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Issue No.4
8 8 Shale gas
Shale gas: the game changer
Having been looked at from all sides, the case for shale gas extraction has become irresistible to the countries fortunate enough to have it.
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14 Offshore Energy - Event preview
Energizing the offshore sector
This October more than 8,500 industry professionals will congregate in Amsterdam for the fastest growing offshore exhibition and conference: Offshore Energy 2013.
22
EUROPE: 22 Abraservice Nederland More than a steel supplier
The secrets behind Abraservice’s success, the role it is playing in creating a brighter future and Abraservice Nederland’s own contributions towards local and international growth.
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contents
30 Boskalis Offshore A century of service
Boskalis Offshore is the driving force behind the offshore energy activities of Royal Boskalis Westminster NV.
38 Starlite Aviation Group A star shining bright
30 38
Starlite Aviation Group has grown into a global aviation business. Commercial Director, Dimmie de Milander discusses the strengths of the group and how it is perfectly positioned to capitalise on future growth opportunities.
americas: 48 Repsol Sinopec Brasil
A partnership made in Brazil
Country Manager, JosĂŠ MarĂa Moreno discusses how the coming together of Repsol and Sinopec is bringing huge benefits to Brazil, both economically and socially.
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Issue No.4
58 68
58 Petróleos de Venezuela, S.A. (PDVSA)
Revolutionary energy providers
Arguably the greatest contributor to Venezuela’s economic and social development, everything that Petróleos de Venezuela, S.A. (PDVSA) undertakes is in the interest of the country’s inhabitants and of maintaining its unique oil sovereignty
68 NGC Trinidad
Growing gas – a two-way flow
Speaking to company president Mr Indar Maharaj, we discover how the National Gas Company of Trinidad and Tobago (NGC) looks to fulfil a new mandate to extend its influence internationally.
78 Petrojam
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A finer refinery for Jamaica The Petrojam refinery at Kingston Jamaica is being upgraded and should be complete by the beginning of 2016.
contents
Africa:
86
86 Total Namibia
A total solution for Namibia
Total Namibia continues to prove its considerable worth to Namibia’s many industries and the country as a whole.
92 Global Sourcing & Supply (GSS)
Delivering quality of life where it’s needed most
One of the foremost providers of complete site support services and operations in all of Africa
industry Focus: 100 South African Oil & Gas Alliance
Changing the South African energy game
100
On the brink of world class oil and gas discoveries South Africa is ready to join the global top table, with a major role to be played by the South African Oil & Gas Alliance (SAOGA).
112 Sturrock-Grindrod Offshore
Superior African offshore service
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How Sturrock-Grindrod Offshore is helping to cater for the needs of those investing in and capitalising on Africa’s vast oil and gas potential.
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Shale gas: The
Having been looked at from all sides, become irresistible to the countr Words by
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John
Shale gas
game changer
, the case for shale gas extraction has ries fortunate enough to have it
n O’Hanlon BE Oil & Gas
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Shale gas
C
lassed as unconventional gas along with coalbed methane and so called ‘tight’ gas, shale gas is fast heading out of that category. In the USA it has already had a significant and irreversible effect on the economy, as evidenced by a recent report from consulting firm IHS which says the boom in domestic energy now directly or indirectly supports 1.2 million jobs and adds more than $1,200 to average disposable income – and that these figures will increase to 3.3 million jobs and $2,000 per household by 2020. Technologies like hydraulic fracturing and horizontal drilling, which make it practical to recover previously unused oil reserves, have helped drive a 58 percent increase in natural gas reserves since 2007, cut the price of natural gas by nearly three-fourths, and sparked more than $120 billion in US based investment last year, according to the report. With 665 trillion cubic feet (tcf) of technically recoverable shale gas (that is, gas accessible with current technology) the USA comes in fourth behind China, Argentina and Algeria, according to The United States Energy Information Administration (EIA). For the USA, though, the principal benefit is that shale gas looks like finally severing its dependence on imported hydrocarbons.
Whether it’s in the UK, China or South Africa, all this upside depends on the use of hydraulic fracturing. Fracking has to be a contender for the most emotive word of 2013. On the one hand it could be a solution to the world’s energy problems, at least in the short term and potentially the stopgap that will allow us to enjoy cheap energy until the utopia of renewable self sufficiency makes fossil fuel a bad memory. On the other it will kill vegetation, pollute water sources and accelerate global warming. The famous earthquakes are the least of the publicly-aired problems. However it is not a new technology, in fact dating back to the late 1940s. Fracking has a lot of advantages over conventional O&G development because it has a low surface impact, and once a well has been drilled it will go on producing for decades with very little maintenance. The tremors, if felt at all, will be insignificant to those associated with ‘retreat’ coal mining which has left its mark on the English Midlands. Environmental hazards are more serious, with the possibility of watercourse pollution and the escape of gas to the surface. With clear regulation and the adoption of well understood practices by the industry it should be possible to avoid the problems that have been reported in the USA.
“If the revolution continues in the US and extends to the rest of the world, energy consumers can anticipate a future dominated by cheap gas” Paul Stevens
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Cuadrilla operations at Anna’s Road in Lancashire
Shale gas
“Shale gas could potentially meet a third of the UK’s gas demand with a very small surface footprint, benefiting the environment at the same time” IoD The USA is becoming the benchmark for other countries fortunate enough to have significant shale gas reserves. The EIA made a first pass estimate of a technically recoverable resource of 485 tcf of gas in South Africa’s Karoo Basin shale beds. Exactly how much of this is recoverable is not certain, but drilling and geophysical surveying is going ahead. As Mthozami Xiphu, Executive Director of the South Africa Oil & Gas Alliance (SAOGA) points out, even if the Karoo reserves amount to no more than 20 or 30 tcf their significance would be massive. “If we get a hundred or multiples of a hundred tcf we are looking at a game changer for energy in South Africa over the next ten years!” In the UK, according to an Infrastructure for Business report published this year by the Institute of Directors (IoD), “shale gas could represent a multi-billion pound investment, create tens of thousands of jobs, reduce imports, generate significant tax revenue and support British manufacturing. It could potentially meet a third of the UK’s gas demand with a very small surface footprint, benefiting the environment at the same time.” This on a very conservative estimate of UK reserves (see Francis Egan’s comments) at between 853 and 1,389 billion cubic feet (bcf). The IoD
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foresees 74,000 UK jobs supported by the industry; and “just as importantly, shale gas could support jobs in the chemical industry and wider manufacturing by providing secure energy and important feedstocks. This could help the UK to make more. In the US, PwC and Citi have estimated that at least one million new manufacturing jobs could be created over the next decade.” Britain would also share America’s energy security, with dependency on imports reduced from 76% to 37% in 2030, while the cost of net gas imports in 2030 could fall from £15.6 billion to £7.5 billion (using 2012 prices). Energy security is as important as energy cost – though there’s no telling how disrupting the finely balanced global O&G markets will impact global political relations. In a Chatham House report The Shale Gas Revolution: Hype and Reality published at the end of 2012 Professor Paul Stevens warns that the US ‘shale gas revolution’ has created huge uncertainties for international gas markets. “If the revolution continues in the US and extends to the rest of the world, energy consumers can anticipate a future dominated by cheap gas. However if it falters and the current hype about shale gas proves an illusion, the world will face serious gas shortages in the medium term.”
The case for UK shale gas Words by Francis Egan
T
he potential to extract natural gas from shale onshore in the UK is an opportunity that goes beyond helping to secure Britain’s gas supply. This valuable resource can create jobs and provide economic benefits on a local and national scale. The British Geological Survey recently published its estimate for the potential amount of shale gas in northern England, saying that there is 1,300 trillion cubic feet stored within the Bowland Shale Formation. If we can extract just ten per cent of this resource, it could meet the UK’s current gas demand for more than 40 years. Furthermore, at today’s gas prices, this recoverable ten per cent would have a market value of almost £1 trillion. With tax revenues from North Sea production in decline, Deloitte predicts a fall from £11.2 billion in 2011-12 to £3.7 billion in 2017-18, onshore gas production will help fill this gap by providing valuable funds to the Treasury. The United Kingdom needs sustained economic growth of which job creation will play a key part. The Institute of Directors, in its recent report ‘Getting Shale Gas Working’ predicted that shale gas development could create 74,000 new jobs, spanning a wide range of disciplines including geology, drilling, accounting, IT, construction and many others. The UK has the engineering, health, safety and environmental expertise, together with a robust regulatory
framework, to develop its shale gas resources in a safe and responsible fashion. We have a great opportunity to become a world leader in shale gas development as long as we successfully tackle the unfounded scare stories concerning hydraulic fracturing. And Britain too would enjoy a huge energy security dividend. Finally local communities will also benefit financially from potentially transformative funds in areas of shale gas production. Communities will receive £100,000 for every exploration well site that is hydraulically fractured in addition to one per cent of revenues from future shale gas production. This could equate to over £1 billion over a 20 to 30 year production timescale in Cuadrilla’s Bowland Basin licence area alone. The business case for the safe, responsible and effective extraction of shale gas is solid and can generate real and long-lasting benefits for the UK. We need to get on with the job in hand of understanding exactly how much natural gas stored in shale rocks thousands of feet underground can be viably extracted.
