April 2010 Newsletter

With the strategy and business planning cycle behind us we are now pressing forward with the key projects that are to be the focus of the year.  I would like to take this opportunity to say something about two key projects that we are busy getting underway.
 The first is a thorough analysis and mapping of our “industry”.  As I outlined last month there is a real need for SAOGA to understand better the companies we have in our supplier base. This is fundamental to being able to support an agenda in which we promote South African companies in the global markets and at home with operators who are again becoming active in the domestic upstream sector (e.g. PetroSA’s potential new project in Mossel Bay as well as new license rights for Shell, Silverwave Energy, Forest Oil and hopefully soon for BHP and CNR as well).  In addition to this it is impossible to develop effective interventions for company support and industry development without a thorough understanding of the capabilities of our companies and the impacts of the infrastructure and regulatory environment.  In practical terms we will start with a substantial initiative to gather a lot more information about our members and the South African upstream supplier base in general.  Over the coming months we will be surveying, interviewing and visiting companies to understand more about the kind of products and services on offer, the issues you are facing, the degree of focus on the oil and gas business, the sort of clients being served, company capabilities and more.  I also expect to form a number of sub-sector task teams to look specifically at some of the niche sectors within our industry base – without participation from member companies at this level it is unlikely that we will get the necessary level of insight – and may if appropriate also look to engage some expert consultants (e.g. Marintek) to provide some insight into possible market /value chain opportunities to focus on in our region.   In due course I expect to share many of the insights from this work (without compromising the confidentiality of individual companies) in future newsletters and industry forums.  For now the critical imperative is getting the full participation and cooperation from member companies – I urge you to help by responding to surveys or questionnaires and possibly volunteering to participate in a task team if the opportunity arises.
 The second priority project “on deck” is the restarting of our “industry bond” initiative. This is a project to improve the import/export regime for the oil and gas industry. Certain changes are essential to facilitate the growth of South Africa as a supply and logistics hub for the industry in the wider region.  The essence of the initiative is to work with SARS and Treasury to create an umbrella customs bond facility for the industry – this will avoid individual companies having to post large bonds and go through the processes of recovering them when certain items are “temporarily imported” into the country e.g. when equipped is imported to be staged and reshipped to west Africa or when a piece of equipment is removed from rig in the harbour for repair at a Cape Town workshop.   The initiative in fact has a substantial history and we were making good progress on it up until early-2008 when constraints at SAOGA turned attention elsewhere.  So what we are doing now is picking this up again but are also looking more broadly at other possibilities like a “freezone” or IDZ which could achieve what is needed. I have already had a series of conversations with a number of key players but will formally restart the initiative at an industry meeting we will schedule for late-May. 
 A few general thoughts to wrap up.  As I write these words I’m somewhere over the Atlantic en route to Houston for the annual OTC event.  I will join Adrian Strydom, our Skills Programme manager, and 10 of our member companies who will also exhibit on the SA stand that we have facilitated this year – I believe a number of other companies will also attending but not exhibiting.  It will be my first visit to OTC and I am looking forward to the industry showpiece – no doubt it will be somewhat overshadowed by the catastrophic events resulting from the failure of Transocean’s Deepwater Horizon rig in the Gulf of Mexico last week.  I also look forward to sharing some of my impressions and learning when I get back.  
 I also want to mention an industry roundtable that was held recently with a number of interested companies. In response to a request and at the initiative of Janet Cotton of One-Eighty we pulled together a meeting to discuss the idea of a materials testing centre in the western Cape.  While the concept itself may or may not proceed, the roundtable was good opportunity for people to connect around a topic of interest and I’ve had several people indicate how helpful it was to have this session.  I’d like to see more such roundtables and will use that example as motivation to once again invite anyone who would like to speak at a breakfast or host an event of your own (like a sundowner networking session to showcase your company or an industry roundtable to discuss a particular topic)  to let me know – we are keen to have you involved in what is after all your alliance!  To end a reminder that there will be a SAOGA networking breakfast on May 27 – keep an eye out for an announcement with the details.