letter from the GAC, NOCAL

requested TGS to explain and demonstrate the occurrence of such cost and revenue

sharing and TGS has provided the following materials:

1.1.7.14 Attached as Exhibit 1.1.7A is a document that TGS has provided as evidence of the cost

share arrangements related to Blocks 11 and 12.

1.1.7.15 Attached as Exhibit 1.1.7B is a memorandum from TGS summarizing and explaining the

cost sharing arrangements with BGP.

1.1.7.16 Attached as Exhibit 1.1.7C and 1.1.7D are spreadsheet details setting forth detailed,

invoice by invoice analysis of the costs and the cost allocation relating to the Block 11-12

survey.

1.1.7.17 Attached as Exhibit 1.1.7E is a Power Point presentation setting forth additional

explanations relating to the data set forth in the spreadsheet

1.1.7.18 Attached as Exhibit 1.1.7F are copies of four documents that are referred to in slide 4 of

the Power Point document that provides evidence of the payment/offset of payments

among BGP and TGS.

1.1.7.19 Attached as Exhibit 1.1.7G is a letter from BGP confirming its agreement with the TGS

cost analysis.

1.1.7.20 The information listed above and attached to this response are also available in

electronic copies and can be forwarded to GAC upon request. TGS has informed NOCAL

that the spreadsheet was prepared by a consultant retained by TGS for the specific

purpose of reviewing the data provided by TGS and organizing it for presentation to

NOCAL and GAC. TGS has also advised NOCAL that it would be willing to arrange a

meeting between the consultant and a representative of the GAC at TGS’s offices to

discuss the consultant’s conclusions if that would assist the GAC in understanding the

information provided therein.


1.1.7.21 We respectfully also disagree with Management’s assertion that “no rights” were

assigned from TGS to BGP. The rights referenced in findings were survey rights

transferred to BGP from TGS NOPEC. The cost sharing arrangement between TGS and

BGP arose out of the transfer of that right of TGS to survey blocks 11 and 12 to BGP

which is in contravention of Article 8 mentioned above. NOCAL entered into a contract

with TGS to survey the blocks due, in part, to the cost efficiency associated with TGS

NOPEC’s activities. Transferring such rights to BGP without NOCAL’s consent subjected

NOCAL to paying for services in which they had little or no direct input into acquiring.



1.1.7.22 The MOUs and contract audited were read with understanding and the invoices from

TGS NOPEC’’s recalculation shows that TGS owes an outstanding amount to NOCAL. We

maintain that Management pursues TGS to recover the excess revenue. The

Management of NOCAL continuous defense of TGS on the revenue derived from the data

collected and argument that the agreements and contracts are complicated and

impractical to implement is unjustified. The contracts and agreements submitted to the

GAC are easy to interpret. We therefore maintain our recommendation that NOCAL

recover excess revenue arising from such breach of the contract.

1.1.8 Redacted Invoices

Observation

1.1.8.1 Article 10 Section 1 of the Ultra – Deep Water 2D Seismic Survey and Data Management

Project Agreement states that NOCAL or its representatives shall have the right to audit

all receipts, invoices, statements and other records of TGS-NOPEC relating to this

Agreement, with respect to any calendar year (whole or partial) during the Term of this

Agreement and any extension thereof. The audit(s) by NOCAL or its representative shall

be conducted at the expense of NOCAL during standard business hours and upon giving

TGS-NOPEC at least thirty (30) days’ notice of its election to conduct such an audit.

1.1.8.2 We observed that multiple invoices submitted for the audit files were redacted.

According to explanation provided by TGS-NOPEC, these invoices contained transactions

relating to other countries and could not expose same on the basis of the confidentiality

agreements with those countries. We further noted that TGS-NOPEC should not have

included transactions from multiple entities on the same invoices knowing that those

invoices where subject to audit.

1.1.8.3 Therefore, we could not determine whether US$34,847,296.89 of the redacted invoices

were attributable to transactions involving data obtained from blocks outside the

territorial limits of Liberia and pertained to other countries. See table 8 below and

Annexure 6 for detail.

Table 8: Summary of Redacted Invoices

Fiscal year Total # of Invoices Total Amount Not Traced to Revenue

Sharing Schedule (US$)

Prior years 7 13,381,436.82

2011/2012 14 13,943,457.29

2012/2013 9 7,238,956.78

2013/2014 1 283,446.00

Total 31 34,847,296.89

Risk

1.1.8.4 The presentation of redacted invoices to NOCAL could undermine the completeness and

accuracy assertions placed on NOCAL’s revenue generated from the TGS-NOPEC

Contract.



Recommendation

1.1.8.5 NOCAL should prevail on TGS-NOPEC to provide complete invoices to enable GAC

evaluate the accuracy of the Revenue Sharing Report.

1.1.8.6 TGS-NOPEC should provide information on sale of data and other services to NOCAL

timely upon invoicing of the client in accordance with Article 6 Section 2 (iii) of the Ultra

Deep Water 2D Seismic Survey and Data Management Project Agreement.

1.1.8.7 NOCAL should seek recovery of the revenue identified through appropriate means.

Management Response

1.1.8.8 TGS has explained that the redacted portions of the invoices refer to the licensing of

seismic data from jurisdictions other than Liberia, and that it is required to redact such

information because international oil companies do not want third parties to know the

locations for which they have purchased data. NOCAL believes that this is a

commercially reasonable position in light of the competitive conditions in the

international oil industry.

1.1.8.9 TGS has furnished NOCAL with a letter from recognized petroleum counsel in Houston

reporting that they have examined the invoices involved, and that none of the redacted

information relates to Liberia seismic data. That letter is being delivered to GAC

concurrently with these remarks (See Exhibit 1.1.8-Copy of Assurance Letter from

Gardere-International Law Offices).

1.1.8.10 NOCAL notes that in order to avoid this situation arising again, it will, going forward, ask

TGS not to include charges for non-Liberian data on invoices that cover Liberian data.


1.1.8.11 We acknowledge Management’s assertion that going forward TGS will not include

charges for non-Liberian data on invoices that do not cover Liberian data. We will

validate Management’s assertion during subsequent audit.

1.2 Asset

1.2.1 Property, Plant & Equipment (PPE)

Observation

1.2.1.1 PFM Regulation A.3 subsection 2 states that "any public officer concerned with the

conduct of financial matters of the Government of Liberia, or the receipt, custody and

disbursement of public and trust moneys, or for the custody, care and use of

government stores and inventories shall keep books or accounts and proper records of

all transactions and shall produce the books of accounts and records of the transaction

for inspection when called upon to do so by the Auditor-General, the Comptroller

General, the relevant internal auditor or any officers authorized by them, by the

Minister.”



1.2.1.2 IAS 16 Paragraph 73 (a, b, c & d) states that “The financial statements shall disclose, for

each class of property, plant and equipment:

‘(a) the measurement basis used for determining the gross carrying amount;

‘(b) the depreciation methods used;

‘(c) the useful lives or the depreciation rates used;

‘(d) the gross carrying amount and the accumulated depreciation (aggregated

with accumulated impairment losses) at the beginning and end of the

period.”

1.2.1.3 During the audit, we observed that the Management of NOCAL did not fully follow the

PFM Regulation in keeping proper records of assets procured. Additionally, records

presented on the fixed assets register as recalculated by GAC did not agree with those

presented in the Balance Sheets, Income Statements and Cash Flows. See tables 9 –

9B below and Annexure 6 for detail.

Table 9: Balance Sheets Effect - Amounts in USD

Description 2011/2012 2012/2013 2013/2014 2014/2015

NOCAL FS

Cost 1,607,366 2,656,940 4,154,102 4,260,744

Accumulated Depreciation 318,591 1,057,243 1,545,350 1,927,208

Net Book Value 1,288,775 1,599,698 2,608,752 2,333,536

GAC Recalculation

Cost 1,185,189 1,687,689 3,588,628 2,981,072

Accumulated Depreciation 403,739 819,874 1,678,302 2,110,316

Net Book Value 781,450 867,815 1,910,326 870,756

Variance (NOCAL -GAC)

Cost 422,176 969,251 565,474 1,279,672

Accumulated Depreciation (85,145) 237,369 (132,952) (183,108)

Net Book Value 507,325 731,883 698,426 1,462,780

Table 9A: Income Statements Effect - Amounts in USD

Description 2011/2012 2012/2013 2013/2014 2014/2015

NOCAL FS

Depreciation Expense 12,093 738,652 488,107 716,955

GAC Recalculation



Description 2011/2012 2012/2013 2013/2014 2014/2015

Depreciation Expense 239,609 412,739 788,633 683,431

Variance (NOCAL -GAC) (227,516) 325,913 (300,526) 33,524

Table 9B: Cash Flows Effect - Amounts in USD

Description 2011/2012 2012/2013 2013/2014 2014/2015

NOCAL FS

Capital Additions

548,457

1,049,574

2,162,705

106,642

GAC Recalculation

Capital Additions

491,165

502,500

1,700,617

27,195

Variance (NOCAL -

GAC)

57,292

547,075

462,089

79,447

Risk

1.2.1.4 The failure of the management of NOCAL to adequately maintain fixed assets register

could lead to misrepresentations within the financial statements.

Recommendation

1.2.1.5 The Management of NOCAL should ensure that fixed asset registers are adequately

maintained and agreed to the financial statements.

Management Response

1.2.1.6 The Management of NOCAL wishes to clarify that the finance division of the corporation

maintained Fixed Asset Register (FAR) for the audited period. However, management

acknowledges error in depreciation calculation in some instances, thereby resulting to

errors in depreciation estimates – a non-cash expense. Following the conclusion of the

GAC audit fieldwork, the finance division of NOCAL has restated the financial statements

for the audited years, consistent with consensus reached with the GAC on what the

appropriate depreciation estimates should be. The restated financial statements have

been signed and submitted to the GAC.


1.2.1.7 We disagree with NOCAL’s assertions that the financial statements have been restated to

reflect the findings above. The findings presented in tables 9 – 9B reflect the financial

records of the restated financial statements. Management should have put in place a

fixed asset management system that addresses the acquisition, use, control, protection,

maintenance, and disposal of the fixed assets of NOCAL. Therefore, we maintain our

recommendation.



1.2.2 Cash and Bank Reconciliation

Observation

1.2.2.1 Regulation R.3(6), PFM Regulations, stipulates that "the balance of every bank account

as shown in a bank statement shall be reconciled with the corresponding cashbook

balance at least once every month; and the reconciliation statement shall be filed or

recorded in the cash book or the reference to the date and number thereof”.

1.2.2.2 IAS 7 States that “an entity shall disclose the components of cash and cash equivalents

and shall present a reconciliation of the amounts in its statement of cash flows with the

equivalent items reported in the statement of financial position”.

1.2.2.3 During the audit, it was observed from the review of the general ledgers and bank

statements that NOCAL maintained ten (10) bank accounts with 4 Banking institutions.

1.2.2.4 Moreover, the Management of NOCAL did not prepare monthly bank reconciliations for

all of its accounts for eleven consecutive months beginning from July 1, 2011 to May 31,

2012. In the absence of reconciliation statements for the eleven months during the

period 2011/2012, management could not provide evidence that all its accounts were

fully reconciled to their respective ledgers on a monthly basis.

Risk

1.2.2.5 Failure to perform the monthly bank reconciliations could impede the timely detection of

errors and/or omissions in the cash balances.

Recommendation

1.2.2.6 The Management of NOCAL should ensure timely monitoring and supervision over the

preparation of monthly bank reconciliation as required by IAS 7 and the PFM Regulations

to help protect the entity’s resources, through uncovering irregularities over cash.

