March is a busy month at SAOGA: finishing off the business planning process, getting ready for the annual audit, collating information for the reports we submit to funders and so on - the administrative stuff I'm sure we all grudgingly do in the process of keeping our organisations afloat to do the real work they are purposed to do. Fortunately March also had a few significant events of consequence to the industry.
Very visible to residents of Cape Town and Saldanha Bay are a couple of rig projects from Pride/Ensco and Transocean respectively. The Pride project is (I think) the first big one on the newly refurbished A-Berth facility. The Transocean one is the first large rig project in Saldanha and promises to establish that port as a second hub for ship/rig repair and maintenance projects going forward. It is of utmost importance that we continue to drive the development of this sector.
One potential setback to the sector emerged in the form of a recent communication from TNPA imposing a 2 "abnormal structure" limit in the Port of Cape Town. We have subsequently met with the Port Captain and have agreed to work with him to improve and clarify the booking process around the repair sector - this should go quite a long way to resolving concerns on both sides.
On the policy front we received news that the upstream Oil & Gas Services sector is being included in the national government's Industrial Policy Action Plan (IPAP) - many of you will have heard or read about this as Minister Rob Davies announced it a few days ago. This is significant because it means that there is now national recognition and commitment to the sector. There is still lots to be done to convert this into funds and action at the policy level but it is a good start.
PetroSA's FO project in Mossel Bay has been approved and a good number of the tender bids are closed or closing. Drilling will start in February 2012 with installation of most of the subsea components in March the following year - production should start soon after that. I hope that many of you are already involved in this project - others may find subcontracting opportunities in the next few months as the main bid winners start their activities.
Offshore in the Orange River Basin things are hotting up. Forest Oil has said publicly that they are close to concluding commercial power sales agreements that will allow them to proceed with an initial $2.5 billion investment on a gas-to-power project near Island Point in the Northwest Cape. At the same time the clock is ticking on the exploration licenses held by BHP and Forest in the area so it is also likely that rigs will be in the water for exploration drilling in 2012. We will be looking to work with the operators to ensure as much opportunity as possible for our members and will hopefully be able to arrange some information sessions in the upcoming months.
Saldanha Bay is becoming an area of increasing interest. Aside from the Transocean rig project there is growing recognition that the natural port and abundant space, not to mention the existing engineering capacity in the area, make it an ideal place for oil and gas activity. I am aware of plans for an oil and gas supply base, an LPG import terminal as well as for long-awaited activity in the dormant fabrication yard which should commence in the later part of this year. The Provincial government also sees the potential of the area and is pressing ahead with the studies required for an IDZ free zone in Saldanha Bay. No doubt there are a number of other initiatives underway as well that I am not party to.
At our March breakfast Peter Hurst, an experienced international trade practitioner, spoke about "Getting Off the Island", a frank discussion about what it takes to develop our businesses in the global market. This was in fact a warm-up for our upcoming initiative to market and promote the South African supplier base more aggressively and to provide companies with more support in finding specific market opportunities. As part of this we have been exploring opportunities to collaborate with partner organisations we have built relationships with over the past few years. I am pleased to say that two of them, NOF Energy and the Africa Business Centre (ABC is the Africa upstream specialist wing of the Grampian Chamber in Aberdeen), have agreed to open their trade visit trips to SAOGA members. ABC in particular has a programme of well organised trips to West Africa that we will make you aware of (the next hot opportunity is trip to Angola in June). Although SAOGA members will be required to pay their own way along with ABC's organising fee, I believe the networking and specific business opportunities these trips will offer could offer high value to selected members and encourage you to consider the opportunities. I should also mention that our own DTI is also arranging a mission to Angola which will be open to members - see elsewhere in the newsletter for details.
Given all that is happening, I am pretty excited about the industry at the moment - it is definitely emerging from a long sleep!
Changes to the membership process. Many of you will have noticed some changes around the membership application and renewal process. Joining SAOGA or renewing membership is a pretty simple process that involves completing a membership questionnaire and paying the fairly nominal annual fee. The questionnaire provides us with valuable information that helps us to communicate opportunities and plan activities in a more focused way. One particular way we use the information is to create a directory listing for you on our SA Oil and Gas Directory. To be honest it also helps us develop some data about the sector which is invaluable when engaging policy makers. You will see when you come to join or renew membership that you are able to fill your information in directly on our website. On the fee side we have for some while been considering offering the option of a 3-year membership period. I believe this will considerably reduce admin all round. Consequently, for this financial year we will be offering a 1-year membership and a 3-year membership option. The 1-year option will be more expensive than currently (although still nominal relative to money we are putting back into the sector) while the 3-year rate will be kept at the current annual rate but paid upfront.
Finally a farewell! After 6 years at SAOGA Angelo Harris has decided the time has come to try something else - he tells me he doesn't know what that something else is and is going to take some time off to figure it out. Many of you know Angelo well from his years with SAOGA and I'm sure will join me in wishing him well in his future endeavours.