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052 | 054 - Essay Navigating change and oil slicks 055 - Q&A East Coast Regional Manager, SAMSA 056 - Briefings Weigh loaded containers R300 billion and some change NPA tariff increase rejected

Edition 2012/13

Port of Durban


I INDUSTRY Essay, Navigating change & oil slicks

NAVIGATING CHANGE AND OIL SLICKS PREFACE Since 2011 the United States (US) and Europe have been ratcheting up pressure to tighten international sanctions against Iran. For South Africa, everything could be at stake - from oil supplies arriving through Transnet’s ports and pipelines to bread-and-butter issues and national self-

Earlier this year, South Africa’s key interna-

a challenge, says Cape Town analyst Johan

tional allies - the US and the European Union

Muller of Frost & Sullivan.

(EU) - called on the government to join their oil embargo against Iran.

‘The most obvious alternative oil sources for South Africa – Nigeria, Angola and Saudi

By not following the West, South

Arabia – have been confirmed by our De-

Africa could be excluded from the US

partment of Energy,’ notes Muller. ‘But South

financial system, resulting in being cold-

African refineries are engineered for a cer-

shouldered on exports, imports, loans and

tain oil composition.’

aid. However, if we listen to our 2nd and 3rd





largest trade partners, South Africa could

Iranian oil will therefore have to adapt in

be left short of a lot of oil: some 26% of

order to process different types of crudes.

South Africa’s monthly crude imports are

This could take months and has been

currently sourced from Iran.

estimated to cost USD44 million. This could lead to refineries temporary being unpro-


Throttling supply


Oil, diesel and petrol coming through South

ductive. The reality is that our broader economy

Patricia McCracken

Africa’s ports and pipelines are crucial to


keep the country’s wheels moving, as well as

especially after the frequent and severe un-


vast parts of the entire continent. Throttling

planned refinery shutdowns in 2011. These

acm + Floyd Paul

this supply could possibly cause another

impacted on industries relying on refining

economic downturn, affecting incomes, jobs

by-products. Construction – a sector that

and food on the table for families across the

is already struggling - was for instance

nation and large parts of southern Africa.

affected by bitumen shortages. The shut-

The problem is that finding alternative oil

down earned public castigation from Min-

sources to replace Iranian crudes could be

ister of Energy Elizabeth Dipuo Peters and

052 Port of Durban




Port City Publications

I INDUSTRY Navigating change & oil slicks, Essay

drove importation of more than 5 billion li-

provides much of sub-Saharan Africa with

its own: In 2001, our exports to the rest of

tres of diesel and petrol.

oil products, has been key to gaining initial

Africa amounted R108 billion. Of this, 75%

American and European sanctions waivers

went to Sub Saharan Africa.

Impact on Transnet’s MDS

until January 2013.




Temporary unproductive refineries due to

This does not mean South Africa can sit

participation at the 2012 African Renais-

adaptations could result into oil shortages

back and relax. Government has to spend

sance Conference in Durban - where South

– which could impact Transnet’s rollout of

the next months until January 2013 to seek

Africa’s national Infrastructure Plan was

its 2009-2014 National Infrastructure Plan

a solution suitable for its own needs that is

unpacked on a national, regional and con-

and its ZAR300-billion, seven-year US sanc-

acceptable to both its traditional trading

tinental scale - underlined the high value

tions’ potential (MDS). One of the objectives

partners, the EU and US, and its newer allies

South Africa places on regional integration.

of this infrastructure overhaul is to increase

- China and Russia.

