SAOGA News Letter - Nov 2010

Thoughts from Warwick's Desk...

 In mid-October Adrian Strydom (SAOGA Skills Programme Manager) and I made a long-planned two week trip to the UK and Norway. The primary objective of the trip was to promote and test interest in our proposed “Marine Oil & Gas Academy (MOGA)” – our conceptual approach to developing a regional upstream training hub/cluster in South Africa.  In practice we achieved this but also quite a bit more as we met with a variety of associations, companies and accreditation bodies.  I am in the process of writing up a detailed meeting-by-meeting account of the trip which I will post on our website because I believe it is important to share the benefits and insights of this trip as widely as possible – we learned things and made contacts that are likely to be of interest to many of you.  In summary though some of the main things I learned from the trip:

· There is strong interest in participating in the MOGA/SA training cluster, in many cases with opportunities for SA partners;

· There are a number of high value/specialized training offerings that we could potentially set up in SA e.g. a subsea lifting/rigging course;

· Industry task teams and working groups have been key to association activities and the growth of the UK and Norwegian oil and gas industries;

· Associations have played a key role in setting guidelines and standards for training and ways-of-working for the industry; many of these are available to us;

· There is plenty of willingness on the part of associations and governments to help us develop our industry;

· SAOGA can enhance its offerings to members through partnerships that allow access to marketing capability of other associations – e.g. offering members access to UK arranged trade missions to sub-Saharan Africa.

 As I shared at the AGM we are in the process of developing a longer term strategic agenda for developing the upstream supply industry in South Africa.  With the relative sophistication of our industry, the increased exploration activity further south and east in Africa and the attractiveness of our location for business and lifestyle there is a real opportunity to create a significant regional upstream hub in South Africa which would be a combination of global companies operating from here as well as a chain of local companies clustered around the upstream activity. From my perspective the challenge is for us to play a constructive role in ensuring that this happens – this will not only be a SAOGA/industry initiative but will involve national industrial/energy policymakers, trade promotion agencies and key state-owned enterprises.  At this stage there are a number of areas that would seem to be priorities in “sparking this growth”: greater promotion of our existing industry and capabilities, aggressive improvement and promotion of our upgrade/fabrication and maintenance cluster (ship/rig repair), creation of an upstream training cluster, promoting SA as a location for regional head offices for the global players, development of our role in logistics and distribution to the region and maximizing the opportunities arising from our local E&P activities.  The challenge is to create a focused strategy with plenty of industry participation and energy around each of these areas. I believe that if we can do this the propositions will complement each other and allow us to achieve a critical mass in expanding the SA-based upstream activity.

 Finally some general things of note in the industry and SAOGA:

 · The A-Berth upgrade project in the Cape Town harbour is nearing completion and at the last update I heard it is set to open on December 15.  We await news from Ferromarine Cape (the primary leaseholder and developer) as to how the facility is going to operate and how the industry will be able to access the facility for client work;

· 

Good progress is being made in pushing forward the overall South African upstream agenda:

 o   Exploration leases have now been finalized on the blocks held by Forest Oil and BHP Billiton in the Orange River Basin;

 o   It seems likely that the next round of exploration drilling in one or more blocks of the Orange River basin will commence within 12-24 months;

 o   PetroSA is in the process of issuing and awarding tenders for its ~$1bn FO field development in Mossel Bay – this should provide a very tangible increase in the industry activity levels even though a large portion of the contract revenue will go to foreign suppliers because of the specialized nature of the services required;

o   Shell Exploration appears to be making good progress on their shale gas investigations and we await news to hear when and what will happen next in their exploration programme – following their September presentation at a SAOGA event they have undertaken to come back in the first part of 2011 to provide a further update once their plans are firmed up;

o   Current thinking on Forest Oil’s Ibhubesi project is to commercialise the gas by building a gas-fired power station near to onshore landing point for gas brought in from offshore

· TNPA recently tendered out for lease a large package of land around the Saldanha Bay  harbour.  Awards from this tender round should be announced around the end of November and we are aware a number of potential exciting developments for the industry that could flow from this;

· The TNPA repair facilities concessioning process in the ports has not yet to our knowledge resulted in decisions as to who the preferred operators will be for the various dry-dock and ship lift facilities. This is concerning because these decisions were supposed to have been made in September so the process does seem to be progressing more slowly than specified in the tender process.