Francis Egan is CEO of Cuadrilla Resources, an independent UK energy company led by a team of experts in unconventional sources of exploration. www.cuadrillaresources.com
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EVENTS
Energizing the o
This October more than 8,500 industry pro for the fastest growing offshore exhibitio Offshore Energy ’13 15 & 16 October 2013 Amsterdam RAI | The Netherlands Founded in 2008, Offshore Energy has gone on to become the fastest growing gathering of offshore industry professionals, breaking new records with each passing year. In 2012 the event attracted 7,632 visitors representing 45 nationalities in total. Impressive as this number may be, even higher exhibitor, visitor and conference delegate numbers are expected for the 2013 edition. But what is it that draws such a large volume of people to such an event? In the case of Offshore Energy it is a multitude of factors including the ability to meet new prospects and generate sales leads, strengthen relationships with existing clients, introduce new products, services and technologies, raise brand awareness, showcase career opportunities to a targeted audience and explore industry best practices. Offshore Energy addresses the technical, operational and commercial challenges associated with future sector growth. The two-day event includes an exhibition where
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Preview
offshore sector
ofessionals will congregate in Amsterdam on and conference: Offshore Energy 2013
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The Ultimate Biodegradable Hydraulic Fluid
visit us at booth 10.104
w w w. p a n o l i n. n l
EVENTS
Preview
PANOLIN
The coastal waters around the Northsea are among the most regulated and controlled seas in the world with respect to the marine environment. Especially now as we are seeing an increase in offshore activity which includes all forms of renewable energy development. Lubricants and fluids for use offshore have to be formulated in accordance with OSPAR (Oslo Paris) regulations to meet the very highest environmental standards and need to be registered with all of the regulatory bodies involved. These bodies, CEFAS, SODM and KLIMA OG, administer the North Sea, Irish Sea and Norwegian Waters Areas of Special Scientific Interest and Marine Conservation Zones now require oils that are registered before any form of offshore activity such as oil and gas exploration, wind farm construction, tidal turbines and wave power generators can begin. PANOLIN has been involved in the offshore market for about 10 years and has a range of registered hydraulic oils called PANOLIN ATLANTIS. PANOLIN ATLANTIS oils are used in Remotely Operated Vehicles, Cranes, Seabed Cable Laying Machines and Subsea Mining Equipment. Operators who want to use these oils can do so in the full confidence that they are certificated which, along with the Material Safety Data, assist with the risk assessments that are carried out before any such work is undertaken. Original Equipment Manufacturers also offer PANOLIN ATLANTIS oils as factory fill which guarantees full compliance right from the start.
www.panolin.nl
an expected 500 supply chain companies will showcase their products and services. The event will see people in the fields of drilling, well completion, dredging, pipe laying, safety and environment operations, maritime services, shipbuilding, offshore contracting, offshore wind installation, subsea design, engineering and construction come together to share ideas. Next to that, there is an accompanying conference that covers key topics and solutions for the offshore community. The Offshore Energy 2013 Conference will bring together an international faculty of expert speakers, representing the entire upstream value chain, to discuss topical
7,632 Number of attendees in 2012
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EVENTS
industry developments, exchange ideas and network with over 900 conference delegates. Running parallel to the exhibition, the two day programme consists of high calibre panels, short technical sessions and annual meetings of industry organizations. The conference will also address developments in offshore hydrocarbons
as well as in marine renewable energy. The Offshore Energy Exhibition and Conference is complemented by a supporting programme that takes advantage of Amsterdam’s most attractive features The official networking event is organized in the afterhours of the first day of Offshore Energy. Attended by hundreds
“Offshore Energy addresses the technical, operational and commercial challenges associated with future sector growth” 18 | Be Oil & Gas
Preview of exhibitors, sponsors, partners and speakers, the evening offers an excellent opportunity to meet prospects or refresh existing business relations. This year’s Offshore Energy Exhibition and Conference will pay particular attention to advances and best practices in risk assessment and risk management. One of the confirmed speakers is Professor Tinka Murk who is currently developing a decision support model which can be applied in response to a calamity involving oil spills at sea. The research project is part of TripleP@Sea, a major research innovation program of Wageningen UR (University and Research centre) into the smart and sustainable use of marine ecosystems. The decision support model should make it possible to choose the best oil spill response, making use of site-specific information about ecosystems, economic functions, currents and meteorology.
Event Programme: Offshore Energy 2013 The Offshore Energy Exhibition expects to welcome some 500 exhibitors who will showcase their products and services to over 8,500 offshore professionals from over 50 nationalities. This year the event will feature international pavilions from Finland, Germany, Denmark and China. Offshore Energy Exhibition & Conference is the fastest growing gathering of offshore industry professionals. 15 October 2013 09:30 - 10:30 Official Opening Offshore Energy 2013 11:00 - 13:00 Offshore Energy Industry Panel 10:00 - 18:00 Exhibition opening hours 10:00 - 17:30 Offshore Energy Conference 16 October 2013 09:30 - 16:30 Exhibition opening hours 10:00 - 15:30 Offshore Energy Conference 10:00 - 16:30 4th Offshore Wind Installation and Maintenance Conference Admission to the Offshore Energy Exhibition is free of charge. Some conference sessions are ticketed events.
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EVENTS
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Preview “Offshore Energy’s Integrated Event Concept brings the right people together in the right places and for the right reasons” On Wednesday 16 October the Amsterdam RAI will host the fourth edition of Offshore Wind Installation and Maintenance Conference (OWIM 2013). This year marks the first time since the conference’s inception that it has been held simultaneously with the Offshore Energy Exhibition and Conference. By holding OWIM 2013 at Offshore Energy Exhibition & Conference, the event organisation expects to create mutual benefits for all participants involved. It is anticipated that by organising OWIM 2013 simultaneously with Offshore Energy it will offer participants in Offshore Energy an easy way to hear news of the latest developments in offshore wind. Conversely, OWIM delegates will have the opportunity to combine their conference participation with a visit to the Offshore Energy exhibition. What makes Offshore Energy worth exhibitors’ time and money? Offshore Energy’s Integrated Event Concept brings the right people together in the right places and for the right reasons. • Conference sessions are programmed to ensure delegates have ample time to
visit the exhibition and conference chairs actively encourage delegates to do so. • Dedicated functions on both event days such as the closing drinks bring conference delegates of all levels (technical sessions, C-level panels, senior level industry meetings) to the exhibition floor. • The official networking event (max. 600 participants) brings together exhibitors, partners, sponsors and conference speakers in an informal setting. • Offshore Energy has an active online/social media presence and represents a growing online community of professionals with whom exhibitors can communicate. • Offshore Energy boasts premium SEO rankings that exhibitors can benefit from. • Offshore Energy is actively promoted at global offshore events such as the Offshore Technology Conference (OTC) and Offshore South East Asia (OSEA).