Energy Minister Peters also affirmed

the throughput of petroleum products by

this stance. According to her, the impor-

almost sevenfold to more than 20 billion

Taking Africa in consideration

tance of integrating and mobilising the


With regards to the anti-sanctions BRICS

energy structures within the Southern

Also threatened could be the econo-

nations, South Africa will also have to keep

African Development Community (SADC),

my-boosting intentions of South Africa’s

a close eye on its growing leverage in Africa.

adding that only South Africa, Angola and

national Infrastructure Plan and even the

These include the close alliances between

Zambia have efficiently working refineries.

possible youth policy, which President

China and growing powerhouses such as An-

This whirlpool of allies, alliances and trade

Zuma punted in June 2012. Ultimately, such

gola, Nigeria and Ghana.

relations makes it difficult for South Africa

economic effects could trickle down to indi-

Last but not least, the rest of the

to navigate the oil slicks and sea of changes

vidual citizens, whether in price increases or

African continent – in particularly the south-

of international diplomacy, and to choose

job losses.

ern part – has to be taken into consideration

whether it wants to suffer the socioeco-

too. South Africa after all, is not an island on

nomic impact of US sanctions or to abandon

This, and the fact that South Africa


carefully cultivated alliances.

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Edition 2012/13

Port of Durban


I INDUSTRY Essay, Navigating change & oil slicks

The key players in a nutshell The US: Though declining, the US remains the world’s top military power. Putting an emphasis on this position, the country is calling for sanction against Iran – accusing the country of using its nuclear programme for weapons. Iran says its programme will be used for generating energy. The US is South Africa’s third trade partner and fourth biggest export market, at ZAR61 billion in 2011. It in addition, is a vital source of foreign funding for government and commercial projects, as well as aid for sectors such as health and education. The EU: Lining up alongside the US, the EU agreed to stop importing Iranian crude from July 2012. Many individual member states cut back immediately, contributing to Iranian oil exports falling 13% in 2012’s first

quarter. As part of the EU embargo, Euro-

China: As Iran’s top oil buyer, an average

pean insurers may not insure oil shipments

of 500.000 barrels a day and about 22% of

from Iran - critical as they cover about 90%

Iran’s production, China refuses to back the

of the world’s oil tankers.

US sanctions. China’s stance against sanc-

The EU is South Africa’s 2nd largest

tions increases its geopolitical influence,

trade partner and top export market,

despite confirming its strategically weak

amounting to ZAR152.5 billion in 2011.

reliance on Iranian oil imports. It has been

Iran: Iranian crude oil exports amounted

predicted the Chinese government would

to USD70.7 billion in 2010. In 2009 oil and

back its tanker insurance with sovereign

gas made up 80% of total exports and 60%


of total government revenues. Iran’s main

China is South Africa’s third-largest

weapon against sanctions would be block-

export market, mainly for minerals, at

ading the Straits of Hormuz, which transits

ZAR90.2 billion. Russia: South Africa’s exports to Rus-

about a fifth of the world’s oil. Some foreign investors that are deeply

sia in 2011 amounted to only ZAR2.2 billion

involved in Iran’s rich energy reserves

and in recent years, Africa has been margin-

include French Total, Dutch Shell, Italian Eni,

al to Russia’s foreign policy. Strategically,

Norwegian Statoil and South Africa’s Sasol.

though, Samir Saran of New Delhi’s Observ-

Some opportunistic clients, such as China,

er Research Foundation has suggested Rus-

are trying to renegotiate for cheaper prices.

sia could use BRICS to create an anti-West,

India is apparently stockpiling ahead of the

anti-American grouping.


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Port City Publications

I INDUSTRY Captain Saroor Ali, Q&A

MARITIME WATCHMAN PREFACE South African Maritime Safety Authority (SAMSA) Regional Manager, Captain Saroor Ali and his team have the daunting job of monitoring of all vessels on South African shores; and making sure salvaging laws are followed. WRITER Mike Lillyman ILLUSTRATIONS acm + Floyd Paul

One glance at the number of wrecks off

LRIT system (Long Range Identification and

the country’s long coastline indicates just

Tracking) but at any given time there may be

When a ship needs to be salvaged, who pays

how dangerous and unforgiving South

over 1500 ships in the region. The danger of

for it?