Management Response

1.2.2.7 Management notes the GAC assertion with respect to FY2011/2012 that bank

reconciliation was not done on a monthly basis per IAS 7 and R.3 (6) of the PFM Law.

However, Management is pleased to report that monthly bank reconciliation statements

have been prepared for all subsequent fiscal periods following FY2011/2012.

Additionally, the finance division has restated it financial statement for FY2011/2012 to

validate the reconciled bank balances of the corporation for that period. GAC has

received and vetted those reconciled balances and has indicated no reservation with

what is recorded and presented in the appropriate sections of the restated financial

statements.


1.2.2.8 We acknowledge Management’s assertion. However, Management’s failure to conduct

bank reconciliation on a monthly basis in FY2011/2012 is a breach of financial discipline

under A.20 of the PFM Regulation of 2009.



1.3 Expenses

1.3.1 Travel

Observation

1.3.1.1 Section 32 of the Approved GOL 2012/2013 & 2013/2014 Travel Ordinance states that:

"All public corporations and parastatal organizations shall pay per diem at the same rates

specified herein, subject to the approval of their respective Boards. The other conditions

contained herein shall be adhered to."

1.3.1.2 During the period under audit, it was observed that the management of NOCAL

approved and made several travels. However, from the review of sampled payment

vouchers, we observed no evidence of retirement for the travels made by staff and

officials of NOCAL in the total amounts of US$50,565.24, and US$47,865.96 for the

periods 2012/2013 and 2013/2014, respectively. See table 11 below for detail.

Table 11: Retirement of Foreign Travel

Date Description Voucher # Check # Amount (US$)

2012/2013

6-Dec-12 Travel Expenses 84 2879 6,732.50

30-Nov-12 Travel Expenses 246 2794 25,092.12

19-Jun-13 Travel Expenses 145 4419 18,740.62

Sub-total 50,565.24

2013/2014


8-Nov-13 Travel expenses 28 2576 29,900.00


Sub-total 47,865.96

Total 98,431.20

Risk

1.3.1.3 The failure to retire travel expenses could undermine public accountability and abuse of

public resources.

Recommendation

1.3.1.4 The Management of NOCAL should ensure that officials making travel on its behalf

comply with the Executive Travel Ordinance.

1.3.1.5 The Management should ensure that all officials who made travels on behalf of NOCAL

retire the total amounts of US$50,565.24 and US$47,865.96 disbursed as per diem and

allowances during time of travel.



Management Response

1.3.1.6 Management acknowledges the auditor’s findings, but believes that the substantive issue

of 1.4.1 is whether the corporation has in fact been adhering to the Executive Travel

Ordinance of the Government of Liberia. To this, Management is pleased to answer in

the affirmative that ALL employees making formal trips on behalf of the corporation are

required to retire their trips upon return to the country. Accordingly, we are pleased to

adduce samples of retirement forms for each of the audited years for your record to

confirm Management’s adherence to the Executive Travel Ordinance. (Exhibit 1.4.1-

Sample of past retirement forms)

1.3.1.7 With respect to the travels listed in “Table 11” above, although Management was unable

to locate the retirement forms relating to a few of those travels sampled; we cannot

conclude that those making the travels did not retire. This could be a matter of poor or

inadequate documentation and not necessarily failure on the part of the individuals to

retire. In an attempt to further clarify the doubts of the auditors, alternative procedures

were performed during the conduct of the audit on ALL of the sample travel documents

listed in “Table 11” above that confirmed that the transactions relating to those travels

were legitimate and that the trips were taken on behalf of the corporation.

1.3.1.8 Management wants to assure the GAC that NOCAL has and will continue to comply with

the relevant provisions of the Executive Travel Ordinance.


1.3.1.9 The Management of NOCAL is required to ensure that all staff members who undertake

foreign travels retire their travel advances timely. In the absence of retirement of travel

advances, the entire amount should be recovered from those who failed to submit the

travel settlement form. For those who have left NOCAL, the entity should also recover

the amount from them in line with the Travel Ordinance.

1.3.2 Consultancy Contracts not in Compliance with PPC Act

Observation

1.3.2.1 Section 68, subsection 1 of PPC Act of 2007 amended 2010 states that "For the

purposes of procuring the services of a consultant, the Procuring Entity shall prepare a

shortlist of, generally, three (3) to six (6) consulting firms as determined by subsections

(2) and (3) of this Section and, to the greatest extent feasible, comprising consultants of

the same category and similar capacity and business objectives."

1.3.2.2 Additionally, Section 68, subsection 2 of the above provision also states that " When the

estimated contract price of the procurement exceeds the Threshold established by

Regulations promulgated by the Commission, in order to establish the shortlist, the

Procuring Entity shall seek expressions of interest by Publishing a notice and, where

appropriate, placing the notice also in relevant trade publications and technical and

professional journals. The Procuring Entity shall allow at least three (3) weeks for

interested persons to reply to the request for expressions of interest unless the

Commission permits a shorter period."



1.3.2.3 During our review of sampled payment vouchers for consulting services in the amounts

of US$246,105.50, US$21,600.00, US$79,140.00 and US$68,069.00 for periods

2011/2012, 2012/2013, 2013/2014 and 2014/2015 respectively, it was observed that the

management did not provide evidence of compliance with the PPC Act during the award

of these consultancy contracts. See table 12 below and Annexure 7 for detail

Table 12: Summary of Sampled Consultancy Contracts' Payment Vouchers

Description

PERIODS Total Amount

(US$) 2011/2012

(US$)

2012/2013

(US$)

2013/2014

(US$)

2014/2015

(US$)

Consulting Services 246,105.50 21,600.00 79,140.00 68,069.00 414,914.50

Risk

1.3.2.4 The non-adherence to the PPC Act could lead to the selection of non-responsive bidder

and may deny assurance for an opened competitive procurement process.

1.3.2.5 The non-compliance with provisions of the PPC Act could lead to the selection of

unqualified contractors thereby denying NOCAL the “value” for the “money” spent on

those contractors.

Recommendation

1.3.2.6 The Management of NOCAL should ensure full adherence to the PPC Act during the

procurement of consulting services.

1.3.2.7 The Management should provide material justification why it awarded consultancy

contracts in noncompliance with the PPC Act in the amounts of US$246,566.74,

US$21,600.00, US$79,140.00 and US$68,069.00 during the periods 2011/2012,

2012/2013, 2013/2014 and 2014/2015 respectively.

Management Response:

1.3.2.8 Management notes the auditor’s recommendation with respect to full adherence to the

PPC Act during the procurement of consulting services. Management affirms that during

the audit period, it submitted its annual procurement plans to the Public Procurement &

Concession Commission, which were subsequently approved for all of its expenditure

items including consulting services. (See Exhibit 1.4.2.7A-Approved Procurement Plans)

1.3.2.9 It must be emphasized that Section 8 of the Threshold Regulations for the PPC Act

requires that “Pursuant to Section 71(2) Procuring Entities shall give at least fourteen

(14) days prior notice to the Commission of proposed awards of consulting contracts

when the estimated price of the consulting contract exceeds US$100,000. (US$200,000)

if the contract has been awarded following the solicitation of expressions of interest in

accordance with Section 68(2).”

1.3.2.10 Furthermore, to ensure that appropriate responses were provided for the observations

related to this section, the Interim Management Team reached out to the leadership of



the former NOCAL Management, that was in place during the audit period, to solicit their

comments and insights and the following information was provided by the former

Management:

Awarded consultancy services of the period 11/30/2011 to 12/31/2011 were

prior to our management period. Thus we have no feedback.

Since they were previously awarded, management agreed to continue to

honor the consultancy services of the period 5/31/2012 to 6/30/2012.

In the 2012/2013 and 2013/2014 periods, the Chie contract falls in the

previously awarded category – management agreed to continue to honor. The

contracts of the others – Jackson and Seakor – had to be awarded in a timely

manner to those individuals who were uniquely qualified for the purpose that

had urgency for the organization.

The Orion Consultancy was a uniquely specialized security based contract. It

had to be awarded in a timely manner and selectively based on the nature of

the contract. Management had run into a period where there had to be some

coordination with national security. Orion was uniquely and specifically

qualified.

In the 2014/2015 periods, again the Chie’s contract falls in the previous

awarded category – management agreed to continue to honor. The contracts

of Harrington and Maples fall again into timely execution with individuals who

were consulting on the third Bid Round based on their consultancy with

NOCAL on the Block 13 negotiations with ExxonMobil.

1.3.2.11 Management believes that the auditor’s assertion with respect to Jacob Kabakole is

incorrect. According to Article 13, Section B of the Corporate By-Laws of NOCAL, the

President & Chief Executive Officer of the Corporation has the authority to appoint all

managers of the various departments and make such rules and regulations for governing

the day-to-day affairs of the corporation. In line with this mandate, Management

granted Jacob Kabakole an employment contract. Hence, the procurement criteria as

prescribed in the PPC Act for consultancy could not have been applicable in this

particular instance. (See Exhibit 1.4.2.7C-Employment Contract for J. Kabakole).

1.3.2.12 Relative to the issue of Coastal Energy Services, the procurement process was followed,

as there is evidence that there was a competitive process where two companies’

proposals were submitted to NOCAL for consideration and Coastal Energy Service was

selected as the most responsive consultant. (See Exhibit 1.4.2.7D-Copy of Payment

Voucher & Memorandum)

1.3.2.13 Similarly, On July 6, 2009 NOCAL issued an Expression of Interest for International

Consultancy on the Exclusive Economic Zone Project. On September 22, 2009, the report

was concluded with ESL Consulting based in Accra, Ghana selected since it was the only



company that submitted a proposal. Based on the magnitude of the works, several other

amendments to the original contract were concluded between 2009 and 2012. (See

Exhibit 1.4.2.7E-Expression of Interest & Evaluation Report)

1.3.2.14 The Heritage Communication payment was a Corporate Social Relations media

awareness support project that was financed by NOCAL based on a project proposal

submitted by Heritage Communication Inc. NOCAL did not solicit the service, but

approved the proposal for funding on the strength of the proposal’s rationale to assist

NOCAL increase the media understanding of the oil and gas sector and improve media

reporting to reflect the true state of affairs of the oil sector. The key objectives of his

project proposal was to increase public understanding of the oil and gas sector and

ensure that civil society organization understand the key issues relative to the sector.

Hence, the procurement criteria as prescribed in the PPC Act for consultancy were not

applicable. (See Exhibit 1.4.2.7F-Project Proposal & CSR Funding Agreement)


1.3.2.15 Management is continuous and the relevant records should be available to support all

transactions. Therefore, the current management team should be in the position to

respond to audit queries arising from periods prior to its arrival at NOCAL. With respect

to Jacob Kabakole’s arrangement, the agreement, related payments and tax deductions

clearly show that it is a consultancy contract.

1.3.2.16 The annual procurement plan did not include the services to be provided for which the

Orion Consultancy contract was awarded. The annual procurement plan should include

provision for such service and identify adequate time for implementation. As it relates to

the awarding of contracts with specialized skills, the Management did not present letter

of “no objection” from Public Procurement Concession Commission. Therefore, we

maintain our recommendation.

1.4 Corporate Governance Issues

1.4.1 Corporate By-Laws

Observation

1.4.1.1 PFM Regulation M.12 (1) states “(1) The Board of Directors of each enterprise governed

by this Act shall ensure the efficient management of the financial resources of the

enterprise including the collection and receipt of moneys due to that enterprise or

institution”.

1.4.1.2 It was observed during the conduct of the audit that the Corporate By-Laws of NOCAL

adopted 2004 has several provisions which undermines the practice of good corporate

governance and the efficient management of NOCAL’s resources. For example, Article 6

Paragraph 2, states “The Board may by resolution authorize the payment of fees,

stipends, honoraria, travel or other allowances to Directors for attending meetings of the

board and or traveling in the interests of the corporation. Nothing herein contained



should be construed to preclude any Director from serving the Corporation in any

capacity and receiving compensation thereof, provided there is no obvious conflict of

interest.”

