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Equatorial Guinea orders termination of all contracts with US Oil Company for local content violations
JUBA — At the recently held South Sudan Oil and Power Conference in Juba, the Minister of Mines and Hydrocarbons of Equatorial Guinea announced the decision to have all petroleum operators–including, but not limited to, Noble Energy, ExxonMobil, Kosmos Energy, Trident, Marathon Oil Corporation–cancel all contracts with U.S.-based oil service company Subsea 7. This was as a result of noncompliance of Equatorial Guinea’s local content regulations.
“As Minister, I have an obligation to ensure the laws of the country governing the hydrocarbon sector are complied with,” said Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons.
Gabriel Mbaga Obiang Lima
He added, “Companies operating in the oil sector have an obligation to work within the confines of our very flexible and pragmatic local content regulations that are market driven and ensure that both investors and our citizen benefit. I commend the leadership of Schlumberger and Technip FMC in taking proactive steps to engage with the oil companies and government to ensure local content concerns is resolved.”
Further to this, the Minister said that he will continue to work with oil companies operating in Equatorial Guinea to unwind contracts and find new suppliers for companies that have refused to comply with local content regulations.
He revealed that a compliance review of the entire sector is ongoing and is being led by the Director of National Content. The notice has been expanded to all service companies, which are non-compliant as the review continues. It was also noted by the Minister that similar measures will be taken.
Under the National Content Regulation of 2014, all agreements must have local content clauses and provisions for capacity building, with preference given to local or regional companies in the award of service contracts. Local shareholders must be part of every contract as prescribed by law. The operators have an obligation to ensure compliance of their subcontractors.
The online version of this article can be accessed at: (https://www.worldoil.com/news/2018/11/21/minister-orders-termination-of-all-contracts-with-subsea-7)
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