Equatorial Guinea has mandated all oil companies operating within its territory to cancel any contracts with CHC Helicopter, after accusing the helicopter operator of failing to comply with the country’s national content regulations.
Issued by the central African country’s Ministry of Mines and Hydrocarbons, the edict has given producers including Noble Energy, Exxon Mobil, Kosmos Energy, Trident, and Marathon Oil Corporation 60 days to unwind contracts with CHC and find new suppliers. Only helicopter operators in compliance with the National Content Regulation of 2014 may be allowed to bid for these contracts, the ministry said.
Under the National Content Regulation of 2014, all agreements related to the exploration of oil-and-gas must have local content clauses, with preference given to local companies when awarding service contracts. Local shareholders must be part of every contract and producers have an obligation to ensure the compliance of their subcontractors.
“These laws are in place to protect and promote local industry, create jobs for citizens, promote the sustainable development of our country, and we are aggressively monitoring and enforcing the compliance of these requirements,” said Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons.
When reached for comment by Vertical, CHC said it was “confident” it was in compliance with the regulations.
“We have operated in Equatorial Guinea for nearly 20 years and have built one of the most comprehensive training programs of any oil-and-gas contractor in [the] country,” the company said in an emailed statement. “We have provided successful training for pilots, engineers, and administrative staff, and implemented a cadet training program. We are also invested in local social projects with our teams dedicated to providing physical and financial support to local charities and causes.
“Our operations have been regularly audited and any minor findings have been addressed in our ongoing dialogue with the Minister of Mines and Hydrocarbons. We look forward to continuing the conversation with local authorities beginning with already planned discussions for this week and look forward to continuing to support our customers and the greater Equatorial Guinean community.”
The action from the ministry is part of a broad ongoing compliance review of the entire sector, led by Equatorial Guinea’s director of national content and legal advisors of the ministry. The ministry warned that similar measures will be taken with other companies who are deemed non-compliant as the review continues.
“We are eager to work with international companies who partner with Equatorial Guinea in the development of our industry,” said Mbaga Obiang Lima. “But we expect all companies operating in Equatorial Guinea to follow the laws of the Republic of Equatorial Guinea. As minister, I will not hesitate to enforce the law to ensure compliance.”