Risk

1.4.1.3 Corporate by-laws that bestow upon the Board of Directors multiple benefits and allow

Directors to perform additional service for fees could lead to conflict of interest.

Recommendation

1.4.1.4 The Board of Directors of NOCAL should review the Organization’s corporate By-laws to

ensure that it conforms to current legal environment and sound corporate governance

practices.

Management Response

1.4.1.5 The Management of NOCAL takes notes of the risks identified by the GAC regarding the

2004 NOCAL By-Laws. NOCAL assures the GAC that the corporation is currently drafting

new corporate by-law that are consistent with the Business Corporations Act, the NOCAL

Act 2016, and other applicable Liberian Law for consideration and adoption by the

NOCAL Board of Directors.

1.4.1.6 NOCAL wishes to confirm that at no time during the audit period did any Director of the

Board serve in any other capacity or receive salary or additional fees for services

rendered in another capacity. NOCAL further confirms that all travel costs, including

subsistence allowances for Directors traveling on behalf of NOCAL were in compliance

with the official Government of Liberia travel policy.


1.4.1.7 We acknowledge Management’s assertion that NOCAL is currently drafting a new

corporate by-law that is consistent with the Business Corporations Act of 2016. We will

validate Management’s assertion during subsequent audit.

1.5 Compliance Issues

1.5.1 Fuel usage log for Generator

Observation

1.5.1.1 PFM Regulation A.3 subsection 1 states that "Any public officer concerned with the

conduct of financial matters of the Government of Liberia, or the receipt, custody and

disbursement of public and trust moneys, or for the custody, care and use of

government stores and inventories shall keep books of accounts and proper records of

all transactions and shall produce the books of accounts and records of the transactions

for inspection when called upon to do so by the Auditor-General, the Comptroller

General , the relevant internal auditor or any officers authorized by them, by the

Minister.”



1.5.1.2 During the audit, it was observed that the Management of NOCAL did not provide

evidence of fuel usage log for generator in the amount of US$502,206.37 for the

period 2011/2012.

Risk

1.5.1.3 Management‘s failure to provide fuel usage log could lead to misapplication of the

entity’s fuel.

Recommendation

1.5.1.4 The Management of NOCAL should produce substantive justification backed by material

evidence for spending US$502,206.37 on generator fuel without the maintenance of a

fuel usage log.

1.5.1.5 Going forward, NOCAL Management should prepare a daily generator fuel receipt and

consumption log that will track the daily usage of fuel. Also, Management should

establish adequate internal control over receipt, distribution and consumption of fuel.

Management Response

1.5.1.6 NOCAL acknowledges the findings of the auditors but believes that the conclusion

reached by the auditors with respect to the issues raised after their review of sample

vouchers and amounts spent on generator fuel for the audited period is incorrect.

1.5.1.7 First, the sample vouchers that the auditors reviewed did not indicate that NOCAL spent

US$502,206.37 on generator fuel. To the contrary, the US$502,206.37 relates to fuel

and gasoline affecting the following categories:

US$434,713.08 of the voucher’s sampled represents monthly fuel benefits to

employees of NOCAL from July 2011 to June 2012.

US$39,913.95 represents fuel allowance to members of the Board of Directors

from July 2011 to June 2012.

US$22,283.37 represents fuel purchased for utility vehicles for the corporation.

1.5.1.8 Hence, only US$8,950 of the total amount of US$502,206.37 was spent on fuel for the

corporation’s generator and said expenditure was appropriately accounted for through a

monthly fuel utilization report. (See Exhibit 1.6.1 – Vouchers and Excel Spreadsheet

including list of employees and Members of the Board and quantity of fuel allowance per

month).


1.5.1.9 NOCAL’s general ledger shows US$502,206.37 (GL 050400) as Fuel – Generator.

Additionally, the evidence presented by Management shows how monthly fuel was

distributed but there was no evidence that the employees and board members signed for

the fuel. Further, Management provided no generator usage log as evidence that the

fuel was used for the intended purpose. Therefore, Management should be held

accountable for the fuel.



1.5.2 Award of Geophysical Services

Observation

1.5.2.1 Section 46 (1 & 3) of the amended and restated PPC Act. 2005 states that "(1) Public

procurement shall be undertaken by means of advertised open bid proceedings, to which

equal access shall be provided to all eligible and qualified bidders without discrimination,

subject only to the exceptions provided under this Part for particular methods of

procurement.' '(3) Procuring Entities may use only those methods of procurement

authorized by this Act. If a Procuring Entity uses a method of procurement other than

advertised open competitive bidding, it shall note in the record of the procurement

proceedings the grounds for the choice of the procurement method."

1.5.2.2 During the audit, it was observed that the Management of NOCAL and TGS-NOPEC

Geophysical Company ASA, entered into separate memoranda of understanding on

November 26, 2007, August 4, 2009 and January 14, 2013 for the conduct of a 3D

Multi-Client Seismic Survey Project, where TGS-NOPEC will acquire geophysical data

offshore Liberia; of Ultra Deep-Water 2D Seismic Survey and Data Management Project

offshore Liberia and the Acquisition, Processing, Interpretation, and Marketing of 3D

Seismic Data.

1.5.2.3 Further, the Agreement mentioned that NOCAL conducted a competitive bidding process

in accordance with the PPC Act; however, there was no evidence provided by the

management during the conduct of the audit supporting such assertion.

1.5.2.4 Additionally, NOCAL did not provide evidence in a form of communication from the Public

Procurement and Concession Commission permitting "No Objection" for NOCAL to single

source the services of TGS-NOPEC in 2013, since they had prior MOUs in 2007 and 2009.

Risk

1.5.2.5 The failure to uphold and comply with the PPC Act undermines government’s agenda for

the achievement of transparency and accountability in public procurement.

Recommendation

1.5.2.6 The Management of NOCAL should provide material justification why the PPC Act was

not adhered to during the consummation of the memoranda of understanding with TGS-

NOPEC for the conduct of the 3D Multi-Client Seismic Survey Project, where TGS-NOPEC

would acquire geophysical data offshore Liberia; the Ultra Deep-Water 2D Seismic

Survey and Data Management Project offshore Liberia and the Acquisition, Processing,

Interpretation, and Marketing of 3D Seismic Data.

1.5.2.7 The Management of NOCAL should uphold and comply with the PPC Act during the

award of procurement contracts.

Management Response

1.5.2.8 To ensure that appropriate responses were provided for the observations related to this

section, the Interim Management Team reached out to the leadership of



the former Management that was in place during the audit period to solicit their

comments and insights and the following information was provided by the former

Management:

1.5.2.9 The NOCAL-TGS partnership for acquiring seismic surveys for the benefit of Liberia goes

back to the MOUs of 2007 and 2009, which GAC acknowledges in 1.6.2.2. Liberia,

through NOCAL gained hundreds of millions United States Dollars valued at

approximately US$68Million over a 9 year period and from which NOCAL contributed

approximately US$37Million to the Government Budget beginning FY2012/2013 to

FY2014/2015.

1.5.2.10 The nature of the NOCAL-TGS partnership commenced at a time that TGS was the only

company willing to take a chance with NOCAL by putting up all of the costs upfront to

conduct the seismic survey and even provide training for employees of NOCAL. In

consideration of taking up this significant risks, the Management of NOCAL in 2007 and

2009 signed contracts with TGS that committed NOCAL to use TGS in the marketing and

licensing of the Liberia’s seismic data with the agreement that TGS would recover it cost

over the period of the agreement and that NOCAL would received financial benefits from

the licensing of the data as well as specialized knowledge from TGS.

1.5.2.11 Hence, considering the prefunding nature and risks associated with this undertaking, it

may have been impractical for the past Management to conduct a competitive bidding

process prior to the signing of various MOUs with TGS. Additionally, because

subsequent management inherited a contractual relationship that had a fixed duration

for a highly specialized project and services, it became unfeasible to have terminated the

existing MOUs and commence a competitive bidding process. The cost of taking such an

action, coupled with the legal, technical, and financial ramifications of finding another

seismic provider in a reasonable time far exceeded the benefit of taking such action.

Therefore, Management has been constrained and for all practical purposes continued

the relationship with TGS.

1.5.2.12 The Management could not verify the reference made in 1.6.2.3 that NOCAL conducted

a competitive bidding process. We think that observation may have been noted in error.


1.5.2.13 The NOCAL Management should have obtained a No Objection from the PPCC to hire the

services of TGS given the nature of the transaction. Therefore, NOCAL Management is in

breach of the PPC Act by awarding the contract to TGS without reference to the PPCC

for which it should be held accountable.

1.6 Control Issues

1.6.1 Internal Control Weakness

Observation

1.6.1.1 Article 6 Section 4 of the Ultra – Deep Water 2D Seismic Survey and Data Management



Project Agreement says that TGS-NOPEC shall be responsible for collecting all New Data

License and Viewing Fees due under each New Data License. Within thirty (30) days

following receipt of payment from a Licensee, TGS-NOPEC shall deliver to NOCAL a

statement setting forth the type and amount of the New Data License and Viewing Fees,

together with payment amount due to NOCAL pursuant to Section 6.1 of the same

agreement.

1.6.1.2 Additionally, according to Article 7 Section 2 subsections (iii) and (vii) of the Ultra – Deep

Water 2D Seismic Survey and Data Management Project Agreement,

TGS-NOPEC shall negotiate the New Data Licenses. Copies of New Data

Licenses invoices will be provided to NOCAL.

Provide NOCAL with updated revenue received, inventory of the quantity,

content and form of data acquired, including regular reports, maps, lines of

travels, shot points, types of displays, etc. and current prices thereof.

1.6.1.3 In terms of Article 2 Section 3 (iii), TGS-NOPEC shall, with NOCAL, negotiate the seismic

data acquisition & processing contracts.

1.6.1.4 During the performance of our audit procedures, we observed several control

weaknesses in the implementation of the profit sharing agreements between TGS-

NOPEC and NOCAL.

1.6.1.5 No evidence of NOCAL discussion of varying prices, seasonal effects and discounts

provided to customers.

1.6.1.6 No evidence, with respect to the “Cost Recovery” associated with the 3D project that

TGS-NOPEC provided cost data including invoices for NOCAL record during the survey.

1.6.1.7 No evidence that NOCAL monitored the recovery of cost listing provided.

Risk

1.6.1.8 Failure to design and effectively monitor internal control system could expose NOCAL to

loss of significant revenue.

Recommendation

1.6.1.9 The Board must ensure that management establishes proper mechanism to monitor

controls over the revenue sharing process.

Management Response:

1.6.1.10 With respect to the auditors’ observations regarding “Internal Control Weakness,”

Management wishes to provide the clarifying comments as below:

1. The prices at which seismic data can be licensed depend on the nature of the

area covered by the data – onshore; offshore; offshore deep water; offshore

ultra deep, and the level of demand from international oil companies for new oil

reserves. The areas of likely interest in Liberia today are principally offshore in



the deep and ultra deep categories. These are the most expensive areas in

which to drill, and at a time of lower oil prices they are areas in which oil

companies will be relatively less interested. The prices for seismic data licensing

also depend on whether oil has been discovered in similar geological formations

in the same general area. No commercial oil discoveries have yet been made in

Liberia. Therefore no meaningful statement can be made about expected future

prices for Liberian seismic data.

2. Disclosures about seasonal effects are inappropriate because licensing of

seismic data is primarily a function of the decisions of the Government on

offering oil exploration rights to the industry.

