Implications of acrimonies between Nigerian companies and their foreign partners
The acrimonies between some Nigerian companies and their foreign partners are bad omens for the country. This is because the adverse consequences of such acrimonies are usually grave, especially on the much desired foreign investment inflows into the economy.
The list of companies having one issue or another with their partners is long, notably LADOL Logistic Company and Samsung Heavy Industries( SHI), MTN versus the federal government, Intel and the Nigerian Ports Authority, Korean national oil company and the federal government. There was also the problem between a Norwegian oil firm, Statoil Nigeria Limited and Inducon Nigeria Limited.
Outside the oil and gas industry, are also the issue of Etisalat Nigeria Limited, Nigeria’s fourth largest telecommunication firm, and Mubadala, the company’s largest shareholder.
Experts argue that if these issues are not resolved to the satisfaction of all the parties involved, Nigeria will pay dearly for it as it will be difficult to get foreign investors having confidence in doing business with Nigerian companies, especially in the oil and gas sector
They add that it is difficult to ascertain what really is contained in the agreement signed by both LADOL and Samsung and until such agreement is seen and juxtaposed with what has been implemented, nobody can really say who has defaulted or not.
But observers of the industry are of the view that the local content policy of the government will be grossly affected if things like what are currently going on between these two parties continues without it being resolved amicably.
They said logistic bases are for companies to do their jobs and move on. But when they begin to have issues with their landlords, then, there comes a big problem for local and foreign companies that plan to engage in one partnership or the other in future. The problems between LADOL and SHI they said must not be allowed to discouraged investors eyeing Nigeria.
The completion of the Egina FPSO at LADOL is poster child for the country and the oil and gas industry. They also said it was a good start for the industry.
They however sees dispute between the two current controversies could dent the image of Nigeria as the country could be tagged an unfriendly country for business. This will consequently lead to investors being careful in dealing with Nigerian company companies. It would therefore be in the general interest of Nigerian economy for LADOL its partner to resolve this issues with Samsung. So that confidence could be created. Will like to invest in the country by establishing their facilities.
Because of local content policy many foreign companies But if this kind of thing continues to happen between Nigerian companies and their foreign partners, then country may lose out in a number ways.
Godwin Izomor, managing director of MG Vowgas said there is need to appeal to both LADOL and SHI to amicably resolved the issues because it is the country that would ultimately suffer for it.
“If foreign partners are sees Nigerian indigenous companies as not keeping to agreement the local content policy may be grossly affected. We need foreign partners to develop the local capacities”, he said.
The controversy between the Nigeria Ports Authority (NPA) and the Intels caught a global attention. The Intels facility in Onne which service oil and gas companies has now become almost an abandoned facility because of the problem with NPA. Many companies have relocated to other areas to do their jobs thereby swelling the unemployment profile of the country.
Dada Thomas , the immediate past president of the Nigeria Gas Association also described frosty relationship between Nigerian companies and their foreign partners is capable of discouraging other investors from coming to the country.
The current problem between the telecommunication giant, MTN and the federal government in which the company is asked to pay about $8 billion for infractions that were committed several years ago could the experts said is capable of eroding investment confidences.
According to some of the experts, Nigeria has also lost a great investment opportunity that would have accompanied the participation of the Korean National oil company in upstream sector of the oil and gas with the revocation oil prospective leases (OPLs) of 321 and 323 by the Federal Government.
The construction of Ajaokuta to kano gas pipeline in addition to the construction of 1000 megawatts power plants was part of the conditions given to the Korean company for winning the bid for the assets.The Koreans today are demanding the refund of the money paid for those blocks and has already moved out Nigeria seek investment in other clime.
Olusola Bello