For more information about Offshore Energy 2013 visit: www.offshore-energy.biz
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Abraservice Nederland
More than a
steel supplier COO of Abraservice Holdings, Michel Raets, and Sales Manager at Abraservice Nederland, Lars De Goede discuss the secrets behind Abraservice’s success, the role it is playing in creating a brighter future and Abraservice Nederland’s own contributions towards local and international growth
written by: Will Daynes research by: Marcus Lewis
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Lars De Goede and Michel Raets
Abraservice Nederland
A
European leader when it comes to the distribution of wear resistant and high yield strength steels, it is a hugely important belief within Abraservice that it should be seen to be more than just a supplier of such products. Rather it has successfully fashioned itself into a specialised provider of its customers’ complete solutions, from the analysis of their needs to the supply of finished and machined parts, ready for assembly. Part of the Jacquet Metal Service Group, Abraservice’s experience and technical knowledge ensure that it fully understands the needs of its customers and can offer support during quoting, following delivery and during service. It also acts as an advisor to the customers when it comes to selecting the right type of steel with the appropriate properties and during the processing phase. These customers operate in a diverse range of industries and environments including power plants, yellow goods, steel production, mines and quarries, cement works, recycling, civil engineering and the chemical sector. What these environments do all have in common however is that in each of them the quality and durability of materials is paramount. Abraservice today boasts a presence in more than ten European markets, including Belgium, Germany and the Netherlands, and employs over 230 people across these subsidiaries. “What makes the Netherlands a unique market to operate in is that it is a dredging country and what this inevitably means is that our focus here is on providing wear resistant and high yield steel to this
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market,” explains Lars De Goede, Sales Manager at Abraservice Nederland. “If you look at some of the core products that we sell, Creusabro for example, these are extremely well suited to this important market sector.” Creusabro is a high performance wear resistant steel and Abraservice is the exclusive European dealer of this highly reputable metal. “The success of this product has contributed to much of our growth in recent times as we have been able to convince an increasing number of customers to switch from traditional wear resistant steels,” De Goede continues. “With an average wear resistance that is between 40 and 45 percent higher than conventional 400HB water quenched steel, Creusabro delivers these users significant cost savings over the life of use. It also lends itself extremely well to processes like bending and rolling, which is vital when it comes to its use in dredging tubes.” Creusabro also possesses a rather special self-hardening quality that makes the product stand out from other wear resistant steels. By being able to be delivered in a softer condition users of the steel benefit from the fact that the drilling and machining of the piece is a much easier, less time consuming activity. Once this is complete Creusabro then
reveals its last trump card in the form of its self-hardening qualities which strengthens the steel over the course of its lifetime. Meanwhile, when it comes to high yield steels, Abraservice Nederland again supplies its customers with proven, reliable solutions that conform to international norms and standards. “Like our wear resistant steels, when it comes to high yield steels,” states COO of Abraservice Holdings, Michel Raets,
“We are always focused on the service that we provide, after all that word forms part of our name” 26 | be oil & gas
Abraservice Nederland
Steel cutter in action
Dredging tube
“what we are always aiming In Raets’ opinion, the to do is create higher value for reason for the continued our customers in the form of steady growth of the business things like greater mechanical is down to several core properties, bending and factors. “For starters we are Employees working for always focused on the service shaping properties and Abraservice that we provide, after all impact toughness. In doing across Europe that word forms part of our so we further differentiate name. One of the ways we ourselves and our offering from that of our competitors.” are trying to make life easier The market environment that Abraservice for our customers is by providing, where Nederland finds itself in today is undoubtedly required, the material they need complete a challenging one, defined as it is by with holes drilled and welding, bending and increased competition and record low price rolling complete. This means that what they levels. Despite these conditions the company receive from us is a product that can be used has managed to again break the mould by straight out of the box, so to speak.” recording increased tonnage growth in the Even though the company has exceeded first half of 2013 compared to 2012. all expectations when it comes to its growth,
230+
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its success does remain tied to a number of external factors, for example the level of investment in public expenditures in the Netherlands and of course the performance of the steel works industry. The existence of blast furnaces across Europe plays an important role in Abraservice’s own performance, so one can imagine the negative effect that the
closing of no fewer than twelve in 2012 had on the company. Nevertheless, there is room for optimism within the company. “We believe,” Raets says, “that even in the face of an environment that is very fragile we our strategy of bringing added value options to our customers and exclusive products to market will result in
“Throughout the group significant work is underway to improve Abraservice’s business and to guarantee its long-term success”
Bulk handling bucket wheel
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Abraservice Nederland
Offshore guide track with rotating tower
Abraservice remaining one of few suppliers of its kind to prosper going forward. We are certainly of the opinion that our higher levels of knowledge, experience and production capabilities place us in a much better position today than other nondifferentiated players out there.” After a 2012 that both Raets and De Goede openly admit to being difficult for the company as a result of business levels and the need to restructure the organisation accordingly, it is pleasing to find that Abraservice today retains the full support and confidence of its shareholders, confidence that has clearly been well founded what with the company now back
in the black in terms of profits and investing massively across the organisation. “Throughout the group,” Raets concludes, “significant work is underway to improve Abraservice’s business and to guarantee its long-term success. Perhaps what is most important to note however is that unlike many other companies out there, we are not just hoping and wishing for better times to come, rather we are taking a leading role as actors in making this future a reality.” For more information about Abraservice Nederland visit: www.abraservice.com/nederland
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written by: Will Daynes | research by: Adam Kalynuk
Boskalis Offshore is the driving force behind the offsho activities of Royal Boskalis Westminster NV, one of the figures within the maritime sector for the last 100 year
A century of se 30 | Be oil & gas
Boskalis Offshore
k
ore energy leading rs
service Be oil & gas | 31
Boskalis Offshore
E
Removal of an offshore platform
ven since a group of families went about setting up a new dredging business in 1910, Royal Boskalis Westminster NV has built itself a commanding reputation for being a leading global maritime services company operating in the fields of dredging, inland infrastructure, towage, salvage and offshore energy. Operational in more than 75 countries across six continents with an employee base of around 15,600 people and a fleet of more than 1,100 vessels and equipment, Boskalis’ main clients today include port operators, governments, shipping companies, mining companies, international project developers and oil companies. Boskalis Offshore is a part of Royal Boskalis Westminster NV, and in its own right is a leading expert in offshore contracting and services. The company supports the activities of the international energy sector, including oil and gas companies and providers of renewable energy such as wind, by offering its customers innovative and competitive solutions, including new installation and improved workability concepts. Today one will find Boskalis Offshore involved in the development, construction, maintenance and decommissioning of oil and LNG import and export facilities, offshore platforms, pipelines and cables, as well as offshore wind farms. In conducting its work the company leverages its vast expertise, which covers offshore pipeline, cable and rock installation, heavy transport, lifting and installation work, as well as diving and ROV services.
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The work that Boskalis Offshore is doing falls in line with its impressive track record of project delivery that includes a variety of highly demanding energy projects. This legacy of stepping up the challenges of its customers remains intact to this day and was the driving force behind the decision to expand further through the incorporation of the former heavy lift and subsea activities of its subsidiary SMIT in 2012. This move represented another step towards Boskalis Offshore becoming very much a one-stop solutions provider that can provide services across each phase of a project. Boskalis Offshore’s services are performed by its four subdivisions, these being Subsea Contracting, Subsea Services, Marine Services and Marine Contracting. The company’s Subsea Contracting team works specifically with landfall solutions, trenching and backfilling, and rock and cable installation, while Subsea Services focuses on tasks such as air/saturation diving and ROVs, subsea construction and removal and inspection, repair and maintenance works. The company’s Marine Services subdivision serves the market with chartering of anchor handling tugs (AHTs), barges and sheer legs, and complementary maritime project management and engineering. Finally the
Marine Contracting section of the business offers clients an integrated package on the basis of transport and installation (T&I) or engineering, procurement, construction and installation (EPCI) of marine infrastructure and decommissioning projects. Such projects include fixed offshore structures like platforms, offshore wind farms and tidal installation, and floating offshore structures including SPM buoys and FPSOs.