3. In the absence of meaningful fixed prices or published prices for seismic data,

the concept of discounts is not meaningful.

1.6.1.11 NOCAL had audit rights under the 2004 agreement with TGS (section 12), the 2006 Well

Log agreement (section 5(b)(ii)), the 2009 Ultra Deep 2D agreement (section 10), the

2013 3D Agreement covering Blocks 1-5 (article VII), and the 2013 extension of the

2007 MOU (section 7). NOCAL acknowledges that the 2007 MOU did not contain an

audit right.

1.6.1.12 While it is normal practice to have an audit right, and NOCAL erred in the case of the

2007 MOU (an error that occurred many years prior to the period covered by the current

GAC audit of NOCAL), NOCAL does not agree that the presence of an audit right mean

that the supplier must provide cost invoices to NOCAL independent of the exercise of

NOCAL’s audit right. Further, it is not normal practice in the industry to require cost

invoices to be furnished outside of the context of the conduct of an audit.

1.6.1.13 NOCAL also points out that although there have been a number of questions about the

TGS accounting practices in connection with the administration of the contracts

enumerated above, none of them have related to allegations that invoices submitted did

not represent costs actually incurred. The disagreements have involved issues of

contract interpretation (what revenues are subject to sharing), or revenue side issues

(whether the proper sharing ratios have been applied to revenues received).

1.6.1.14 NOCAL acknowledges that up to the time of the recent PwC audit, NOCAL has not

effectively exercised its audit rights, and that in the future it should be more diligent in

the exercise of this right.

1.6.1.15 However, NOCAL does not agree that prudent management requires that, in the absence

of some reason to suspect that TGS is claiming unsubstantiated costs, TGS should be

required to submit to NOCAL on a regular basis each cost invoice received by TGS. Even

an outside auditor called upon to certify a company’s financial statements will normally

deliver its audit opinion based on a sampling of invoices and other general ledger data

unless the auditor finds some reason to seek a more detailed review.




1.6.1.16 The Management of NOCAL should have exercised prudence in administering the

contracts or MOUs entered on behalf of the Government of Liberia with TGS-NOPEC

Geophysical, Company ASA (TGS) to include effective monitoring. Article 7 “Work Plan

for the New Data Acquisition” and Item 7.2 states that “TGS shall act as project manager

for the New Data Survey Project (s) and provide the following services on exclusive basis

of the Term of this Agreement”. In particular, one of the items that would be provided

per 7.2 (vii) “updated revenue received, inventory of the quantity, content and forms of

data acquired, including regular reports, maps, line of travels, short points, types of

displays, etc. and current prices thereof.”

1.6.1.17 Our stance is that there was no effective monitoring by NOCAL to make sure that TGS

complied with the terms of agreements and/or MOUs entered so that the Government of

Liberia obtained maximum value (contract interpretations, revenues, etc.) of contracts

entered. Therefore we maintain our recommendation.

1.7 Physical Verification

1.7.1 Projects Implemented by Implementing Agencies and Institutions

1.7.1.1 The Corporate Social Responsibility Policy of NOCAL under the sub caption “Social

Welfare Program (SWP)” states that “This policy places NOCAL’s commitment of

protecting the environment, upliftment of education, health and socio-economic

development as a topmost priority. All-round development of education, rural

infrastructure, primary health care, environmental protection, promotion of

sports/sportsperson, assistance welfare to youth and women organization in carrying out

community development activities are some of the key areas to be covered under “Social

Welfare Program.”

1.7.1.2 Additionally, the policy also requires that the community development scheme is aimed

at supporting the various socio-cultural activities in future areas of exploration in Liberia.

The scheme will cover the construction of roads, setting up of educational institutions

and primary health centers in the communities affected by oil explorations and other

operational areas of the company.

1.7.1.3 During the audit, we observed that the management of NOCAL through its Corporate

Social Relations Division awarded social contribution to several individuals, institutions

and communities for the construction of clinics, schools, bus terminals, housing units,

provision of laboratory equipment, etc.

1.7.1.4 During the audit, we conducted physical inspection of sampled projects sponsored by

NOCAL under its corporate social responsibility in the amounts of:

US$809,783 - Completed

US$273,533 - Incomplete

US$148,098 - Abandoned



The status of each of the projects was established during the inspection. See tables 15

– 15B below for detail.

Table 15: Sample of Completed Projects Inspected

Period Beneficiary/ Payee Description of

Project

Payment

(US$) Status /Comment

2011/2012 National Housing

Authority

Sanniquellie Low

Income Housing

Sewage System

60,000.00 Sewage system

complete

2012/2013 Ministry of Education Science Lab Projects 293,902.00 Complete, but not in use


2013/2014 National Transit

Authority/ Atlantic

Engineering &

Construction Company

Business Terminal,

Gbarnga

142,533.36 Complete, but not in use


Total 809,783.36

Table 15A: Sample of Incomplete Projects Inspected

Period Beneficiary/ Payee Description of

Project

Payment

(US$)

Status /Comment


Authority

Buchanan Low

Income Housing

Sewage System


incomplete


Authority

Voinjama Low

Income Housing

Sewage System


incomplete

2013/2014 National Transit Authority/

Atlantic Engineering &

Construction Company

Business Terminal,

Bo Waterside

142,533.36 Incomplete

Total 273,533.36

Table 15B: Sample of Abandoned Projects & Equipment’s Inspected

Period Beneficiary/ Payee Description of Project Payment

(US$) Status /Comment

2011/2012 National Housing Authority 100 KVA Generator for

Voinjama Low Income

Housing Units

20,900.00 Unknown -NHA

could not provide

whereabouts of

generator

2013/2014 Grand Kru Development

Union

Ten (10) Bedroom Clinic 34,500.00 Abandoned

2013/2014 National Transit Authority/

Dougbor Group

Incorporated

Business Terminal, Kakata 92,698.41 Abandoned

Total 148,098.41



Risk

1.7.1.5 The failure to utilize these assets by the intended beneficiaries could result to rapid

deterioration of them resulting to waste of government resources.

1.7.1.6 The failure of implementing agencies or institutions to fully implement the projects could

lead to the objectives of the projects not being met.

1.7.1.7 The failure of implementing agencies or institutions to account for resources could result

in the loss of government resources.

Recommendation

1.7.1.8 The Management of NOCAL should prevail upon the implementing agencies and

institutions to provide justification for the lack of use of the completed projects and

moreover.

1.7.1.9 The Management of NOCAL should prevail upon the implementing agencies and

institutions to ensure completion of all incomplete projects during the periods under

audit.

1.7.1.10 The Management of NOCAL should recover the full amounts of US$34,500.00 and

US$92,698.41 disbursed to the Grand Kru Development Union and the Dougbor Group

Incorporated, respectively, for the abandonment of the construction of the clinic in

Wropluken, Forkpoh District, Grand Kru County and the Bus Terminal in Kakata, Margibi

County.

1.7.1.11 Additionally, NOCAL should prevail on the National Housing Authority to provide the 100

KVA generator procured for use at the Voinjama Low Income Housing Units.

1.7.1.12 Going forward the Management of NOCAL should ensure that all current and future

MOUs entered into by NOCAL and other organizations should be officially communicated

to the County’s authorities so that they should be aware of projects being implemented

in areas within their jurisdictions.

Management Response

1.7.1.13 According to Article 2 of the Memorandum of Understanding (MOU), captioned “Scope of

the MOU, Roles and Responsibilities, signed by and between NOCAL and beneficiaries,

NOCAL only served as FUNDING Agency and required the relevant implementing

agencies to fully complete and utilize the projects as was agreed in their respective

contracts. Given this background, NOCAL herein provide the following comments:

a) Completed but not in use: Management acknowledges that it has fully

funded the projects listed in Table 15 above and the implementing partners have

successfully completed the works. Reference to the implementing partners listed

in Table 15 above, management is in the process of writing the Ministry of

Education and National Housing Authority to raise the issues observed by the

auditors. To date, management has written a follow-up letter to the National



Transit Authority, (NTA). In response to NOCAL’s letter, the management of NTA

indicated that it has not optimized the facilities due to the inaccessibility of the

access roads to the stations. For instance, the access road to the Gbarnga

terminal requires the construction of a mini-bride to ensure smooth operations

especially during the rainy season while the Bo Waterside terminal would require

the construction of a retaining wall to mitigate the overflowing of the Mano River

into the station during the rainy season. (See Exhibit 1.8.1.4A-NTA Report)

Management would immediately engage the Ministry of Education and National

Housing Authority and would provide updates in subsequent audit.

b) Incomplete Projects: Management notes the auditor’s findings relative to the

projects listed in Table 15A above. As confirmed by the auditors, the housing

facilities have been fully completed with the exception of the sewage systems;

hence, NOCAL would work with the NHA and the contractor to ensure that the

projects are fully completed as required per the MOUs. Reference to the Bo-

Waterside bus terminal project, the final report from NTA showed that the

terminal was fully completed over two years ago. However, the building is being

undermined by erosion resulting from over flooding of the Mano River, which

occurred over for three consecutive rainy seasons. (See Exhibit 1.8.1.4A-NTA

Report)

c) Abandoned Projects: Management wants to state that the absence of the

generator at the project site does not suggest that the project was not completed

over two years ago. In fact, the auditors confirmed that NOCAL delivered the

generator at the project site but was allegedly removed by personnel of NHA.

Nevertheless, NOCAL would engage NHA to provide the status of the generator

purchased and revert to the GAC in subsequent audit.

1.7.1.14 With regards to the ten (10)-bedroom clinics in Grand Kru County, NOCAL wrote the

Chairman of Grand Kru Development Union (GKDU) to provide updates on the project.

The GKDU responded to NOCAL and provided a report supported by pictures of the

proposed building. The report highlighted that the foundation was completed but due to

the deplorable road conditions the project was delayed. According to the report, a letter

dated August 29, 2014 was sent to NOCAL to provide the balance funds to complete the

project but NOCAL declined due to limited funding in 2015. Hence, the project was

abandoned until December 2016, when the GKDU engaged the county caucus to secure

funding through the Legislative Support Program to recommence the project. The

project has commenced and was awarded to a company under LACE supervision.

1.7.1.15 Relative to the Kakata bus terminal, it was observed that first phase was completed and

amount disbursed for the second phase. According to the contractor, the Ebola Virus

Disease (EVD) outbreak in 2014 left its project manager dead, which caused it to

abandon the project site and materials. Hence, the second phase could not be fully

completed. In furtherance of NOCAL’s follow-up, a meeting was held between with the



contractor, in which the contractor expressed his willingness to continue with the project

and pleaded with NOCAL to amend the expiration date of the contract in order to secure

external funding against the outstanding value of the contract and complete the second

phase. (See Exhibit 1.8.1.4B-Reports-GRDU/Dougbor Construction)


1.7.1.16 We acknowledge Management’s assertion on the above findings that it has begun taking

steps in ensuring that completed projects are utilized and that contacts have been made

with the relevant authorities in ensuring the re-commencement and completion of

abandoned and incomplete projects. However, it is suggested that in future, prior to

implementing corporate social responsibility projects, the Management should conduct

surveys along with the implementing partners to get the community involvement in the

selection of the projects. This would ensure that the projects are needed and can be

sustained to avoid waste of resources.

1.7.2 Land

Three Acres of Swamp Land in Oldest Congo Town

Observation

1.7.2.1 During the performance of our audit procedures, we noted that NOCAL acquired a three

(3) acre plot described on a transfer deed dated 26th day of June 2013 and located in

the Sophie Community, Tubman Boulevard, Oldest Congo Town, Montserrado County,

for the total amount of Seven Hundred Thousand United States Dollars

(US$700,000.00).