· The Saipem FDS (a pipelay vessel) repair and upgrade project is just about complete after ~15 weeks of activity. We recently spoke to the Saipem project manager and received some good feedback on the project – in particular the safety record has been excellent so well done to our many members who have been involved with this project;

· Another thing of great interest to me and I think to all of us is that we continue to experience a strong interest from global players in establishing offices in South Africa with Cape Town in particular being a popular location.  In the last couple of months we’ve seen National Oilwell Varco, Enermech and Halliburton establish (or reeastablish Cape Town offices) and this continues a trend we have noted all year.  A key driver for this is the increasing importance of upstream activity in East Africa/Mozambique which has shifted the centre of attention further east and south than the traditional West Africa oilfields.  This is a significant trend that should have strong positive impacts on our industry;

· Finally and of less cosmic importance is the fact that SAOGA will be moving offices at the end of January. Our current leases in the Absa Building have come to an end and we have secured new premises at 4 Loop Street (quite close to where we currently are) which should better support our mission and activities – more news and probably a small event on this will follow in due course.

 To end let me make a quick plug for our upcoming Networking Breakfast on November 25^th. It will be our last for the year and we  have Chris Bredenhann from PWC coming to share the results of a continent wide study they have done to identify trends and opportunities in the African oil and gas industry. He has promised to highlight issues and opportunities of relevance to our industry here in South Africa so it is a talk I am looking forward to.

Regards,

 Warwick Blyth

CEO/Executive Director

 South African Oil & Gas Alliance

Ship Repair News 

SHEQ Symposium - 05^th October 2010  

 The workshop themed “Nurturing and Instilling a Safety Culture” brought together a number of Industry role-players to present on and discuss the importance of instilling a safety culture within the Shiprepair fraternity operating within the Port of Cape Town. 

 The open day included a number of exhibitors, subject matter experts and leading contractors sharing HSE information. There were a number of professional HSE services and consumables on display in the form of a mini-exhibition. The workshop, the main focus on the day, concentrated on the importance for contractors to adopt and instil a safety culture within their companies. Key role-players are TRANSNET National Ports Authority – Port of Cape Town, The South African Oil and Gas Alliance and Industry Stakeholders.

 This workshop came about as a result of a number of key factors viz. (i) the resurgence of the Shiprepair forum and (ii) the Port of Cape Town embarking upon a process of licensing contractors who operate within the Port’s ship repair operational areas.

 Notably absent on the day were a number of the ‘smaller’ contractors who ply their trade within the Port on a daily basis. It is my understanding that the ultimate objective is twofold (i) assist companies to comply with latest legislation and the process whereby the Port will issue its operators a licence to operate (ii) the focus of the safety drive is to assist companies that do not have safety systems in place, to comply

 The messages that emanated from the workshop highlighted just that. We started with the Port of Cape Town outlining their role and the licensing requirement for operators supported by SAOGA who co-chairs the SHE Forum. The workshop further highlighted the importance of the forum, its terms of reference and role of SAOGA. The subject matter experts demonstrated the importance of safety in the workplace and the ease of implementing a quality HSE system. Two of the larger operators (i) emphasised the importance of SHEQ in relation to attracting key Client’s and meeting their stringent SHEQ standards and (ii) the cost - benefits of have a SHE-Q culture within a company. The formal part of the day ended with SAOGA highlighting its training initiatives in relation to health and safety and a breakaway session whereby companies and individuals had an opportunity to voice their opinion and give input into further strengthening the purpose and functioning of the Shiprepair SHE Forum. The day concluded with a Networking function.

 All the presentations where concise but delivered high impact messages. To access the Summary Report and all Presentations please visit the SAOGA website at http://www.saoga.org.za/eventrecords  

 A special Vote of THANKS to all the presenters who supported the event and volunteered their time and who made a valuable contribution in the form of high impact presentations:- Lyndon Metcalf (TNPA Port of Cape Town), Carla Nelson (MSA), John Binns (AllWeld), Alan Jones and Rory McGuire (De Beers Marine), Captain Vernon Keller (SMIT Amandla Marine) and Adrian Strydom (SAOGA). All those who participated in the Group Work and presented the outcomes.

 The exhibitors who made themselves and displays available for the day:- NOSA, Enviroserve, Concord Maritime Training, SEDA, SAIBL, SMIT, De Beers Marine, TNPA, Keith Mackie, Cape Media, Total Cover.

 Behind the scenes: - Bridgette (RCYC), Rita and Sikha (SAOGA) and Donna-Loo (TNPA).

 Last but not least: - ALL our Member companies, members of the Shiprepair fraternity, Directors of SAOGA and those who travelled as far afield as Gauteng.

 An apology to those who somehow did not get the follow-up correspondence on the change in venue notification. Keep reading them emails.

 Any enquiries or would you like to share Shiprepair information, please send a brief email message to shiprepair@offshoreafrica.co.za