SAN FRANCISCO, October 27, (THEWILL) – The House of Representatives Committee on Local Content has commenced investigation of major oil and gas companies operating in the country for allegedly breaching the Local Content Law.
The Local Content Law was passed in 2010 to protect Nigerian oil and gas businesses and interests.
It also disclosed that a particular Korean company has executed over $8bn worth of contract without any visible or viable asset in the country.
The Deputy Chairman of the House Committee on Local Content, Hon. Nasir Ali Ahmed (APC, Kano), who confirmed this, explained that as part of the committee’s oversight function, it is investigating all the major players in the oil and gas industry in order to uncover the sharp practices and summarily bring them to book.
“We have discovered that the Local Content Act, has been seriously violated by these International Oil Companies (IOCs) and we have summoned them to come and explain,” he said.
He confirmed that “mind-boggling details of the breach would emerge in the course of the probe exercise which has since begun.”
The Local Content Law states that “All regulatory authorities, operators, contractors, sub-contractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry shall consider Nigerian content as an important element of their overall project development and management philosophy for project execution.”
Section 3 (2) of the Act states that: “There shall be given exclusive consideration to Nigerian indigenous service companies which demonstrate ownership of equipment, Nigerian personnel and capacity to execute such work bid on lad swamp operating areas of the Nigerian oil and gas industry for contracts and services contained in the schedule to this Act.”
“Section 68 of the Act, warns that: “An operator, contractor or subcontractor who carries out any project contrary to the provisions of this Act, commits an offense and is liable upon conviction to a fine of five per cent of the project sum for each project in which the offense is committed or cancellation of project.”
Section 1 of the piece of legislation states that: ” Notwithstanding, anything contrary contained in the Petroleum Act or in any other enactment or law, the provisions of this act shall apply to all matters pertaining to Nigerian content in respect of all operations or transactions carried out in or connected with the Nigerian oil and gas industry industry.”
While, section 49 (1) states that: ” All operators, projects promoters, alliance partners and Nigerian indigenous companies engaged in any form of business, operations or contract in the Nigerian oil and gas industry, shall insure all insurable risks related to its oil gas business, operations or contracts with an insurance company, through an insurance broker registered in Nigeria under the provisions of Insurance Act amended.”
By Saint Mugaga, Abuja