1.7.2.2 During the field verification on 16 December 2016, we observed that the 3 acre plot was

partly swampy. See photo 1 below for detail

Photo 1: Partial view of the NOCAL’s Swamp Land in Sophia, Congo Town, behind Kailondo Gas Station



Seven Acres of Land Procured Along the Robertsfield Highway

1.7.2.3 Further we observed that a warranty deed, dated 23rd day of July 2014, was issued to

the National Oil Company of Liberia for the acquisition of seven (7) acres of land,

situated along the Roberts Field High-Way, Schiefflin Township, Margibi County.

Furthermore, the valued of the land was twenty seven thousand United States Dollars

(US$27,000.00).

1.7.2.4 Further, during the field verification, we observed that the 7-acre plot described above

appeared to have been encroached upon.

1.7.2.5 The inspection revealed that NOCAL’s Management did not appear to have regularly

monitored or inspected the land to detect and discourage encroachment.

Risk

1.7.2.6 The failure of the NOCAL’s Management to safeguard its asset could lead to waste of

public resources.

Recommendation

1.7.2.7 The management of NOCAL should provide justification for purchasing a partly swampy

land for $700,000.

1.7.2.8 The Management should ensure that regular inspections of all plots of land are carried

out to avoid theft and encroachment.

1.7.2.9 NOCAL’s Management should seek legal redress in order to repossess its seven acres of

land encroached upon and ensure that the land is resurveyed and all existing structures

are demolished and cornerstones erected.

1.7.2.10 Going forward, NOCAL’s Management should properly secure the lands by either building

fences around them or installing large cornerstones as well as placing “No Trespassing”

signs to deter encroachers.

Management Response

1.7.2.11 Management is pleased to confirm the auditor’s observation that the land was acquired

for US$700,000. The underlying economic decision to purchase the property predates

the current Interim Management Team (IMT) and its members; hence, the IMT has

reached out to the previous Management and solicited the clarifying comments and

justification, which they provided as follow:

1. The label used by GAC that the land is “swampy” is inappropriate. GAC has not

provided any evidence in the form of a technical evaluation report of the land to

validate its assertion. The official DEED received by NOCAL from the owner of

the land in its description does not make any reference to swampland. We think

GAC used of the phrase “swamp land” is intended to generate sensation around

the purchase of the land and not speak to the facts.



2. The Board and the Management specifically targeted this property as ideally

located to construct the NOCAL Office Building Complex.

1.7.2.12 With respect to the GAC specific recommendations, beginning 2016, Management of

NOCAL has taken several corrective measures including recognizing the land acquisition

in its restated financial statements, the inclusion of the land in the Fixed Assets Register

(FAR) of the corporation and has instructed the designated unit within NOCAL follow

through with the auditor’s recommendation as stipulated under (1.8.2.8, 1.8.2.9, and

1.8.2.10). NOCAL does not agree with the recommendation of (1.8.2.7), in the absence

of incontrovertible evidence from the GAC that the land is “swampy.”


1.7.2.13 A letter addressed to NOCAL’s former CEO Dr. Randolph A. K. W McClain from the

Environmental Protection Agency dated 21 August 2014 confirms GAC observation that

“the parcel of Land identified in your project document is part of a major wetland

ecosystem that extends from behind the German Embassy continuing towards the

Catholic Hospital”. The communication further stated that “NOCAL should submit a

“flood migration plan” an indication that the property is wetland. Therefore, GAC’s

description is not intended to generate sensation but provides an accurate description of

the property which is supported by the EPA communication to NOCAL.

1.7.2.14 We acknowledge management’s assertion that the cost of the land has been

appropriately classified and have been included in the Fixed Assets Register. .

1.7.3 Unverified Vehicle Assets

Observation

1.7.3.1 PFM Regulations A.3. sub-regulations( 1,2 & 3) states that (1) “Any public officer

concerned with the conduct of financial matters of the Government of Liberia, or the

receipt, custody and disbursement of public and trust moneys, or for the custody, care

and use of government stores and inventories shall keep books of accounts and proper

records of all transactions and shall produce the books of accounts and records of the

transactions for inspection when called upon to do so by the Auditor- General, the

Comptroller General , the relevant internal auditor or any officers authorized by them, by

the Minister.”

1.7.3.2 During the conduct of physical inspection of NOCAL’s vehicles, it was observed that 5

vehicles w US$201,200.00 could not be verified. See table 16 below for detail

Table 16: Listing of Unverified Vehicles N0. ACQUISITION

DATE

ASSETS DESCRIPTION Serial No. ACQUISITION

COST (US$)

2011/2012

1 6-May-12 Chevrolet Captiva SUV 2011 KL1FC5EF1AB-121919 36,000.00

Sub-total 36,000.00



N0. ACQUISITION

DATE

ASSETS DESCRIPTION Serial No. ACQUISITION

COST (US$)

2012/2013

2 3-Jun-13 Chevrolet Captiva SUV, Automatic KL1FC5CUOCB-092854 43,200.00

3 3-Jun-13 Renault Duster 4x4 VF1HSRC8N48255132 26,000.00

Sub-total 69,200.00

2013/2014

4 6-May-14 Toyota MHFYX59GOE8055623 48,000.00

5 6-May-14 Toyota MHFYX59GXE8055869 48,000.00

Sub-total 96,000.00

Total 201,200.00

Risk

1.7.3.3 The failure of the Management to regularly monitor and inspect fixed assets procured

may create an opportunity for individuals using these assets to divert them into personal

use, thus resulting in the loss of public resources.

Recommendation

1.7.3.4 The Management of NOCAL should update its fixed assets listing by ensuring they are

complete and accurate.

Management Response

1.7.3.5 Management notes the recommendation and herein affirms that the Fixed Asset Register

(FAR) listing has been updated and vetted by the Internal Audit Agency and GAC. The

updated FAR has been included in the restated financial statements. The vehicles noted

above are assigned to current officers at NOCAL and are available for verification.

(Please see EXHIBIT 1.8.3. Pictures of Vehicles)


1.7.3.6 We acknowledge Management’s assertion that the fixed assets register has been

updated to align with the general ledger. However, we note that no adjusting entry was

proposed and made for the purpose of correcting the misstatements of fixed assets in

the financial statements. We also acknowledge the existence of the vehicles.



PRIOR YEAR AUDIT MATTERS NOT IMPLEMENTED

No.

Source of the finding

[Auditor General’s Report on

the Audit of the National Oil

Company of Liberia for the

periods 2008 to 2011]

Particulars of

paragraph

Prior Year Recommendations Not

Implemented

1 Management Failure to Report

Account Receivable

Paragraph 2.5.2.5 &

2.5.2.12

NOCAL's Management did not provide

information regarding follow-up with TGS-

NOPEC relative to the litigation involving the

US$6,000,842 and outcome of the follow-up

in its subsequent audit.

2 Revenue sharing ratio "Old

Data"

Paragraph 2.5.3.2 to

2.5.3.4; Page 14

The Management of NOCAL did not provide

evidence in the form of Board authorization

for the amendment of the contractual

agreement from 65%, NOCAL and TGS-

NOPEC 35% to 60% NOCAL and TGS-

NOPEC 40%.

As a result of the change in the sharing

ratio, NOCAL did not received US$272,296

in revenue.

3 Revenue Sharing ratios “New

Data "

Paragraph 2.5.4.5 &

2.5.4.6


material evidence to substantiate TGS-

NOPEC’s non-adherence to the August 2009

revenue sharing ratio agreement which

should have led TGS-NOPEC recovery of its

initial investment beginning with the first

sale made under the new agreement.

NOCAL should have received

US$31,737,685 instead of US$8,002,507

thus leaving a variance of US$23,735,178.

The Management did not also provide audit

report on the audit of TGS-NOPEC which

was conducted by Pricewaterhousecoopers

to the GAC during its subsequent audit.

4 2D PSDM Reprocessing Fee

Applied by TGS-NOPEC

Paragraph 2.5.5.2 &

2.5.5.6

The NOCAL's management did not provide

evidence to support the basis for which

TGS-NOPEC withheld US$400,000 as data

reprocessing fee for 2D PSDM.


audit report of TGS-NOPEC to verify the

outstanding amount of US$400,000 as

asserted by management in its response in

the prior year report.



PRIOR YEAR AUDIT MATTERS NOT IMPLEMENTED

No.

Source of the finding

[Auditor General’s Report on

the Audit of the National Oil

Company of Liberia for the

periods 2008 to 2011]

Particulars of

paragraph

Prior Year Recommendations Not

Implemented

5 Old and New Data Work Plans

and other Provisions

Paragraph 2.5.7.2 to

2.5.7.7


evidence of the following to the GAC:

1. Provide assistance to establish state of

the art storage facility;

2. Old and New Data marketing plans;

3. Third party companies or clients to be

targeted for licenses; and

4. Plans, specifications and designs for

the data storage facility.

6 NOCAL’s waiver of its share of

US$1,000,000.00 invoice to

China National Offshore Oil

Company

Paragraph 2.5,8.2 &

2.5.8.8


evidence of Board authorization for the

waiver of its share of 65% of an invoice

amount of US$1,000,000 to China National

Offshore Oil Corporation.

7 Accounts Payable Paragraph 2.5.9.1 to

2.5.9.5

NOCAL's Management failed to disclosed

account payable during the periods

2009/2010 and 2010/2011 in the amount of

US$120,912 and US$32,197 respectively in

its financial statements.

Additionally, Management of NOCAL did not

provide evidence of proposed audit

adjusting entries.



2 ANNEXURE



Annexure 1: LIBERIA 2D PSDM REVENUE SHARING/150542

July 2008 through Sep 2015

Client KMs Data

Type

Invoice

Number

Invoice

Date

Fiscal

Period

Invoice

Amt

% GAC Rx -

65%

TGS CAL Variance

License Fees

Collected:

Chevron U.S.A.

6,090.71 Seismic 0002878 27/01/2010 2010

239,743 10% 155,833 23,974

131,858

Anadarko 4,543.46 Seismic 0003044 31/03/2010 2010

181,739 10% 118,130 18,174

99,956

Anadarko 893.19 Seismic 0003044 31/03/2010 2010

22,963 10% 14,926 2,296

12,630


12,657 60% 8,227 7,594

633


4,078 60% 2,651 2,447

204

Nexen 3,476.25 Seismic 0003028 31/03/2010 2010

104,288 60% 67,787 62,573

5,214

Chevron 6,090.71 Seismic 0003066 31/03/2010 2010

64,793 60% 42,115 38,876

3,240

Talisman 2,281.05 Seismic 0003593 28/12/2010 2011

205,294 60% 133,441 123,176

10,265

Nexen 50.14 Seismic 0003606 13/12/2011 2012

2,131 60% 1,385 1,279

107

Lukoil

Overseas West

Project

3,315.19 Seismic 0003749 21/02/2011 2011

165,759 60% 107,743 99,455

8,288

Chevron USA 3,291.56 Seismic 0003613 31/12/2010 2011

296,241 60% 192,557 177,745

14,812

Petrobras 5,492.36 Seismic 0003817 30/03/2011 2011

219,695 60% 142,802 131,817

10,985

Nexen

Petroleum

International

(003)

2,091.75 Seismic 0003880 12/05/2011 2011

104,588 60% 67,982 62,753

5,229





Client KMs Data

Type

Invoice

Number

Invoice

Date

Fiscal

Period

Invoice

Amt

% GAC Rx -

65%

TGS CAL Variance

Amerada Hess

(025)

9,382.28 Seismic 0004085 31/08/2011 2012

375,291 60% 243,939 225,175

18,765

Dana

Petroleum

(002)

2,680.16 Seismic 0004204 09/11/2011 2012

125,968

60%

81,879 75,581

6,298

African

Petroleum

Corporation

(006)