Africa’s shore is. The South African Maritime

ill-equipped or poorly maintained vessels

‘Normally ships have insurance cover. We

Safety Authority (SAMSA), by monitoring

floundering along our coast always poses

would then be in contact with the ship’s

practically every vessel movement, plays

a huge threat to the country, both environ-

agent or owner and they would make

a key role in ensuring this number does not

mentally and financially.’

arrangements to put up guarantees for the cost of the salvage. The shipping industry

grow. How does SAMSA protect both ships and

is perhaps one of the most regulated indus-

SAMSA’s regional manager for the East

coastal area?

tries, but there is always the danger of fly-

Coast of South Africa, is able to observe

‘We have a continuous monitoring process

by-night operators, or unscrupulous owners

almost every the shipping movement that

and casualty response plan in place. There is

abandoning the vessel. In such case, the

takes place in the Port of Durban. With over

a dedicated tug on stand-by as well as other

state has to become involved.

twenty years of seafaring experience as a

vessels to provide assistance in emergen-

Fortunately most pass our shores without

Master Mariner, most of the shipping lines

cies. After assessing the situation, these

incident but when things go wrong SAMSA

that frequent the port are well known to him.

may be deployed as required. Furthermore

has the task of minimizing the risks to both

we are able to predict the direction in which

life and the environment.’

From his office Captain Saroor Ali,

How does SAMSA identify and monitor

the disabled vessel would drift and what


immediate threat it poses to the environ-

‘SAMSA monitors and identifies vessels

ment. Don’t forget we have two major roles

through the AIS (Automatic Identification

to play in such situations: one is to protect

System). All ships are required to maintain

the lives of those at sea and the other is to

this system on board. It is however the ones

combat pollution, thus preventing environ-

that switch them off that cause the prob-

mental damage to our coastline. ’

lems. We are able to track ships through the

Edition 2012/13

Port of Durban


I INDUSTRY Briefings

Weigh loaded containers GLOBAL

Ship and port facilities should have a veri-

tion (SOLAS) to include this stipulation.

fied actual weight of the container before

Weighing loaded containers is already

stowing it on board of a vessel, various inter-

common practice in the United States of

national shipping organisations say.

America. All of the stakeholders agreed

The International Association of Ports

that having the actual weights of containers

and Harbours, the World Shipping Coun-

improves safety aboard ships, safety in the

cil, the International Chamber of Shipping,

ports, and safety on the roads, and warned

and the Baltic and International Maritime

that relying on the recorded weight from the

Council have joined hands to encourage the

shipper could be dangerous. – (BW)

International Maritime Organization (IMO) to amend the Safety of Life at Sea Conven-

NPA tariff increase rejected SOUTH AFRICA The National Ports Authority’s application for an 18.06% increase in tariffs for services and facilities for the 2012/2013tariff year (1 April 2012 to 31 March 2013)

ZAR300 billion and some change

has been rejected by the Ports Regulator of South Africa.

SOUTH AFRICA The Port of Durban is set to benefit from

promote local suppliers, accelerate skills

Transnet’s ZAR300-billion capital expendi-

development (with ZAR7.7 billion spent on

ture plan. The seven-year strategy intends

up-skilling), target youth employment, and

to transform the company into the world’s

triple Transnet’s overall profitability.

fifth-largest rail freight company - shifting

The strategy will be funded by operat-

the lion’s share of haulage from road onto

ing cash flows and borrowings from capital


markets. The infrastructure investment will al-

Once complete, Transnet will have posi-

most double Transnet’s rail freight capacity

tioned itself as one of the global role-play-

(from 200 to 350 million tons), especially

ers in integrated rail freight and commodi-

in commodities such as iron-ore, coal and

ties transport, and will play a significant role

manganese, significantly reduce the cost

in South Africa’s economic growth. – (NM)

The regulator considered both comments from relevant stakeholders as well as the existing regulatory framework in making its decision and concluded that a 2.76% tariff increase was a reasonable and appropriate increase. – (BW) Source: The Ports Regulator of South Africa /

of doing business in South Africa, diminish congestion and reduce carbon emissions. Studies have shown that rail is 75% more efficient than road transport. The multi-pronged strategy also aims to increase container traffic through ports (from the current 79% market share to 92%), expand commodity exports, increase petroleum inland supply, improve productivity and efficiency in rail and port operations,

056 Port of Durban

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