The House of Representatives Committee on local content has revealed the patronage of homegrown companies in Nigeria’s oil and gas sector will help cut down an estimated $8 billion annual capital flight
The committee has also pledged to cancel oil and gas contracts awarded by the International Oil Companies (IOCs) to foreign companies where there is in-country capacity and capability to execute such contracts by indigenous companies, Thisday reports.
The Chairman of the Committee, Hon. Emmanuel Okon said at the weekend during an inspection of shipyard and fabrication complex operated by West African Ventures (WAV) at Onne in Rivers State that poor patronage of WAV shipyard, fabrication complex and marine facilities of other indigenous companies had worsened capital flight in the oil and gas industry.
He said the committee decided to have a physical examination and assessment of facilities put in place by WAV and other indigenous companies so as to avoid supporting indigenous contractors he described as ‘flight by night contractors’ acting as commission agent for foreign companies in Nigeria.
Okon said: “We believed that companies such as WAV with huge investment within the country as employer of over 5,000 Nigerians should be encouraged so that the investors can do more. That way, we will reduce capital flight (money that is going out of this country significantly).”
Okon noted that the patronage of indigenous companies with capacity would boost revenue earnings of the economy, save more money and create more employment opportunities by encouraging investors that have shown credibility and super quality in its business.
“What we have seen here is 100 per cent Nigerian company and by that law, this company (WAV) is supposed to be patronised 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. Today, IOCs will say they are doing local content but I think the best they can do for Nigeria is to patronise indigenous companies like WAV so that they can in turn engage Nigerians teeming unemployed youths,” Okon explained.
He admitted that issues relating to inadequate patronage were a fall out of the global crisis in the oil and gas industry and a deliberate intention by the IOCs not to patronise the companies. Okon, however urged that this intention is repositioned to promote local content.