400.00 Seismic 0004295 22/12/2011 2012

16,000

60%

10,400 9,600

800

African

Petroleum

Corporation

(006)

400.00 Seismic 0004796 09/07/2012 2013

6,353

60%

4,129 3,812

318

Talisman (006) 491.70 Seismic 0004283 20/12/2011 2012

24,585

60%

15,980 14,751

1,229

Kosmos Energy

(003)

3,315.30 Seismic 0004484 28/02/2012 2012

165,765

60%

107,747 99,459

8,288

Kosmos Energy

(004)

1,309.91 Seismic 0004690 25/05/2012 2012

52,397

60%

34,058 31,438

2,620

Talisman (007) 261.68 Seismic 0004283 29/03/2012 2012

13,084

60%

8,505 7,850

654

Tullow (006) 975.60 Seismic 0004667 16/05/2012 2012

39,024

60%

25,366 23,414

1,951

Apache Angola

(001)

4,969.35 Seismic 0004773 28/06/2012 2012

236,044

60%

153,429 141,626

11,802

BHP Billiton

Petroleum

(025)

65.59 Seismic 0004613 25/04/2012 2012

3,279

60%

2,132 1,968

164

Kosmos (SUP

007)

2,144.18 seismic 0004877 31/08/2012 2013

85,767

60%

55,749 51,460

4,288





Client KMs Data

Type

Invoice

Number

Invoice

Date

Fiscal

Period

Invoice

Amt

% GAC Rx -

65%

TGS CAL Variance

BG

international

(SUP N004)

1,085.74 Seismic 015121 31/08/2012 2013

50,487

60%

32,816 30,292

2,524

Ecopetrol (1A) 1,134.00 Seismic 0004911 18/09/2012 2013

54,992

60%

35,745 32,995

2,750

Nexen/4717 5,618.14 Seismic ASA-

001198

20/06/2013 2013

14,937

60%

9,709 8,962

747

Ecopetrol (H-

005 / 5119)

3,032.55 seismic 002091 12/12/2013 2014

151,628

60%

98,558 90,977

7,581

Kosmos (H-010

/5310)

184.28 Seismic 002026 27/11/2013 2014

9,214

60%

5,989 5,528

461

CEPSA (H-001

n334)

seismic 003877 26/06/2015 2015

29,522

60%

19,189 17,713

1,476

Total License

Fees Collected

3,078,303

2,000,897 1,624,760

376,137

Annexure 2: LIBERIA ULTRA DEEP REVENUE SHARING/150528

July 2008 tllrough Sep 2015

NOC

AL

TGS

Name KMs Data Type Invoice

#

Invoice

Date

Fiscal

Year

Invoice

Amount

Date

Collected

% TGS CAL GAC Rx % $

License Fees

Collected:

Chevron USA

10,048.09 Seismic,

Grav/MAG

0003628 29/12/20

10

2011

3,779,425

12/1/2011 10%

377,943

377,943

90

%

3,401,483

Tallsman 1,858.01 Seismic,

Grav/MAG

0003593 17/12/20

10

2011

706,045

2/3/2011 10%

70,605

70,605

90

%

635,441

Lukoil

Overseas

1,144.31 Seismic,

Grav/Mag

0003749 21/02/20

11

2011

480,611

4/1/2011 10%

48,061

48,061

90

%

432,550





NOC

AL

TGS


#

Invoice

Date

Fiscal

Year

Invoice

Amount

Date

Collected


West Project

Petrobras 3,583.39 Seismic,

Grav/Mag

0003817 30/03/20

11

2011

1,497,856

6/7/2011 10%

149,786

149,786

90

%

1,348,070

Nexen

Petroleum

International

(003)

1,926.19 Seismic,

Grav/Mag

0003880 5/12/201

1

2012

789,737

6/20/2011 10%

78,974

78,974

90

%

710,763

KNOC {001) 75.04 Seismic 0003966 29/06/20

11

2011

30,015

9/1/2011 10%

3,002

3,002

90

%

27,014

Shell

Offshore

(002)

3,098.10 Seismic 0004052 10/08/20

11

2012

1,030,118

9/9/2011 10%

103,012

103,012

90

%

927,106

Total S.A.

(026)

1,789.61 Seismic 0004029 8/03/201

1

2011

697,949

9/28/2011 10%

69,795

69,795

90

%

628,154

Amerada

Hess {025)

3,682.57 Seismic 0004085 31/08/20

11

2011

1,469,347

11/7/2011 10%

146,935

146,935

90

%

1,322,412

Dana

Petroleum

(002)

871.42 Seismic,

Grav/Mag

0004204 11/09/20

11

2012

326,946

12/14/201

1

10%

32,695

32,695

90

%

294,252

BP Expl.

Operating

Co. (011)

4,998.15 Seismic 0004214 21/11/20

11

2012

1,942,531

21/12/201

1

10%

194,253

194,253

90

%

1,748,278

Petronas

Cariga!i Sdn.

Bhn.(012)

3,682.57 Seismic,

Grav/Mag

0004249 30/11/20

11

2012

1,469,347

23/12/201

1

10%

146,935

146,935

90

%

1,322,412

African

Petroleum

Corporation

(006)

5,000.00 Seismic,

Grav/Mag

0004295 29/12/20

11

2012

497,362

1/31/2012 10%

49,736

49,736

90

%

447,626





NOC

AL

TGS


#

Invoice

Date

Fiscal

Year

Invoice

Amount

Date

Collected


African

Petroleum

Corporation

(006)

0004295 30/12/20

11

2012

1,442,638

1/31/2012 10%

144,264

144,264

90

%

1,298,374

African

Petroleum

Corporation

158.81 Seismic,

Grav/Mag

Credit

Memo

9/07/201

2

2013

(61,610)

7/9/2012 60%

(36,966)

(36,966)

40

%

(24,644)

Anadarko

(044)

1,499.96 Seismic 0004277 15/12/20

11

2012

532,487

1/17/2012 10%

53,249

53,249

90

%

479,238

Talisman

(006)

2,333.70 Seismic,

Grav/Mag

0004283 20/12/20

11

2012

975,487

9/2/2012 10%

97,549

97,549

90

%

877,938

Tullow

Liberia

Data View 0004165 20/10/20

11

2012

15,000

9/11/2011 10%

1,500

1,500

90

%

13,500

Statoil (01) 3,997.39 Seismic,

Grav/Mag

23/12/20

11

2012

1,427,068

1/3/2011 10%

142,707

142,707

90

%

1,284,361

ExxonMobil

Exploration

Company

(077)

423.79 Seismic 0004566 23/03/20

12

2012

169,515

5/9/2012 10%

16,952

16,952

90

%

152,564

Petronas

Carigali Sdn.

Bhd. (013)

1,020.00 Seismic 0004585 13/04/20

12

2012

392,700

5/24/2012 10%

39,270

39,270

90

%

353,430

ENI S.p.A.

E&P Division

(013)

3,026.36 Seismic 0004574 30/03/20

12

2012

678,006

5/29/2012 10%

67,801

67,801

90

%

610,205

2012

472,012

60%

283,207

283,207

40

%

188,805

Kosmos

Energy (003)

660.19 Seismic,

Grav/Mag

0004579 4/10/201

2

2013

277,279

4/10/2012 60%

166,367

166,367

40

%

110,912





NOC

AL

TGS


#

Invoice

Date

Fiscal

Year

Invoice

Amount

Date

Collected


Tullow (006) 1,092.45 Seismic,

Grav/Mag

0004667 17/05/20

12

2012

447,905

6/18/2012 60%

268,743

268,743

40

%

179,162

BHP Billiton

(028)

931.6 Seismic 0004758 27/06/20

12

2012

363,329

8/23/2012 60%

217,997

217,997

40

%

145,332

Kosmos

(006)

1,298.5 Seismic,

Grav/Mag

0004755 25/06/20

12

2012

545,375

8/6/2012 60%

327,225

327,225

40

%

218,150

Ecopetrol

(1A)

941.00 Seismic 0004911 18/09/20

12

2013

383,465

11/26/201

2

60%

230,079

230,079

40

%

153,386

Exxon (H85) seismic 005172 28/12/20

12

2013

2,858,351

1/30/2013 60%

1,715,010

1,715,010

40

%

1,143,340

Inpex (16) seismic 0005204 27/12/20

12

2013

712,514

1/25/2013 60%

427,509

427,509

40

%

285,006

OMV seismic 0005207 14/12/20

12

2013

667,070

2/8/2013 60%

400,242

400,242

40

%

266,828

JOGMEC(396

0 H 003)

Seismic 001091 31/01/20

13

2013

2,180,865

2/28/2013 60%

1,308,519

1,308,519

40

%

872,346

COP (4280

H-033)

Seismic.

Grav/Mag

1332/13

27

31/03/20

13

2013

617,660

3/5/2013 60%

370,596

370,596

40

%

247,064

Kosmos

(4175

HOOS)

95.81 Seismic,

Grav/Mag

001104 2/07/201

3

2014

40,241

5/13/2013 60%

24,145

24,145

40

%

16,096

Nexen/4717 3,852.38 Seismic,

Grav/MAG

ASA-

001198

20/06/20

13

2013

43,016

6/28/2013 60%

25,810

25,810

40

%

17,207

OMV (4528

H007)

765.23 seismic 001518 10/06/20

13

2013

294,612

19/07/201

3

60%

176,767

176,767

40

%

117,845

Exxon/4510

H089

1,207.20 Seismic 001581 30/06/20

13

2013

458,736

2/8/2013 60%

275,242

275,242

40

%

183,494

Inpex

(H00214976)

2,580.64 Seismic 001670 15/08/20

13

2013

1,032,255

9/13/2013 60%

619,353

619,353

40

%

412,902





NOC

AL

TGS


#

Invoice

Date

Fiscal

Year

Invoice

Amount

Date

Collected


Ecopetrol (H-

005 I 5119)

4,473.15 seismiclgra

v mag

002091 12/12/20

13

2014

1,878,723

21/01/201

4

60%

1,127,234

1,127,234

40

%

751,489

Chevron (H-

033 I 5290}

1,273.73 selsmic/gra

v mag

002064 11/12/20

13

2014

463,552

3/18/2014 60%

278,131

278,131

40

%

185,421

Murphy (H-

00816176)

seismicfgra

vity

002742 26/06/20

14

2014

398,679

7/31/2014 60%

239,208

239,208

40

%

159,472

Total (H-045

f 5762)

1,112.10 seismic/gra

v mag

002566 15/04/20

14

2014

483,764

11/20/201

4

60%

290,258

290,258

40

%

193,505 Total License

Fees Collected

34,907,984

10,769,695

10,769,695

24,138,289

Recovered Amount Sum of a =

18,315,171

Maximum Recovery per

Agreement

17,255,000

Excess Recovery 1,060,171

NOCAL Share of Excess Cost

Recovered

636,103



Annexure 3: LIBERIA 2D PSTM REVENUE SHARING/150115; 150397 Rate per

Agreement

65%

July 2008 through 2015

Client GAC NOCAL

License Fees

Collected: KMs Data Type

Invoice

Number

Invoice

Date

Fiscal

Period Invoice Amount % $ GAC Rx Variance

Total S.A. 699.98 Seismic 0001495 30/05/2008 2008

378,000 60%

226,800 245,700

(18,900)

Total S.A. 699.98 Interpretation

Report

0001495 3/07/2008 2008

90,000 60%

54,000 58,500

(4,500)

Tullow 4244.14 Seismic 0001765 15/10/2008 2008

1,358,124 60%

814,875 882,781

(67,906)

Tullow 4244.14 Grav/Mag 0001765 15/10/2008 2009

84,883 60%

50,930 55,174

(4,244)