“For the near term we have a well-filled order book with many projects across all of our disciplines” 34 | Be oil & gas
Boskalis Offshore
Bosk a lis Of fshore’s Schoenmaeckers, Manager marine contracting activities for Oil and Gas, “involved the bring together various removal and disposal of two platforms and one subsea fields of expertise to create comprehensive, cost-effective dome in the North Sea as a Countries that Boskalis is solutions that are specifically major contractor on a lump present within today tailored to the customers’ sum basis. Decommissioning is a key focus for the Marine requirements. All of its Cont rac t ing business. endeavours are based on maintaining close contact with its customers We believe that with our knowledge, and a consistently high level of service to experience, and assets we can play a create a mutually beneficial and productive key role in the coming decommissioning requirements from the market.” working environment. Boskalis Offshore Marine Contracting While the company is more than capable of certainly has a strong track record when providing integral decommissioning packages it comes to the decommissioning of both including preparatory removal works with floating and fixed offshore structures. its diving support vessels (DSVs), lifting and “A recent project,” explains Michiel transport of the platforms with its sheer
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The platform is brought to shore for decommissioning
Boskalis Offshore legs and marine vessels, and disposal with its partners, challenges do remain. “The main challenges stem from obtaining complete and accurate data of the current facility status,” Schoenmaeckers continues. “Many assets have had several owners throughout the value chain, and consequently facility data regarding installations and alterations can be difficult to retrieve.” Nevertheless, the company is striving to overcome these difficulties and in doing so has placed itself in a strong position for both short and long-term growth. “For the near term we have a well-filled order book with many projects across all of our disciplines,” Schoenmaeckers states. “This includes the West of Duddon Sands offshore wind farm project in the Irish Sea for DONG Energy and Scottish Power Renewables, various rock installation works for companies including Statoil, subsea inspection and maintenance contracts for companies like Maersk Oil, and a substantial offshore contract with Impex for the Ichthys LNG project in Australia.” Meanwhile moves have been made by Boskalis to further strengthen and expand its range of services for the offshore energy sector through the acquisition of Dockwise, a provider of maritime services including transport services to the offshore and onshore industries and installation of extremely heavy
offshore platforms, and is now planning to incorporate this into its business. The combination of activities will place Boskalis in a better position to service clients with the optimal deployment of people and equipment, and enable it to fast track its ambition to enhance its capabilities with regard to transport and installation projects. It goes without saying that at the same time Boskalis Offshore will work to stay true to the qualities and strengths that have defined Royal Boskalis Westminster NV for over a century. For more information about Boskalis Offshore visit: www.boskalis.com
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A star shin
Commercial Director, Dimmie de Milander Group and how it is perfectly positioned to
written by: Will Daynes |
38 | be oil & gas
Starlite Aviation Group
ning bright
discusses the strengths of Starlite Aviation o capitalise on future growth opportunities
research by: Jeff Abbott
be oil & gas | 39
T
he Africa of the 21st century is often highlighted by the vast metropolitan cities that have been building up steadily to become centres of economic prosperity, yet the continents land is still home to a vast expanse of frontier land. It is on this land, particularly along coastal areas, that many of today’s most exciting oil and gas finds are being made. However, when it comes to operating in such areas, where logistical infrastructure is sometimes non-existent, it often calls for companies to rely on expert advice and local knowledge. It is here where companies like Starlite Aviation come into play. Established in South Africa in 1999, the group has undergone an extended period of growth to become a multi-faceted aviation business offering a range of helicopter services on a worldwide basis. Such services include relief contract work, oil and gas, passenger and cargo transport, helicopter sales and charter, maintenance and pilot training. “We began life providing purely disaster relief and support services,” explains Commercial Director, Dimmie de Milander. “From there we expanded into supporting various non-governmental organisations before taking on several contracts for our aircraft on a longer term basis. Through a combination of this contract work and the income that we derive from our training school we were able to begin developing our ability to provide support to customers operating in the offshore oil and gas industry.” The capital raised from its long term contracts also allowed Starlite to invest in its fleet of aircraft. “Every time we tie up an
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Starlite Aviation Group
aircraft to a contact we endeavour to use the money from that to make another aircraft ready to be put into service,” de Milander continues. “In many ways this keeps us one step ahead of the market as it often means we have aircraft ready to take on work as it becomes available.” Starlite’s fleet today includes aircraft from
Aerospatiale, Robinson, Bell, Sikorsky and Eurocopter. “Traditionally,” de Milander states, “we have leant towards the use of Eurocopter aircraft, however what we previously possessed was a slightly older, ageing fleet. Whereas the costs associated with upgrading to a more modern aircraft would previously have made such a possibility
“The group has undergone a period of growth to become a multi-faceted aviation business offering a range of services on a worldwide basis” 42 | be oil & gas
Starlite Aviation Group
Starlite currently operates 11 Puma helicopters
challenging for us, the fact that now we have virtually all of our aircraft tied into some form of contract we have the capital available to us to source new models.” Starlite is proposing a major expansion of its activities over the next few years, which will place increased pressure on the capacity of its existing fleet. Accordingly it has embarked on a fleet renewal and acquisition programme to augment existing aircraft, and cater for a continued shift in demand for its aircraft to newer technology and heavier aircraft types. Starlite recently signed an agreement to become the launch customer for Eurocopter’s new AS332 C1e aircraft. This new helicopter
is ideally suited to the medium-heavy utility market but could also be used to support oil and gas work. The AS332 C1e helicopter is the latest version of the popular Eurocopter Super Puma medium-weight helicopter. While Starlite isn’t the largest of aviation businesses, de Milander is keen to point out that there is one particular characteristic of the group that allows it to compete with almost anyone in the world when it comes to supplying aircraft, and that is that it has proven countless times that it can operate along supply lines in some of the most difficult, challenging and unpredictable parts of the world. “Whether our customers operate in the fields of oil and gas or high-end mining,
be oil & gas | 43
or are involved in non-government agency programmes, they almost always eventually end up working in countries with almost no aviation support infrastructure present. We have seen this in our work in places like Afghanistan, Pakistan, Kosovo, Myanmar, South Sudan and Mali, to name a few locations, and it has always been our focus to be able to provide these clients with safe, reliable support in these regions.”
Whereas the larger corporate helicopter suppliers tend to have a much more risk adverse approach to business, Starlite has always been found to be prepared to judge each situation and scenario by its individual merits before seeing how it can be of service to a client. That is certainly not to suggest that safety isn’t the most paramount of issues for Starlite, in fact quite the contrary. “Safety has been,
“Today the group’s talent for delivering services in some of the most remote parts of the world, let alone Africa, continues to shine through”
Pilots carrying out preflight checks
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Starlite Aviation Group
The Bell 412 reliably performs in the most extreme climates on the planet every day
is and always will be the “It was during the course of one of its tasks that the most important aspect of aircraft in question suffered our business,” de Milander an engine fault in a location enthuses. “Through the approximately ten kilometres operations of our training The year that Starlite from the nearest civilisation,” school we are able to was established in handpick the very best pilots he recalls. “In response to this South Africa for employment and these we organised for an engine to be sent from America to are invariably those with a that location, the necessary huge degree of experience, often gained through military service.” changes were then made and after just six The skill and capabilities of Starlite’s pilots days the aircraft was back flying again. and crew have been displayed countless times Understandably the client in question was in its lifetime. One particular example of this very pleased at the short amount of time that sticks out in de Milander’s mind involved required to remedy the situation and Sikorsky on of the group’s Sikorsky S92 aircraft which themselves stated that they doubted there are was providing offshore support for a client many other companies out there that could based off Namibia’s infamous Skeleton Coast. have handled such an issue so quickly.”
