Equatorial Guinea to crack down on oil services companies over local jobs

FILE PHOTO: Equatorial Guinea's Oil Minister Gabriel Mbaga Obiang, June 22, 2018. REUTERS/Heinz-Peter Bader/File Photo

CAPE TOWN (Reuters) - Oil and gas services firms Schlumberger, Subsea 7 and FMC face being banned from working in Equatorial Guinea if they do not commit by the end of this month to create more jobs for locals, an oil ministry source said on Friday.

The move is part of crackdown by the African country to enforce local content laws that have been in place since 2014 and which has already grounded CHC Helicopter.

Subsea 7 said it is aware of the increased focus on local content. “We continue to work closely with authorities to ensure we meet all applicable local regulations,” a Subsea 7 spokeswoman said.

Schlumberger and FMC did not respond to phone calls or emails for comment.

In July, the OPEC member and one of Africa’s top oil producers ordered petroleum operators, including Exxon Mobil, to cancel contracts they held with Canadian-based CHC Helicopter for flouting local content laws meant to create jobs.

The source confirmed that CHC Helicopter will not be working in the country from next year, ending a working relationship dating back more than three decades.

“The ministry is aggressively looking at the second phase, with three additional companies that will have the same fate if they don’t get their act together in one month, by the end of September,” said the source, who requested anonymity because they were not authorized to speak to the media.

“Schlumberger, FMC and Subsea 7 are really in the last stage of being asked by the ministry for the operators to cancel their contracts and tender new ones for new companies to do the work, especially because they are not complying with local content.”

Equatorial Guinea’s national content regulations of 2014 state that agreements must make provisions for capacity building and give preference to local companies when awarding service contracts in the African country.

Reporting by Wendell Roelf; Editing by James Macharia and Louise Heavens