01 December 2017, Sweetcrude, Port Harcourt — The Oil and Gas Free Zone Authority, OGFZA, has denied reports making the rounds that firms have begun to pack out of the oil and gas free zones in Onne, Rivers State, following the dispute it has with INTELS Nigeria Limited.
OGFZA disclosed that some firms had left the zones in the wake of the economic downturn which the country experienced last year, even before the appointment of Umana Okon Umana as the Managing Director of the Authority.
The Managing Director of the Authority, Umana Okon Umana, in a statement, explained that some companies had hitherto left the zones due to excessive tariffs charged by Intels to licensees in the zones.
Umana in a statement issued by his Special Assistant on Media, Mr. Iboro Otongaran, stated that based on the excessive charges by Intels, the Authority had to embark on a downward review of the tariff in the free zones in a bid to attract and keep investors and companies in the Onne free zones.
He added that licenses have been issued for new companies coming into the free zones this year, which was consistent with the free entry and free exit reality of the marketplace.
“It is not true that any company has moved out of the Oil and Gas Free Zones because of the disagreement between the Oil and Gas Free Zones Authority (OGFZA) and Intels Nigeria Limited.
“In the last quarter of last year, a few companies applied to the management of OGFZA and indicated interest to leave the free zones because of the lull in economic activities in the Oil and Gas sector for which they provided logistic services.
“This was before the appointment of the current managing director of OGFZA, Mr. Umana Okon Umana.
“A few other companies also decided to deregister, complaining of excessive tariffs charged by Intels Nigeria Limited to licensees in the zones, a development which led OGFZA to insist on a downward review of the current tariffs and the approval of a new tariff regime by the Authority according to the extant law in the free zones.”
OGFZA disclosed that between March 2017 and April 2017, a total of 16 companies affiliated to Intels Nigeria Limited equally applied for deregistration, citing lack of business, adding that their application had nothing to do with the disagreement between OGFZA and the logistics company.
The Authority maintained that the cases of departures from the free zones cited above took place before the onset of the disagreement, and the reason which the companies gave was economic.
However, OGFZA explained that it was aware that some companies have left and threatened to leave the free zone because of excessive charges imposed by the free zone concessionaire without the approval of the Authority.
It added that it is currently engaging Intels Nigeria Limited with a view to resolving the contentious issues.
The authority said, “We want to note that the excessive charges have eroded the incentives provided by law for free zone licensees, and undermined the purpose of the free zones, which is why OGFZA insists that those charges must be approved before they can be applied in the free zones as provided for in the extant law.
“We also want to say that it is not true, as alleged in uninformed quarters, that Intels Nigeria Limited is laying off staff because the company has been asked to comply with laws and regulations that govern operations in the free zones. The truth is that since 2015, Intels Nigeria Limited has been downsizing purely for economic reason.
“The Authority will like to be clear that it will not be distracted in the execution of its mandate, which enjoins it to provide a level playing field for all free zone companies, encourage the deepening of the free zones through the attraction of more investors and discourage the existence of a monopoly that can threaten competition through excessive charges.”