1999
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The Bell 212 Twin Huey on Jasper deck
Starlite Aviation Group Today the group’s talent for delivering services in some of the most remote parts of the world, let alone Africa, continues to shine through. Again in Namibia Starlite aircraft can be found operating in Lüderitz, along the south-western coast of the country. It is here, in one of the least hospitable coasts in all of Africa, that it has managed to retain a 99 percent dispatch rate of on-time deliveries. With offshore oil and gas activity increasing at a considerable rate along both the western and eastern coasts of Africa it is significant that those within Starlite are confident that it is well positioned to provide the types of services that will be in even greater demand going forward. “I believe that when you consider the growth of the oil and gas industry, our own position in that market and the fact that we have now proven capable of funding the addition of new aircraft into our fleet, it becomes clear that our primary mission need to be to continue delivering above expectations,” de Milander says. “There is such huge potential throughout the continent right now and it is our aim to be at the centre of that, capitalising on the opportunities that will arise. In targeting this we have been forming a number of strategic relationships in key locations such as Namibia, Tanzania, Kenya and Ghana, and in doing so we are making sure that Starlite will be wherever its clients need us to be in the years to come.” For more information about Starlite Aviation Group visit: www.starliteaviation.com
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Repsol Sinopec Brasil
A partnership made in Brazil Country Manager, JosĂŠ MarĂa Moreno discusses how the coming together of Repsol and Sinopec is bringing huge benefits to Brazil, both economically and socially
written by: Will Daynes research by: David Brogan
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Platform Marcos Pinto
Repsol Sinopec Brasil
I
t was in December 2010 that two of the and came as a result of a strategic alliance world’s foremost oil and gas companies formed between the governments of Brazil came together in one of the globe’s and China, with Sinopec International most exciting locations for oil and gas Petroleum Service of Brazil Ltd formally development, Brazil. Repsol Sinopec Brasil established in February 2005. was born out of a capital increase, in which Since the coming together of the two Sinopec, the largest oil and petrochemical parties in late 2010 the capital invested by company in China, contributed more than Sinopec has begun to be used to develop $7.1 billion towards Repsol Brazil. The several upstream projects in the country, transaction gave rise to a company that today some of which are thought to be among the possesses a market value of some $17.8 billion. most important discoveries anywhere in Repsol’s own history in the country the world in recent years. These include the dates back to 1999, when Santos Basin, Campos Basin Repsol Spain purchased the and Espiritu Santo Basin Brazilian subsidiary of YPF. oil exploration projects. In the years that followed At the time of the two the company pioneered companies coming together the process of opening the Repsol Chairman, Antonio Brazilian energy sector and Brufau stated that the deal was the first private company was a “good reflection of The market value of to invest in domestic the value created by the the company refining by investing in the investment of technical, Manguinhos Refinery in Rio human and material means de Janeiro. Furthermore, by Repsol in exploration, Repsol also pioneered the development of particularly in Brazil’s pre-salt offshore in natural gas projects by importing gas from recent years. Together with Sinopec, an Bolivia and Argentina to the thermoelectric internationally renowned and experienced plants based in Uruguayana and Cuiabá. partner, we can do our part in expanding In addition to the above, an Asset Exchange business relations between Brazil and China.” Agreement with Petrobras in December 2001 “The relationship between Repsol and saw the company take a 30 percent stake in Sinopec in Brazil has been, and remains, the Alberto Pasqualini Refinery (Refap) in Rio nothing short of excellent,” states Country Grande do Sul, as well as a network of service Manager, José María Moreno. “The strength stations concentrated in Central, Southeast of this partnership can perhaps best be and South Brazil, plus a ten percent stake displayed by the fact that every three in the field Albacore Leste, one of the months we hold special committee meetings largest oil fields in the country. attended by senior board members of the Sinopec’s time in Brazil began in 2004 two companies. At these meetings there can
$17.8 Billion
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Repsol Sinopec Brasil be as many as ten different business proposals presented and not once to date has any such proposal been met with a negative vote. To me this reinforces the belief that we are a collective entity that shares the same vision for what we want to achieve in Brazil.” Repsol Sinopec’s already considerable portfolio was further strengthened in February 2012 by the discovery of the Pão de Açúcar well at the Campos Basin. With estimated reserves of more than 700 million barrels of extremely light oil and three million cubic feet of gas, the Pão de Açúcar well represents the biggest discovery
ever made on the Campos Basin pre-salt site. In addition to the Pão de Açúcar well, Repsol Sinopec Brasil’s assets today include two producing fields, the Albacora Leste and the Sapinhoá fields, and one field currently under
ocean rig Ocean Rig is proud to have been chosen as the preferred drilling contractor by Repsol Sinopec for its development of the ultra deepwater drilling campaign in Block BMC-33 in the Campos Basin offshore Brazil. Block BM-C-33 is one of the biggest offshore pre-salt discoveries in Brazil. Ocean Rig are confident it will successfully contribute to Repsol Sinopec’s drilling campaign by providing a highly efficient and incident free drilling campaign by utilizing the most advanced and sophisticated ultra deep water drilling unit (Ocean Rig Mylos), second to none engineering solutions, and a
highly motivated and competent workforce for the development of Repsol Sinopec’s important and strategic development offshore Brazil. Ocean Rig has a keen desire to build up long-term strategic relationship with key clients. We are very excited to include a major integrated oil and gas company as Repsol Sinocpec to our list of partners. We are convinced this partnership will create great value and optimal returns to the shareholders of both companies. www.ocean-rig.com
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Safety | Field Development Planning | Marine and Facilities Consulting Subsea and Pipeline Engineering | Flow Assurance
Deep Thinking n
n
n
n
New sources of hydrocarbons present new opportunities Deeper water and remote hostile locations present new challenges Creativity is required to unlock value from these opportunities New opportunities and challenges require new thinking
K13112 Š 2013 KBR. All Rights Reserved
For over 25 years, Granherne has found the right development solutions with creativity and efficiency – your consultant of choice.
Delivering Consulting Excellence www.granherne.com
Repsol Sinopec Brasil
2010 The year that Repsol Sinopec Brasil was established
development, that being the Piracucá fields. In addition to these the company also has one block under assessment, BM S-9 in Carioca, and a total of twelve exploratory blocks, five of which are operated by the company. Each of these possesses a great degree of potential lying as they are in one of the world’s largest growth areas for hydrocarbon reserves. With its roots so deeply entrenched in the growth of Brazil’s oil and gas sector it comes as little surprise when Moreno starts
to highlight the contributions that Repsol Sinopec Brasil has made, and is making, to the sustainable development of the country by investing in solutions to protect the environment, communities and people. “All KBR KBR and its subsidiaries GVA, Granherne and Energo of our social programmes provide innovative, cost-effective services for subsea and initiatives are continuous and pipelines, FPSOs, fixed platforms, topsides and undertakings that aim to semi-submersibles. For optimized oil and gas solutions, make a significant difference you can trust KBR to deliver. to the world around us.” KBR – Project Management, FEED, Detailed Engineering, Repsol Sinopec Brasil’s EPCm and EPC Delivery for Onshore and Offshore Fixed policy for corporate social and Floating Facilities. GVA – Hull and Marine Systems, Conversions, Drilling responsibility is based on the Rigs, Engineering Management, Construction Support. award winning guidelines of Granherne – Field Development Planning, Feasibility, its holding company, Repsol. Concept and Pre-Feed Studies for Fixed and Floating The social responsibility Facilities, Subsea Systems and Flow Assurance. projects in which Repsol Energo – Integrity Management for Fixed, Floating and Sinopec Brasil invests aims Subsea Systems, Risk-Based Inspection Planning. to enhance the quality of life www.kbr.com of communities and provide
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benefits to society in general. “As a company,” Moreno continues, “we believe wholeheartedly in Brazil and that is the fundamental reason why we have all made a commitment to work even harder towards successfully developing strong energy solutions for Brazilians in a transparent and responsible way.” One of the ways that the company has been giving back to people for some time now is through the Repsol Sinopec Education Platform. Working in partnership with the country’s Navy the company uses this
programme to train artisanal fishermen and provide them with professional qualifications. Having begun in July 2009 it has since been rolled out to 17 cities in Brazil to the benefit of more than 10,000 people. From an environmental perspective, Repsol Sinopec is the only oil company partner of the SOS Mata Atlântica foundation, with which it develops various fauna and flora conservation and recovery initiatives. The project Florestas do Futuro (Forests of the Future) is one of the widest spanning programmes of its kind
“We are very much focused on bringing our oil exploration projects to production over the next two year”
The Repsol Sinopec Education Platform
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Repsol Sinopec Brasil
The Repsol Sinopec Education Platform in transit
and involves the recovery of riparian forests in hydrographic basins, something which is vitally important for the production of water and biodiversity conservation. Its partnership with the SOS Mata Atlântica foundation has enable the company to plant two forests with a combined area that is equivalent to 22 soccer fields in the riparian forests of Paraíba do Sul river and on the Tietê river basin in the state of São Paulo. Repsol Sinopec also invests in the environmental protection of the coastal area of the country. The Costa Atlântica program has joined up with five Brazilian NGO projects that are contributing to maintaining sustainable development and the balance of the environment, including the conservation
of natural, biological, historical and cultural estates existing in those regions. “As we look to the future,” Moreno concludes, “we are very much focused on bringing our oil exploration projects to production over the next two years. Achieving our targets for these projects is of crucial importance to us. Meanwhile, as we develop our existing assets we will continue to look at the possibility of adding new ones accordingly, both within Brazil and further across the region.” For more information about Repsol Sinopec Brasil visit: www.repsolsinopec.com.br
Be Oil & Gas | 57
Revolutionary energy provider
Arguably the greatest contributor to Venezuela’s econom social development, everything that Petróleos de Venezu S.A. (PDVSA) undertakes is in the interest of the countr inhabitants and of maintaining its unique oil sovereign
written by: Will Daynes research by: David Brogan
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Petróleos de Venezuela, S.A. (PDVSA)
rs
mic and uela, ry’s nty
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PDVSA
O
fficially recognised as the fifth largest oil exporting country in the world, the Bolivarian Republic of Venezuela also boasts the largest reserves of heavy crude oil, estimated at more than 99 billion barrels as of 2010. When putting such an astronomical figure into context it is easy to see why the petroleum industry is universally seen as being the backbone of the country’s economy, accounting for half of total government revenues and approximately onethird of its annual GDP. Petróleos de Venezuela, S.A. (PDVSA) is the state oil company of Venezuela, created by governmental decree on 30 August, 1975, during the first presidential term of Carlos Andres Perez and following the nationalization of the country’s oil industry. PDVSA’s operations officially commenced on 1 January, 1976, and to this day its operations are supervised and controlled by the People’s Ministry of Petroleum and Mining. Seen as one of, if not the main driver of the economic and social development of the country, PDVSA is in charge of the exploration, production, refining, storage, manufacturing, transportation and marketing of hydrocarbons. All of the aforementioned responsibilities are conducted in an efficient, profitable, safe and transparent manner, and are done so for the benefit of the Venezuelan people. In the past PDVSA has been ranked as high as number 66 among Fortune Magazine’s list of the 500 largest companies in the world and as of late 2011 it was estimated that the company could stake claim to having the
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PDVSA largest oil reserves in the Siemens world, with a certified total of Over the last decades, Siemens has been a key partner 296.5 billion barrels, a figure of Venezuela providing products, solutions and services, which represents 18 percent as well as experienced professionals for its economic and of the world’s total reserves. social growth. Following the end of the Siemens has cutting-edge technology and an environmental Venezuelan general strike in portfolio available for the development of Orinoco’s Belt Project in Venezuela specifically for grassroots refineries; 2003, a new era for PDVSA power generation, transmission, and distribution of its began with a renewed different blocks; petcoke-fired power plants; substations; emphasis being placed on the petcoke gasification; electromagnetically gravity drainage fact that the company existed for heavy oil production; water technology; intelligent in the hands of the Venezuelan wellhead clusters; cogeneration; oxy-fuel turbines; tank people, thus deepening the farms; and marine terminals. country’s oil sovereignty. Siemens is committed to provide answers tailored to our customers and markets’ needs. “The New PDVSA”, as it is www.siemens.com/energy often referred to as, today finds itself perfectly aligned with the Venezuelan State’s guidelines with each one of its workers committed towards the rebuilding of the company, which represents the building of a better future for the entire nation. This theme of building towards a better future also sees PDVSA participating in and promoting activities aimed at fostering the comprehensive, organic and sustainable development of the country in areas such
99
Billion Barrels Venezuela’s estimated reserves of heavy crude oil as of 2010
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Natural resources are getting scarce. Siemens makes sure solutions aren’t. Efficient use of fossil resources is necessary for a sustainable energy system. siemens.com/energy
Although we can harness energy and generate power in new ways, we still rely on fossil fuels. As we know, the supplies of these fuels are finite, and many countries have no such reserves of their own.
