Local content: Patronage of WAV, others to reduce $8bn capital flight – Reps….Vow to cancel IOCs contracts for foreign firms

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By Qouzeem Safiriyu

The House of Representatives Committee on Local Content has said that the patronage of West African Ventures (WAV) and other indigenous companies will help reduce capital flight and further promote local content. Investigation had revealed that Nigeria loses an estimate of $8 billion as capital flight due to award of contracts to foreign companies by International Oil Companies (IOCs) in line with the directive of the Nigerian Content and Development Act signed into law on April 22, 2010 by former President Goodluck Jonathan. The committee also promised to cancel oil and gas contracts awarded by IOCs to foreign companies where there is in-country capacity to execute such contracts by indigenous companies.

The Chairman, House of Representatives Committee on Local Content, Hon.e Emmanuel Okon  disclosed during an inspection of shipyard and fabrication complex operated by West African Ventures at Onne in Rivers State that poor patronage of WAV shipyard, fabrication complex and marine facilities of other indigenous companies in the sector has worsened capital flight in the oil and gas industry. According to him, 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 otherwise known as flight by night contractors acting as commission agent for foreign companies in Nigeria. “ 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),” he noted.

, WAV ought to be patronized first by the IOCs, where they need marine services.

Hon 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.

His words:

“What we have seen here is 100 per cent Nigerian company and by that law, this company (WAV) 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 Nigerian’s 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.

Okon said, “I think the primary thing is to make sure that governance come to 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.

However, primarily, let us first see how government can come in to see that there is peace in this Niger-Delta in order to encourage business in the industry”.

   “We are here in WAV today without anybody. In fact, the blind man can see that this company has demonstrated capacity. So, my only appeal to IOC is yes, the industry is down right now but when it comes up, companies like WAV, that have demonstrated this huge capacity should be patronized. That is our appeal”, the Committee Chairman corroborated him.

 A member of the Committee Hon Kehinde Agboola present at the inspection said, : “this is a global pricing. It’s not restricted to Nigerian oil and gas sector. It is a global crisis now and WAV asset is not obsolete.

He lamented that the inspection became necessary because WAV is a good example of indigenous company with capacity but deliberately not being patronized by IOCs. According to him, “the IOCs operating within the Nigerian territorial water should patronize them. That is the whole essence of local content”.

The committee member also admitted that the Niger-Delta crisis contributes to the challenges of the indigenous companies and ceased the opportunity to remind government of the need to restore peace in the region as the oil and gas business remains the mainstay of the economy.

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