Tullow 4244.14 Interpretation

Report

0001765 15/10/2008 2009

70,000 60%

42,000 45,500

(3,500)

Anadarko Petroleum

Corp

992.44 Seismic 0001937 17/12/2008 2009

372,164 60%

223,299 241,907

(18,608)

ConocoPhillips 6396.90 Seismic 0002328 18/05/2009 2008

1,791,132 60%

1,074,679 1,164,236

(89,557)

BP Exploration

Operating

2819.89 Seismic 0002331 19/05/2009 2009

704,972 60%

422,983 458,232

(35,249)

BP Exploration

Operating

2728.76 Grav/Mag 0002331 19/05/2009 2009

54,575 60%

32,745 35,474

(2,729)

Anadarko Petroleum

Corp

803.33 Grav/Mag 0002386 23/06/2009 2009

16,067 60%

9,640 10,443

(803)

Maralhon Oil 1421.63 Seismic 0002512 31/08/2009 2010

525,996 60%

315,598 341,898

(26,300)

StatoilHydro 3440.55 Seismic 0002580 30/09/2009 2010

1,082,053 65%

703,334 703,334

0

StatoilHydro 3354.00 GravfMag 0002580 30/09/2009 2010

60,372 65%

39,242 39,242 -


83,987 65%

54,592 54,592

0

Chevron U.S.A. (First

Payment)

6090.71 Seismic 0002581 30/09/2009 2010

146,113 65%

94,973 94,973 -

Repsol 2226.86 Seismic 0002675 30/11/2009 2010

793,130 65%

515,535 515,535

0

StatoilHydro 289.54 Seismic 0002610 28/10/2009 2010 65% 59,189




Agreement

65%


Client GAC NOCAL

91,060 59,189 (0)

StatoilHydro 149.44 Grav/Mag 0002610 28/10/2009 2010

2,690 65%

1,748 1,748

(0)

Nippon Oil 723.49 Seismic 0002762 12/11/2009 2010

312,708 65%

203,260 203,260

0

Marathon Oil 1763.29 Seismic 0002841 30/12/2009 2010

678,866 65%

441,263 441,263

(0)

Total S.A. 1348.31 Seismic 0002674 25/11/2009 2010

494,241 65%

321,257 321,257

(0)

Chevron U.S.A.

(Second Pi:iyment)

6090.71 Seismic 0002877 26/01/2010 2010

1,515,224 65%

984,896 984,896

(0)

Chevron U.S.A. 6090.71 Grav/Mag 0002878 27/01/2010 2010

47,949 65%

31,167 31,167

(0)


280,278 65%

182,181 182,181

0

Nexen 3476.25 Sefsmic 0003028 31/03/2010 2010

910,778 65%

592,006 592,006 -

Nexen 3335.47 Grav/Mag 0003028 31/03/2010 2010

53,368 65%

34,689 34,689 -

Chevron U.S.A.

(Third Payment)

6090.71 Seismic 0003066 13/04/2010 2010

409,505 65%

266,179 266,179

0

Chevron U.S.A. 6090.71 Grav/Mag 0003066 13/04/2010 2010

12,959 65%

8,423 8,423 -

Statoil-Hydro 3137.25 Seismic 0003152 20/05/2010 2010

988,234 65%

642,352 642,352 -

Hongkong Tongtai 4000.01 Seismic 0003092 30/04/2010 2010

355,000 65%

230,750 230,750 -

CNOOC 4000.01 Seismic 0003092 30/04/2010 2010

510,000 65%

331,500 331,500 -

CNOOC partner fee

waived by NOCAL

Seismic

(350,000) (350,000) -

African Petroleum

Corporation

0003244 7/12/2010 2011

619,468 65%

402,654 402,654 -

Talisman 2281.05 Seismic &

Grav/Mag

0003593 28/12/2010 2011

684,315 65%

444,805 444,805 -




Agreement

65%


Client GAC NOCAL

Nexen 50.14 Seismic 0003606 13/12/2010 2011

16,195 65%

10,527 10,527 -

Lukoil Overseas West

Project

3315.19 Seismic,

Grav/Mag

0003749 21/02/2011 2011

1,359,676 65%

883,789 883,789 -

Petronas Carlgali

Overseas

5051.85 Seismic 0003734 22/02/2011 2011

1,869,184

65%

1,214,970 1,214,970 -

Chevron USA 3291.56 Selsmlc &

Grav/Mag

0003613 31/12/2010 2011

671,866

65%

436,713 436,713

(0)

Petrobras Seismic &

Grav/Mag

0003817 30/03/2011 2011

2,037,459

65%

1,324,348 1,324,348 -

Hess (020) 5051.85 Seismic 0003876 5/06/2011 2011

1,682,266

65%

1,093,473 1,093,473 -

Nexen Petroleum

!nternational (003)

2091.75 Seismic 0003880 5/12/2011 2012

763,489

65%

496,268 496,268

0

KNOC (001) 324.64 Seismic 0003966 29/06/2011 2011

123,362

65%

80,185 80,185 -

Liberia Japan

Petroleum Ltd. (002)

5535.90 Seismic &

Grav/Mag

0004069 29/08/2011 2012

2,103,642

65%

1,367,367 1,367,367 -

Petronas Carlgali

Sdn. Bhn.(009)

143.06 Seismic 0004054 16/08/2011 2012

52,933

65%

34,406 34,406 -

Total S.A. (026) 426.52 Seismic 0004029 8/03/2011 2011

157,814

65%

102,579 102,579 -

Shell Offshore {002) 3598.01 Seismic 0004052 10/08/2011 2012

1,086,599

65%

706,289 706,289 -

KNOC (002) 172.57 Seismic 0004063 26/08/2011 2012

65,578

65%

42,626 42,626 -

Amerada Hess (025) 4330.43 Seismic &

Grav/Mag

0004085 31/08/2011 2012

1,599,987

65%

1,039,992 1,039,992

(0)

Petronas Carigali

Sdn. Bhn. (01OJ

817.88 Grav/Mag 0004166 25/10/2011 2012

14,722

65%

9,569 9,569 -

Dana Petrleum (002) 2637.68 Seismic &

Grav/Mag

0004204 9/11/2011 2012

848,166

65%

551,308 551,308

0

License Fees

Collected:

.

- -




Agreement

65%


Client GAC NOCAL

Peppercoast

Petroleum (004)

143.06 Grav/Mag 0004262 7/12/2011 2012

3,577

65%

2,325

2,325 -

Petronas CarigaH

Sdn. Bhn.(012)

4187.36 Seismic &

Grav/Mag

0004249 30/11/2011 2012

1,539,896 65%

1,000,932 1,000,932 -

African Petroleum

Corporation (006)

400.00 Seismic &

Grav/Mag

0004295 22/12/2011 2012

137,200 65%

89,180 89,180 -

Talisman Energy

(006)

491.70 Seismic &

Grav/Mag

0004283 20/12/2011 2012

159,446 65%

103,640 103,640

(0)

Kosmos Energy

(003)

3315.15 Seismic &

Grav/Mag

0004484 28/02/2012 2012

1,326,117 65%

861,976 861,976 -

Talisman Energy

(007)

261.68 Seismic &

Grav/Mag

0004570 29/03/2012 2012

99,437 65%

64,634 64,634

0

ENI S.p.A. E&P

Division (013)

2537.40 Seismic 0004574 30/03/2012 2012

926,151 65%

601,998 601,998 -

African Petroleum

Corporation (007)

1839.07 Grav/Mag 0004584 12/04/2012 2012

27,586 65%

17,931 17,931 -

Peppercoast

Petroleum (004)

143.06 Grav/Mag 0004262 7/12/2011 2012

(3,577) 65%

(2,325) (2,325) -

Kosmos Energy

(004)

1309.91 Seismic &

Grav/Mag

0004690 25/05/2012 2012

504,316 65%

327,805 327,805 -

Tullow (006) 975.60 Seismic &

Grav/Mag

0004667 16/05/2012 2012

368,777 65%

239,705 239,705 -

African Petro (008) 1156.08 seismic 0004741 13/06/2012 2012

32,408 65%

21,065 21,065 -

Apache Angola (001) 4969.35 Seismic &

Grav/Mag

0004773 28/06/2012 2012

1,893,322 65%

1,230,659 1,230,659 -

Apache Angola (001) 4969.35 interpretation 0004773 28/06/2012 2012

45,000 65%

29,250 29,250 -

BHP Billiton

Petroleum (025)

1274.85 Seismic &

Grav/Mag

0004613 25/04/2012 2012

447,510 65%

290,881 290,881

0

African Petroleum

Corporation (006)

1079.39 Seismic &

Grav/Mag

0004796 7/09/2012 2013

61,610 65%

40,046 40,046

(0)

African Petroleum

Corporation (006)

Seismic &

Grav/Mag

0004796 9/07/2012 2012

(6,353) 65%

(4,129) (4,129)

0

Kosmos (SUP 007) 2144.18 Seismic & 0004877 31/08/2012 2013 65% 536,580




Agreement

65%


Client GAC NOCAL

Grav/Mag 825,508 536,580 (0)

BG international

(SUP N004)

1085.74 Seismic 0015121 31/08/2012 2013

379,870 65%

246,916 246,916

0

Ecopetrol {1A) 2268.00 Seismic &

Grav/Mag

0004911 18/09/2012 2013

439,934 65%

285,957 285,957

0

Inpex (1B) seismic 0005204 27/12/2012 2013

514,204 65%

334,233 334,233

(0)

JOGMEC(3960 H

003)

Seismic 0001091 31/01/2013 2013

1,931,262 65%

1,255,320 1,255,320

0

OMV seismic 0005207 14/12/2012 2013

404,567 65%

262,969 262,969

(0)

Kosmos (4175 H009} 184.28 seismic/gravit

y

0001104 2/07/2013 2014

73,710 65%

47,912 47,912 -

Nexen/4717 8953.61 seismic/gravit

y

ASA-001198 20/06/2013 2013

72,672 65%

47,237 47,237

(0)

OMV (4528 HOO?) 1070.44 seismic 0001518 10/06/2013 2013

396,062 65%

257,440 257,440

0

Inpex (H002/4976) 3130.35 seismic 0001670 15/08/2013 2014

1,189,533 65%

773,196 773,196 -

Ecopetrol (H-005

15119)

3032.55 seismic/gravit

y

0002091 12/12/2013 2014

1,213,020 65%

788,463 788,463 -

Murphy {H--

008/6176)

seismic/gravit

y

0002742 26/06/2014 2014

791,567 65%

514,518 514,518

(0)

CEPSA (H-001 n334) seismic/gravit

y

0003877 26/06/2015 2015

262,360 65%

170,534 170,534 -

TotalLicense Fees

Collected

46,087,840

29,334,800 29,607,096

(272,296)

Data View Fees

Collected:

- -

Hongkong Tongtai Data View 0003092 26/09/2008 2009

135,000 60%

81,000 87,750

(6,750)

Kosmos {AS) Data View 5/11/2012 2013

95,000 65%

61,750 61,750 -

230,000

142,750 149,500

(6,750)




Agreement

65%


Client GAC NOCAL

FeesInvoiced Not

Collected:

- -

Mittal Investments Data View 0001460 20/05/2008 2008

135,000 65%

87,750 87,750 -

Total Invoiced Not

Collected

135,000

87,750 87,750 -

Total All 46,452,840 29,565,300 29,844,346 (279,046)

Annexure 4: Other Reproduction Charges “3D Data”

