Equatorial Guinea orders immediate termination of all contracts with US based oil service company Subsea 7

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Equatorial Guinea has ordered all petroleum operators in the country, including Noble Energy, Exxon Mobil, Kosmos Energy, Trident and Marathon Oil Corporation to cancel all contracts with US-based oil service company, Subsea 7.

The government said Subsea 7 has repeatedly failed to comply with Equatorial Guinea’s local content regulations. 

The decision was announced at the South Sudan Oil and Power Conference in Juba by Equatorial Guinea’s Minister of Mines and Hydrocarbons, Mr Gabriel Mbaga Obiang Lima.

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“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.

“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 are resolved.”

The Ministry said it 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.  

A compliance review of the entire sector is ongoing led by the Director of National Content and outside legal advisors of the Ministry.  The notice will be expanded to all service companies who are non-compliant as the review continues. 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. 

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Simon Ateba
Simon Ateba
Based in Washington, District of Columbia, United States of America, Simon leads a brilliant team of reporters, freelance journalists, analysts, researchers and contributors from around the world to run TODAY NEWS AFRICA as editor-in-chief. Simon Ateba's journalistic experience spans over 10 years and covers many beats, including business and investment, information technology, politics, diplomacy, human rights, science reporting and much more. Write him: simonateba@todaynewsafrica.com

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