House of Representatives to cancel IOCs contracts over local content policy

The House of Representatives Committee on Local Content has vowed to cancel all oil and gas contracts, already awarded to International Oil Companies (IOCs), which indigenous companies have no capacity to execute.

The committee believed that patronage of indigenous companies would help reduce capital flight and further promote local content.

The Chairman, House of Representatives Committee on Local Content, Emmanuel Ekon, made this disclosure during an inspection of shipyard and fabrication complex operated by West African Ventures (WAV) at Onne in Rivers State.

Ekon said that the patronage of indigenous companies with capacity would boost revenue earnings of the economy, save more money and create more employment opportunities.

He stated: “What we have seen at WAV facility is 100 per cent Nigerian company and by that law, this company is supposed to be patronized first by the IOCs, where they need marine services. That’s what the law says and the law is not ambiguous but explicit.

“It says wherever there is a Nigerian competence, there is an in-country capacity and there’s a job, within the oil and gas industry. The law states that the IOCs or whoever is giving out that contract, should first of all give a Nigerian company the right of refusal”.

He added: “Today, IOCs will say they are doing local content but I think the best they can do for Nigeria is to patronize indigenous companies like WAV so that they can in turn engage Nigerians teeming unemployed youths.

The committee chairman admitted that issues relating to inadequate patronage was a fall out of the global crisis in the oil and gas industry and a deliberate intention by the IOCs not to patronize the companies. It however urged that this intention is repositioned to promote local content.

Ekon said: “I think the primary thing is to make sure that governance come into see how peace can be maintained, particularly in this Niger-Delta area where the oil and gas business is going on. For now, we still have one major source of revenue in this country, which is the oil and gas business. Hence, the House of Representatives will oppose and cancel contracts awarded to foreign companies where there is in-country capacity by indigenous companies with huge investment creating jobs locally”.

“Basically, I think if the environment is okay, if there is peace, militancy activities are brought down to the barest minimum, opportunities will now come in for WAV that has the capacity, we have seen it. If a Nigerian company is like this, there is no need calling in foreign companies.