November 2009 Newsletter

It’s been a busy past month at SAOGA with the AGM on November 18 and the events around the Norwegian Royal visit last week at the centre of our public appearances.  The AGM was an opportunity to share some initial thoughts about the way forward at SAOGA but I remain preoccupied with the question of how this organization can make a significant difference to the industry we serve and unambiguously make membership of SAOGA a valuable proposition to our members.   I believe that quite a bit of thinking and input is still required to finalize the roadmap but in the interests of stimulating some discussion and soliciting input let me share  some of the thoughts as they stand.  Broadly speaking there are four general priorities to focus on:
 
Marketing and Promotion.  SAOGA is a cluster of companies whose main common interest is accessing opportunities in the oil & gas markets.   This leads to a really diverse group of member companies ranging from highly specialized technical/engineering firms to more general service firms covering things like legal services, accounting and travel.  From a SAOGA perspective the need here is for us to market and promote this South African supplier cluster both locally and globally.   In the past we have mostly done this by attending and facilitating missions to trade exhibitions along with some limited media placement.  Going forward, the marketing strategy is going to focus on identifying the key buyers (e.g. procurement managers at the major companies) in the region and ensuring that our members know who they are and how they buy (e.g. through procurement platforms, relationships etc).   Conversely we need to ensure that these buyers are aware of the supply opportunities available here and we will focus on getting this message out to them – the recently initiated SA Oil & Gas Directory (www.oilandgassa.com ) will be a key tool in this and I urge  companies to ensure that your entries properly reflect what you’d like to communicate to the market.  A related area will be to participate in CSDPs (competitive supplier development programmes) that look to link local suppliers to the key upstream buyers (especially Sasol, PetroSA locally).
 
Building the Industry/Government Partnership. During the Norwegian visit this week I had the opportunity to engage with individuals from both their public and private sectors and one of the key impressions they left on me was the way in which the two sectors work together in a highly enabling way for Norwegian business.  It left me reflecting on the degree to which large parts of our public sector are quite disabling to business and opportunities are being lost.  I wrote in my last newsletter about the urgency of sorting out our ports if we are to be competitive in marine repair and upgrading.  Beyond this, aspects of our tax regime are out of line with global norms around the oil and gas industry, visa access to many African countries is difficult for South Africans and local content regimes impede access to African markets.  These are all issues that must be dealt with in partnership with government and I believe it is important that SAOGA focus more on building these links between industry and government. One of the first steps that needs to be taken in this regard is that we as industry need to educate our public sector on what our industry is worth in terms of jobs and gdp, what its potential is and what needs to be on the public policy agenda.    This is essential if we are to engage the politicians and consequently I see SAOGA taking a much stronger role in surveying and studying the various industry subgroups that make up our member base – I urge you to participate in this when the opportunity arises.
 
Improving Standards and Quality. SAOGA can also play a role in helping our companies to become more competitive, especially those that are delivering more technical products and services.  The oil & gas industry is global and standards compliance is a basic license to operate – we need to help ensure that our companies are training and operating in compliance with the relevant standards in the industry.  Obviously a large part of the responsibility for this falls on individual companies but I believe we have a role to play in several respects.  Firstly, we can make the industry aware of what the relevant standards are and provide information on the pathways to achieve them. Secondly, we can work with the relevant qualifications bodies to ensure that local and global training standards are aligned.  Thirdly, we can harness funds and  align with other entities (e.g. National Skills Fund, SASDA, UNIDO, provincial skills money etc) to apply resources that directly support companies in their efforts to implement standards and develop/source suitably qualified people.  Our Skills Programme is one example of how we are currently spending significant resources to improve industry capability through skills provision – going forward we need to ensure this programme is more coordinated with industry.  
 
Strengthening Communication and Cooperation.  I lived, for many years, in Silicon Valley outside San Francisco and experienced firsthand what it is like to live in the midst of a cluster of companies that, while competing fiercely, also cooperate fiercely.  For me the hallmark of Silicon Valley is the instant readiness of companies and individuals to explore the “win/win” whenever possible.   The mindset is always on how to make the pie bigger than the sum of the parts and then to share in a way that ensures everyone is better off – the result is probably the wealthiest, most innovative industry cluster in the world. The Norwegian oil and gas industry has followed the same model and the result is industry leading positions in significant parts of marine and subsea sectors.  My sense is that generally speaking our companies are not operating in this way and yet we are small part of the global oil and gas supplier base and face immense competition from without – surely we will be stronger by figuring out how to cooperate in marketing, product/technology development and service delivery to our clients?  SAOGA’s part in this journey is to create the networking opportunities and be a catalyst for specific opportunities as we encounter  them. To this end, we remain committed to providing regular industry events for members to attend and meet. We will also look to convene more ad hoc meetings with small groups of members to explore specific issues and opportunities as appropriate.    You will also hear a pretty steady drumbeat from me on this message – I deeply believe the “win/win” mindset will unlock more opportunities than we could imagine alone.  
 
So these are the broad thoughts.  I now invite a response – are these the directions that will make SAOGA relevant and helpful to you? Are there other things that should be in the mix? What concerns do you have? What further questions do you have?  Feel free to email or call me with your thoughts – I hope too that I will have the chance to engage a good number of you personally.
 
To end, a few of the customary plugs.  The first SAOGA networking breakfast in  a while is happening on Thursday morning.  The response has been overwhelming and we are now having to turn people away – if you have responded positively and not yet paid please pay soon because your reservation is not secure until payment is received.  I should also mention that paid up SAOGA members will get preference amongst those whose place is not yet confirmed.  Look forward to seeing a lot of you there.   Secondly, our Skills Programme has recently started a pilot delivering O&G elearning material sourced from a UK company.  We have acquired 5 courses including an “Intro to the O&G Industry” and a number of courses related to HSE practice in various situations.   We are going to acquire some additional licenses and would like to offer member companies the opportunity to participate in the training – let us know if you are interested.  Finally, I want to draw your attention to our notice about OTC10 in Houston – DTI has decided not fund the National Pavilion this year and we are now coordinating the pavilion for members that are still interested in participating.