That’s why we have to be ever more conservative with our natural resources. We need to use them as efficiently as possible while we develop a sustainable energy system that provides affordable power for all.
Answers for energy.
as agriculture, industrial, infrastructure, manufacturing and marketing of goods, services, and the financing of healthcare, education, housing and food programs. The goal is to establish a proper connection between hydrocarbon revenues and the Venezuelan economy, with an active contribution to the actual process of building Socialism. In recent years PDVSA has also seen its international activities expand at an unprecedented pace. From its five offices, located in Argentina, Brazil, Cuba, United Kingdom and the Netherlands, the company maintains extensive commercial relations with its existing partners across the globe as well as with those nations that possess a great deal of interest in investing in the oil sector. PDVSA’s international activities actually go even further beyond its five offices. In Europe for example it participates through its affiliate PDV Europa, which is headquartered in The Hague, Netherlands, and holds a 50 percent stake in the companies, Rulor Oil of Germany and AB Nynäs Petroleum, while it also has a presence in London where PDV UK acts as a market intelligence office. Meanwhile in the Caribbean, PDVSA operates the refinery and storage affiliate Isla Refinery in Curaçao, through a long
term lease contract. Additional affiliates in the region include Bonaire Petroleum Corporation (BOPEC) and Bahamas Oil Refining Company (BORCO), which operate storage terminals in their respective regions. Other international assets include CITGO, an affiliate in the United States and refineries all over the world.
“PDVSA participate in and promote activities aimed at fostering the comprehensive, organic and sustainable development of the country” 64 | be oil & gas
PDVSA
The last decade or so has also seen the company open up subsidiaries and affiliate entities in many important developing markets, including Columbia, Ecuador, Uruguay, Bolivia, Argentina and China. PDVSA China was created in August 2005 specifically to evaluate both upstream and downstream business opportunities in the Asian region. Together with its other affiliates it continues to help diversify the Venezuelan oil market. In the last several years the company has commenced work on a number of significant national projects, including the construction of several new refineries in the country. These include the Batalla de Santa Inés Refinery in
Barinas state, which will possess a processing capacity of 100,000 barrels per day following an investment of $2.9 billion. In its first phase it will start producing gasoline and diesel, in addition to fuel oil to meet electricity generation needs. The plant is expected to be ready by 2014. Meanwhile, the Cabruta Refinery in Guarico state will have a processing capacity of 221 thousand barrels per day from the Faja Petrolífera del Orinoco (Orinoco Oil Belt). It will be built in three stages with construction expected to start in 2017. As opposed to Batalla de Santa Inés which will produce fuel, Cabruta will initiate its operations as a heavy crude upgrader, but
be oil & gas | 65
“PDVSA’s workers are as committed today as they have ever been to the defence of national sovereignty and energy sovereignty in Venezuela” later in 2027, it will be a fuel refinery. Another area of work for the company centres on the design of two industrial services condominiums. These will ensure the supply of services such as natural gas, electricity, hydrogen, nitrogen, plant air, instrument air, vapour, boiler water, cooling water, drinking water and fire fighting water to meet the demands of the
66 | be oil & gas
Extra Heavy Crude Upgrading Complexes in the Junín and Carabobo areas. PDVSA estimates that the first services condominium will start operations in the year 2015 for the Junín area and in the year 2016 for the Carabobo area. PDVSA’s participation will be 60 percent, which entails an investment of $5.8 billion. Moving forward, much of the company’s
PDVSA
plans tie in with The Siembra Petrolera Plan (Oil Harvest Plan) 2005-2030, an initiative introduced in Venezuela in August 2005. This Plan sets forth the oil policy guidelines until 2030. These include supporting national socioeconomic development with the purpose of building a new economic development model which is fairer, balanced and sustainable in order to fight poverty and social exclusion, and boosting the energy integration process of Latin America and the Caribbean. The plan also calls for the oil industry to become a geopolitical instrument to encourage the creation of a multipolar system which benefits developing countries, and counteracts the current unipolar system.