Client KMs Data

Type

Invoice

Number

Invoice

Date Fiscal Year

Amount

Invoiced

Reproduction & Other

Charges

Chevron - 11 & 12 3013 Seismic 3359 9/3/2010 2011 4,590,000 64,500

Chevron - 14 1900 Seismic 3359 9/3/2010 2011 2,550,000 -

Chevron - 13 & 14 1500 Seismic 3613 12/31/2010 2011 2,550,031 316,468

Anadarko Petroleum Corp - 8 & 9 4855.9 Seismic 4203 11/9/2011 2012 5,644,638 355,362

Amerada Hess - 11 & 12 1547.5 Seismic 4573 3/22/2012 2012 3,095,084 -

Amerada Hess - 8 & 9 2442.5 Seismic 4540 3/22/2012 2012 4,884,952 -

ENI (A0) - 11 & 12 3013.4 Seismic 4906 9/13/2012 2013 5,424,196 614,735

ENI (A1) - 14 2024.5 Seismic 4907 9/13/2012 2013 3,198,688 413,482

Hess - 8 & 9 SUP 34 2442.5 Seismic 5085 11/30/2012 2013 488,492 511,508

Chevron 8 & 9 (H23) 2442.5 Seismic 5155 12/17/2012 2013 4,884,916 295,799

Exxon (3079 H079) - 13 2022.2 1459 5/21/2013 2013 4,044,322

Chevron 8 & 9 (H23) 5155 2013

Exxon (3079 H079) - 13 1459 2013

Chevron 8 & 9 (H23) DM 2442.5 repro 5155 2013 211,462

Exxon (3079 H079) - 13 DM 2022.2 repro 1459 2013 49,532

Total 41,616,312 2,571,855

TGS' Share 60% 1,543,113

NOCAL's Share 40% 1,028,742



Annexure 5: Revenue Sharing Ratios" 3D Data "Cost Recovery"

GAC RECAL

15% 40% 60%

Client KMs Data

Type

Invoi

ce

Num

ber

Invoice

Date

Fisca

l

Year

Amount


Reproduction

Charges

RECOVERED

COST

Managem

ent fees

NOCAL

SHARE

TGS

SHARE

RECOVER

ED COST

Anadarko

Petroleum

Corp - 15 2243 Seismic 1910 12/5/2008 2009 1,478,969 1,492,454 13,485 1,286,060 192,909 77,164 115,745 1,286,060

Anadarko

Petroleum

Corp - 16 1930 Seismic 1911 12/5/2008 2009 1,272,582 1,284,189 11,607 1,106,593 165,989 66,396 99,593 1,106,593

Anadarko

Petroleum

Corp - 17 1801 Seismic 1912 12/5/2008 2009 1,187,522 1,198,355 10,833 1,032,628 154,894 61,958 92,936 1,032,628

Anadarko

Petroleum

Corp - 15 2243 Seismic 1924 12/16/2008 2009 2,957,942 2,984,908 26,966 2,572,124 385,819 154,327 231,491 2,572,124

Anadarko

Petroleum

Corp - 16 1930 Seismic 1925 12/16/2008 2009 2,545,168 2,568,378 23,210 2,213,190 331,978 132,791 199,187 2,213,190

Anadarko

Petroleum

Corp - 17 1801 Seismic 1926 12/16/2008 2009 2,375,047 2,396,709 21,662 2,065,259 309,789 123,916 185,873 2,065,259

Anadarko

Petroleum

Corp - 15 2243 Seismic 1984 12/29/2008 2009 2,957,942 2,984,908 26,966 2,572,124 385,819 154,327 231,491 2,572,124

Anadarko

Petroleum

Corp - 16 1930 Seismic 2114 2/6/2009 2009 2,545,168 2,568,378 23,210 2,213,190 331,978 132,791 199,187 2,213,190

Anadarko

Petroleum

Corp - 17 1801 Seismic 2115 2/6/2009 2009 2,375,047 2,396,709 21,662 2,065,259 309,789 123,916 185,873 2,065,259

Anadarko

Petroleum

Corp - 15 2243 Seismic 2221 3/26/2009 2009 2,957,942 2,984,908 26,966 2,572,124 385,819 154,327 231,491 2,572,124




GAC RECAL

15% 40% 60%

Anadarko

Petroleum

Corp - 16 1930 Seismic 2222 3/26/2009 2009 2,545,168 2,568,378 23,210 2,213,190 331,978 132,791 199,187 2,213,190

Anadarko

Petroleum

Corp - 17 1801 Seismic 2223 3/26/2009 2009 2,375,047 2,396,709 21,662 2,065,259 309,789 123,916 185,873 2,065,259

Anadarko

Petroleum

Corp - 15 2243 Seismic 2287 4/30/2009 2009 2,957,942 2,984,908 26,966 2,572,124 385,819 154,327 231,491 2,572,124

Anadarko

Petroleum

Corp - 16 1930 Seismic 2288 4/30/2009 2009 2,545,168 2,568,378 23,210 2,213,190 331,978 132,791 199,187 2,213,190

Anadarko

Petroleum

Corp - 17 1801 Seismic 2289 4/30/2009 2009 2,375,047 2,396,709 21,662 2,065,259 309,789 123,916 185,873 2,065,259

Anadarko

Petroleum

Corp - 15 2243 Seismic 2931 2/12/2010 2010 1,478,953 1,492,454 13,501 1,286,046 192,907 77,163 115,744 1,286,046

Anadarko

Petroleum

Corp - 16 1930 Seismic 2933 2/12/2010 2010 1,272,566 1,284,189 11,623 1,106,579 165,987 66,395 99,592 1,106,579

Anadarko

Petroleum

Corp - 17 1801 Seismic 2934 2/12/2010 2010 1,187,506 1,198,355 10,849 1,032,614 154,892 61,957 92,935 1,032,614

Oranto - 11

& 12 3013 Seismic 2184 3/4/2009 2009 2,264,583 - -2,264,583 1,969,203 295,380 118,152 177,228 1,969,203

African Petro

H -001 - 8 &

9 5050 Seismic 2917 1/31/2010 2010 2,500,000 2,500,000

- 2,173,913 326,087 130,435 195,652 2,173,913

Oranto - 11

& 12 3013 Seismic 2184 3/4/2009 2009 6,735,417 9,000,000 2,264,583 5,856,884 878,533 351,413 527,120 5,856,884

Oranto - 11

& 12 3013 Seismic 2677 11/30/2009 2010 9,000,000 9,000,000

- 7,826,087

1,173,91

3 469,565 704,348 7,826,087




GAC RECAL

15% 40% 60%

African Petro

H -001 - 8 &

9 5050 Seismic 2917 2/17/2010 2010 1,744,600 1,744,600

- 1,517,043 227,557 91,023 136,534 1,517,043

African Petro

H -001 - 8 &

9 5050 Seismic 3006 3/22/2010 2010 4,732,200 4,732,200

- 4,114,957 617,243 246,897 370,346 4,114,957

African Petro

H -001 - 8 &

9 5050 Seismic 3067 4/13/2010 2010 6,122,600 6,122,600

- 5,324,000 798,600 319,440 479,160 5,324,000

African Petro

H -001 - 8 &

9 5050 Seismic 3141 5/7/2010 2010 6,327,200 6,327,200

- 5,501,913 825,287 330,115 495,172 5,501,913

African Petro

H -001 - 8 &

9 5050 Seismic 3201 6/8/2010 2010 3,073,400 3,073,400

- 2,672,522 400,878 160,351 240,527 2,672,522

Oranto - 14

1900 Seismic 2678 11/30/2009 2010 4,000,000 4,000,000

- 3,478,261 521,739 208,696 313,043 3,478,261

Oranto - 14

1900 Seismic 3361 9/7/2010 2011 6,000,000 6,000,000

- 5,217,391 782,609 313,043 469,565 5,217,391

Broadway -

13/Pepperco

ast 2000 Seismic 3879 2011

15,000,00

0 15,000,000

- 13,043,478

1,956,52

2 782,609

1,173,9

13

13,043,47

8

African Petro

H -001 - 8 &

9 5050 Seismic 3823 4/5/2011 2011 1,250,000 1,250,000

- 1,086,957 163,043 65,217 97,826 1,086,957

108,140,730 359,250 94,035,417 14,105,313 5,642,125 8,463,188 94,035,417

TOTAL COST TO RECOVER 84,756,668

Excess Cost Recovered 9,278,749

Amount Due to NOCAL 3,711,500

Anadarko - Other fees 359,250

Amount Due to NOCAL 143,700

Total amount due NOCAL 3,855,200



Annexure 6: Redacted Invoices

Invoice Number Fiscal year Amount Not Traced to Rev. Sharing

Schedule (US$)

4054 2012 2,146.00

4204 2012 859,929.19

4166 2012 8,940.00

4690 2012 40,947.25

4283 2012 840,482.01

4574 2012 1,183,803.05

4667 2012 37,302.22

4741 2012 2,486.12

4773 2012 3,291,591.20

4613 2012 1,540,730.05

4877 2013 30,446.37

12612 2013 960,643.12

4911 2013 2,311,079.20

5204 2013 564,829.54

1091 2013 87,874.16

5207 2013 471,827.64

1198 2013 73,230.58

2091 2014 283,446.00

3880 2011 1,399,944.94

3606 2011 111,336.00

3817 2011 5,993,793.50

2580 2010 2,673,083.82

3593 2011 1,554,346.00

1765 2009 21,000.60

2331 2009 1,627,931.96

4295 2012 3,099,600.00

4277 2012 17,513.31

4566 2012 333,996.89

4758 2012 2,683,990.00

1327 2013 2,117,380.25

633 2013 621,645.92

Total 34,847,296.89



Annexure 7: Sampled Consultancy Services Awarded in Non-compliance with PPC Act

Date Payee Check # Amount (US$)

2011/2012

11/30/2011 Fodee Kromah 00802787 4,500

11/30/2011 Jacob S. Sandike 00802744 3,150

12/31/2011 Albert T. Chie 00000031 3,600

12/31/2011 Fodee Kromah 00000032 4,500

12/31/2011 Jacob S. Sandike 00000033 3,150

12/31/2011 Devin Corp 00000051 5,460

12/31/2011 Jacob Kabakole 00000111 18,000

12/31/2011 ESL Consulting ltd ESL Consulting ltd 139,046

12/31/2011 Albert T. Chie 802786 3,600

5/31/2012 Albert T. Chie 1181 3,600

6/30/2012 Coastal Energy 1387 48,500

6/30/2012 F.Kromah 1463 4,500

6/30/2012 F.Kromah 1182 4,500

Sub-total 246,106

2012/2013

11/23/2012 Albert T. Chie A02659 3,600

5/2/2013 Samuel P. Jackson A00004054 4,500

5/2/2013 Stanley Seakor A00004053 4,500

6/4/2013 Stanley Seakor A00004344 4,500

6/4/2013 Samuel P. Jackson A00004346 4,500

Sub-total 21,600

2013/2014

11/1/2013 Samuel P. Jackson 5533 4,500

11/18/2013 ORION CONSULTANCY 5634 30,000

12/2/2013 Stanley Seakor 5771 4,500

12/2/2013 Samuel P. Jackson 5772 4,500

12/2/2013 Albert Chie 5770 5,535

12/18/2013 Albert Chie 5931 5,535

5/13/2014 Stanley Seakor 6946 4,500

6/9/2014 Stanley Seakor 7072 4,500

6/24/2014 Albert T. Chie 7199 5,535

6/30/2014 Stanley Seakor 7296 4,500

6/30/2014 Albert T. Chie 7285 5,535

Sub-total 79,140

2014/2015

11/26/2014 Peter Harrington Wire Transfer 8,249

11/26/2014 Susan Maples Wire Transfer 6,981

5/18/2015 Albert T. Chie A8679 9,840

6/25/2015 Heritage Communication A8860 43,000

Sub-total 68,070

Total 414,915

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