Equatorial Guinea said to plan end to oil-service contracts

JOHANNESBURG (Bloomberg) -- Equatorial Guinea may exclude oil-service companies TechnipFMC Plc, Subsea 7 SA and Schlumberger Ltd. from the country because they aren’t complying with local-content rules over training and jobs, said a government official.

Major oil companies could be asked by the end of September to cancel their contracts with those service providers and issue new tenders, the official said, asking not to be named because the information isn’t yet public. That would be similar to action taken against CHC Helicopter Corp. earlier this year, the official said.

“With regards to local content requirements in Equatorial Guinea, Schlumberger is working with the Ministry of Mines and Hydrocarbons and we have submitted our plans to ensure full compliance in due time,” Schlumberger said in an emailed statement.

Subsea 7 “is aware of the increased focus on local content” in Equatorial Guinea and continues “to work closely with authorities to ensure we meet all applicable local regulations,” it said in an emailed statement. TechnipFMC didn’t immediately respond to a request for comment.

Under the West African country’s National Content Regulation of 2014, “all agreements must have local content clauses and provisions for capacity building, with preference given to local companies in the award of service contracts,” according to the ministry of mines and hydrocarbons.

Equatorial Guinea pumped 199,000 bopd on average last year, according to data from BP Plc. That’s down from a peak of 380,000 in 2005. The country, which joined OPEC in 2017, is keen to boost drilling and plans to offer about 12 blocks, including in deepwater areas, in a licensing round in January.