PDVSA’s workers are as committed today as they have ever been to the defence of national sovereignty and energy sovereignty in Venezuela. They are aware that adding the greatest value possible to hydrocarbons is among their duties, guided by the principles of unity of command, teamwork and efficient use of resources, while transparency and accountability also constitute key values for the company that it promises to hold on to for many decades to come. For more information about PDVSA visit: www.pdvsa.com
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Growing gas – a two-way flow
68 | Be oil & gas
NGC Trinidad & Tobago
How the National Gas Company of Trinidad and Tobago (NGC) looks to fulfil a new mandate to extend its influence internationally
written by: John O’Hanlon research by: Robert Hodgson
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Installations at NGC’s Beachfield facility
NGC Trinidad & Tobago
W
elcoming delegates to the 2013 Energy conference in Port of Spain in January, the Minister of Energy and Energy Affairs Kevin Ramnarine set out his vision for NGC to be the vehicle for growth through which the country can expand its footprint at home and abroad. NGC should be encouraged, he said, to become to Trinidad & Tobago what Statoil is to Norway or Petrobras to Brazil. The man charged with overseeing that transformation is Indar Maharaj, who was appointed NGC’s President in April 2012. Maharaj, a chemical engineer by training, knows the industry intimately from the downstream perspective, having worked in it for more than 30 years, many of them with Point Lisas Nitrogen Limited (PLNL) on the Point Lisas Industrial Estate, home to most of the heavy gas-based industry in Trinidad. The years ahead are certainly going to be a time of change, he agrees, but NGC has all the experience and the energy it will need. NGC was formed in August 1975 because the government of the day needed an entity to manage the natural gas purchase contract with Amoco and to transport the gas from Amoco’s fields off the east coast of Trinidad to the Trinidad & Tobago Electricity Commission (T&TEC) for power generation, as well as to other smaller customers. At the time the company was formed there were just a few miles of 16 inch pipeline transporting about 300 million cubic feet a day of gas. Today some 38 years later the company operates 1,000 kilometres of pipeline and has assets of over US$5 billion, making it one of the
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largest companies in the Caribbean and Latin America measured by assets. “The existing NGC business model, which has worked well, will however not provide the accelerated growth that is desired,” said Ramnarine. “The question now for NGC becomes one of capital efficiency and growth. Companies we are told grow through pursuing a strategy of diversification, divestment, acquisition and internal growth or combinations of these strategies. The time has come for NGC to consider the forward and backward vertical integration of its business and seek investment opportunities outside of this country.” The Minister pointed out that NGC is already in discussion with three multinational companies in Trinidad and Tobago for the acquisition of all or part of their assets, and that it is also examining investment opportunities in Africa. For NGC this means taking a new direction and dramatically broadening its horizons beyond its core business of natural gas marketing and transportation.. While NGC has invested in upstream oil and gas ventures, these have been limited to Trinidad and Tobago. As Maharaj explains it: “NGC has always been an inward-looking organisation - that is to say that all our investment has been made in Trinidad and Tobago. We now
think it is about time we did two things. One is to get ourselves more involved in both the upstream and the downstream as an investor; the second is to start looking outside of Trinidad & Tobago for opportunities to invest in the energy sector.” Downstream opportunities include programmes like the provision of compressed natural gas (CNG) for transportation, and the supply of gas to the light industrial
“We are encouraging investors to look downstream, and... we will always be looking to see if there is an opportunity for us to take a stake” 72 | Be oil & gas
NGC Trinidad & Tobago
NGC Tobago pipeline gas receiving facility
and commercial sectors the industry will be boosted by developing another hub at on the islands. “We are the Union Industrial Estate encouraging investors to look downstream, and where in La Brea on the south-west they do see an opening we peninsula of the island. “We will always be looking to see will develop the infrastructure if there is an opportunity for industrial development NGC’s current asset base and we have a priority to get for us to take a stake.” In less than 20 years, he adds, investors in there so we can Trinidad and Tobago has expand the markets for gas. been able to create one of the world’s most We are now putting the structures and the groups in place that will allow us to go and diversified natural gas economies. The thrust of the government in the next start looking for those investments.” phase of the country’s industrial development Here serious progress has already been is towards a more robust downstream industry made. In April, seven entities including the that focuses on projects that will go beyond Ministry of Energy and Energy Affairs, and first-level gas conversion, as well as further the Japanese firms, Mitsubishi Corporation LNG expansion. The greater diversification of and Mitsubishi Gas Chemical Company
$5
Billion
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signed a project development agreement for the establishment at the Union Industrial Estate of Trinidad and Tobago’s first Methanol Dimethyl Ether (DME) plant. The initial investment for phase one of the project is estimated at $850 million with completion envisaged in 2016. According to Minister Ramnarine, this project, which could include further phases, “presents several distinct but unique opportunities for Trinidad and Tobago with respect to the further diversification of the energy sector, growth of the economy,
development of the South Western peninsula, regional energy and local content.” One of the mandates for NGC at the time of Mr Maharaj’s appointment was that the organisation should be prepared to get involved not only in local projects like the Methanol to DME project But also projects outside of Trinidad and Tobago. Of particular interest is the continent of Africa, both east and west. A relationship is developing rapidly with Tanzania, where large gas deposits have recently been discovered
“The question now for NGC becomes one of capital efficiency and growth”
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NGC Trinidad & Tobago
The change from a local to offshore. NGC has already a global operator will not be been providing technical services to Tanzania, and in without its growing pains, but 2012 NGC, National Energy the policy is in place and NGC’s and the Tanzania Petroleum management is now in active Development Company negotiation for the purchase of an interest in upstream signed a Memorandum of Phase 1 investment assets. The Trinidad Gas Understanding (MOU) for in DME project Model of Development has a co-operation between both framework that emerging gascountries’ energy sectors. rich economies would love to Tanzania finds itself now where Trinidad and Tobago was in the replicate. Success in this area will allow NGC, 1980s, he says. “Hydrocarbon deposits were for the first time, to provide its employees being found and were ripe for development with international experience. Discussions but no infrastructure was in place. We have continue on prospective investments in Ghana been through that experience in the recent and Tanzania and the Eastern Caribbean Gas past and I believe we have a lot of experience Pipeline Project, he says. “The Tobago pipeline and know how to monetise those resources.” will provide the staging point for the proposed
$850 million
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“We will encourage people to switch from liquid fuel to natural gas in their vehicles” Eastern Caribbean Pipeline Project, which is expected to supply approximately 119 million cubic feet of natural gas per day to Barbados, and potentially to other islands in the eastern Caribbean.” He is referring to a 55 kilometre natural gas pipeline from the BHP Billiton Gas Export Platform (GEP) in the Angostura Field off the north-east coast of Trinidad to a receiving facility on Tobago. The Tobago pipeline started operation in November last year. “In another decade I would like to see NGC being an organisation that is involved in
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most of the natural gas and energy value chain, both in Trinidad and Tobago and overseas.” For this to happen, people will be crucial, he emphasises. “The human capacity within this company has been developed to do what we have been doing for many years; that is accumulating gas, distributing and selling it. The things we want to do now call for a different approach. We need to start retraining people and we need to start looking for new talent to bring in to the organisation to complement the huge experience we
NGC Trinidad & Tobago
already have.” To do this he wants to target people of Trinbagonian origin working in the international oil and gas industry. Given the new opportunities NGC can now offer he is convinced that many will respond. After all this is a great company to work for, as evidenced by the low turnover among its 800 strong workforce: “I can say for sure that once they come they don’t go!” At the same time as gaining recognition in the international arena, Maharaj concludes, NGC is on the verge of becoming more deeply involved in the daily life of the nation than ever before. One of the major developments that is happening on his watch is delivery of a CNG transportation revolution in Trinidad and Tobago that the government wants to see come about. “We will encourage people
to switch from liquid fuel to natural gas in their vehicles. That we think will touch most of the population. We are a national gas company, looking to expand our CSR programme and integrate it with the fabric of society by looking at areas where there are developmental needs, sport development, health, culture and education so that people can identify with us more than they have been able to in the past.” It is a prospect that excites him, as the leader of a company mandated to expand and, crucially, with the financial resources it needs to make that happen. For more information about NGC Trinidad & Tobago visit: www.ngc.co.tt
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A finer refinery
for Jamaica After giving good service for 30 years the Petrojam refinery at Kingston Jamaica is to be upgraded
written by: John O’Hanlon research by: David Brogan
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Petrojam
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Petrojam
P
etrojam is a limited company in the world), has a rated capacity of 38,000 jointly owned by PDVCaribe, barrels per day (bpd) and an average daily a subsidiary of Petróleos de output of up to 35,000 barrels. Increasing Venezuela (PDVSA) which owns its capacity has clearly been needed for 40 percent of its shares, and a long time. In fact the refinery upgrade the Petroleum Company of Jamaica (PCJ). project evolved out of a memorandum of Petrojam was established in 1982 when understanding signed in August 2005 between the Government of Jamaica purchased the PJ Patterson the Jamaican prime minister at Kingston Refinery from Esso, which had the time and President Hugo Chavez, with an built and operated it since 1964. Put simply, expected 2010 completion date. Petrojam’s job is to supply refined products to However despite the fact that the front the people and businesses of Jamaica. end engineering design (FEED) for the $1.3 As Jamaica’s primary energy company billion Refinery Upgrade Project (RUP) Petrojam now has the was completed in 2009, responsibility for managing the project was stalled by its key asset, the refinery, and changing political priorities manufacturing cost-efficient, on the part of the Venezuelan high quality products to government. But now the RUP has been brought back ensure an uninterrupted to the front of the queue. supply of energy to keep the nation on the move and Last year, in a filing to the Planned investment in US Securities and Exchange working – it is a vital part of refinery Commission (SEC), the the island’s economy. Among the services that rely on Venezuelan government said Petrojam are the supply of aviation fuel for that PDVSA has brought forward the start the airlines that fly in and out of Jamaica, date of the Jamaica project to 2014, a year bunkering for the ships that use its ports, earlier than previously expected. The plan is to increase production at the supplying power generation plants and providing a reliable supply of affordable lead Kingston refinery from 35,000 to 50,000 bpd, and the urgency of the project was underlined free petrol and diesel to the filling stations. The Jamaica government benefits from by Jamaica’s Energy Minister Phillip Paulwell agreements with Venezuela and Mexico under in May when he claimed the Petrojam plant which feedstock – crude oil – is supplied to could face the risk of being shut down if the the refinery. Negotiated in 1983 the current necessary works were not undertaken. The conditions of the San Jose Accord ensure the cue to its moving back to the top of the agenda supply of 29,000 bpd of crude. The Petrojam is Paulwell’s discussion with Venezuelan refinery, located on a 76 acre site on Kingston counterparts at this year’s PetroCaribe summit Harbour (the seventh largest natural harbour in June, following which he announced the
$1.3
Billion
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Beyond Safety. SolutionS oriented. • Established in 1991 • Committed to providing quality products and service for the safety and protection of our customers, their employees, their facilities, and our environment • Region - Supporting the Caribbean and
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agreement with Venezuela that the Petrojam Jamaica, monitors product quality on a oil refinery expansion and upgrading project 24-hour basis. Staffed by specialist technicians who test, analyse and certify products against would again become a priority. The refinery was originally built, using a internationally recognised standards, the lab simple hydroskimming model, using modern is at the heart of the operation. It also offers optimisation principles in its design, and in commercial testing to third party clients for general that has proved fit for purpose over octane levels, water and chemical analysis, the years. However the equipment and process and particulate levels in fluids. It is also able streams do need upgrading, to monitor dust, lead and CO and this investment is also a levels in the atmosphere. Another area of best vital part of the project. The practice is to be seen refinery is a very competent facility, staffed by qualified in Petrojam’s logistics personnel and with some arrangements. Within the excellent ancillary facilities. plant a small but effective For example its laboratory, team is responsible for the Upgraded capacity of the only fully equipped economic evaluation of Petrojam refinery petroleum laboratory in incoming feedstock. The
50,000 BPD
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team co-ordinates crude oil imports, marine transportation of crude oil and finished products for export as well as to domestic customers. Delivery by sea is cheaper and safer than road transport. Refined products for the Montego Bay Terminal and supplies to large volume customers such as the light and power plants and bauxite companies are delivered by sea using Petrojam owned and chartered vessels, operating from the company’s berth in Kingston Harbour. The next task is to update the FEED report to base it on more up-to-date figures than those available in 2008. Once that is done the real work can progress, and, as Mr Paulwell says: “It will enable us to produce those things that we use in Jamaica — LPG, gasoline, and low sulphur diesel — so that we will be almost selfsufficient, and be able to export some of it,” he said, pointing out that the by-product, petcoke, will enable the generation of 100 megawatts of cheap electricity. Upgrading of the refinery will ensure its viability in the long term and allow for the installation of treatment facilities to meet new environmental specifications for diesel oil and gasoline. One of the many outstanding programmes of personal development that Petrojam pursues is its youth development programme. In particular its Summer Employment
Programme, which each year selects 100 or more secondary and tertiary level students to undertake paid work and training during their long vacation. The objective is to give these students a taste of what it is like to do a real job in an industrial enterprise, and how they can gain satisfaction from adding real value to Petrojam by working on active projects. Some of them subsequently join the company explains Production Manager Telroy Morgan, a
“If our upgrade is done in short order, Jamaica would be the only English speaking Caribbean country using and selling ULSD fuel” 84 | be oil & gas
Petrojam
key motivator for the students, but that is not by any means the sole object of the programme. “A number of students come back after the Summer Employment Programme and grow into key roles with Petrojam: the others get invaluable experience here and go on to contribute to the growth of the nation as a whole.” Telroy Morgan should know: he himself came into Petrojam via this route and now occupies an important management position. He is not alone, and the enthusiasm of the student cohort for the scheme is palpable: they are exposed to a variety of different disciplines from highly technical roles and engineering to admin and management experience that will stand them in good stead in any business. The target date for competing the refinery upgrade project has now been set for
January 2016, giving Jamaica a world class facility capable not only of producing the quantity the island needs but of supplying it with new and improved products such as the ultra low sulphur diesel (ULSD) fuel that was launched in Jamaica on June 25. “If our upgrade is done in short order, Jamaica would be the only English speaking Caribbean country using and selling ULSD,” said Phillip Paulwell – this is important as only countries that can supply USDL are able to import diesel vehicles equipped with advanced emission control. For more information about Petrojam visit: www.petrojam.com
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Total Namibia
A total solution for Namibia As Total Namibia embarks on the next stage of its development under a new Managing Director it continues to prove its considerable worth to Namibia’s many industries and the country as a whole
written by: Will Daynes research by: Candice Nice
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Total Namibia
H
aving had an established name has become synonymous with. presence in the country since Namibia has declared Vision 2030—the 1968, Total Namibia first date by which it wants to be considered as opened its doors in 1977. a developed economy. To achieve that, its Today the subsidiary of the infrastructure, particularly its port at Walvis continent’s leading petroleum marketer Bay and its railways, will require significant has a total of 28 service stations across investment. For its part Total will play a Namibia, 77 commercial sites, five sites crucial role in helping Namibia to achieve its located within its national parks and four long term target, specifically where it relates depots, which are found in Windhoek, to its own infrastructure in the country. Otavi, Gobabis and Walvis Bay. In addition, Total Namibia also supports the While Total has always been a well- government’s skills development programme, established player in the retail fuel market, offering on-going training to staff, contractors supplying individual vehicle owners, and emerging entrepreneurs. Furthermore, it small business enterprises, continues to sponsor bursaries government vehicles and and offers an in-house internship programme. the agricultural sector, the organisation has made In this regard Total particularly strong strides Namibia continues to work in Namibia to tap into diligently to upgrade all of Service stations the its evolving commercial its facilities to bring them company has across sector, particularly the into line, and subsequently Namibia mining industry. above, its own Total Group It goes without saying safety and environmental that in the mining sector, machinery and standards. Such has been the collective equipment utilises all requires specialised effort of the company that it will not be very lubricants, greases and oils, all products that long at all now before all of its facilities and Total has a long track record of supplying infrastructure comply with not just its own across Africa. In engaging the market, internal requirements, but with the very Total Namibia has worked hard to secure highest of European standards. OEM contracts on the back of such supply In late February of this year the company contracts that it already held, with the likes held a special event to two significant milestone events. The first was in recognition of Toyota for example. In pushing forward with securing OEM of the inauguration of its N$10 million contracts, Total Namibia’s game plan has Ondangwa “Kings” Total Service Station. been to regularly engage companies and The opening of the station marked the launch expose people and perspective clients to the of a new environmentally friendly look for standards and best practices that the Total the business, one that will ultimately see it
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Stowe Holdings Stowe Holdings is a supplier of Innovative services related to Fuel Management Solutions & Site Systems architectures in the African Fuel and Energy Market since 1990. Stowe specialises in Site System Automation, including Systems Integration, Equipment and Software Procurement, Asset Warehousing, Supply-chain Management, 24 hour Helpdesk, Support and On-site Maintenance. With its strategic systems-partner accreditation structures in place, Stowe remains unique in its ability to
service our customers’ networks of site systems technologies, no matter what the architecture, make and/or model of such solutions. As a results our customers enjoy unparalleled value & services that cannot easily be matched in the very specialised field of fuel management systems and site automation. We are proud to associate ourselves with some of the biggest names in the Petrochemical market-place, such as Total who are as committed to Service Excellence as we are” www.stowe.co.za
www.stowe.co.za
Total Namibia
revamping each and every one of its filling stations in Namibia. This strategy embraced the T-Air global concept that first arose in April 2012. T-Air is an abbreviation of “Total Amelioration de l’image reseau” which means “Total Improvement of the Network’s Image’. From an aesthetic point of view T-Air utilises natural colours, environmentally friendly materials, low energy buildings, underground fuel storage facilities and water that is being harvested and recycled to reduce their carbon footprint. This roll-out of Total’s new look service stations is being executed through the world. Its aim is to provide the network with a well-defined identity, one that is based on a more modern brand image, with service stations that are better integrated into their landscape.
The event in February also acted as a farewell for the man who oversaw the opening of the “Kings” Service Station and the start of the T-Air rollout, outgoing Managing Director Seggy Kistasamy. Having led Total Namibia into an exciting new period in its development as a business, Kistasamy has since handed over the reins to the new Managing Director, Chris Hoffmann. Having previously headed up Total’s operations in Lesotho, Hoffmann is now taking the company forward into a new era, one driven by his own ambitious objectives and plans for Total Namibia. For more information about Total Namibia visit: www.total.co.za
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Delivering quality o
where it’s needed
Global Sourcing & Supply’s (GSS) multi-disciplined app business has allowed it to become one of the foremost p of complete site support services and operations in all o
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Global Sourcing & Supply (GSS)
of life
most
proach to providers of Africa
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GSS catering service
GSS
W
orking to the highest international standards, Global Sourcing & Supply (GSS) is an integrated facilit y management and contract supply operation supported by an advanced logistics capability. GSS is a wholly owned subsidiary of BMMI Group, headquartered in the Kingdom of Bahrain, and currently operates in Qatar, Iraq, Djibouti, Mali, Gabon, Ghana, Burkina Faso, Kenya, the Republic of Sudan and South Sudan, providing flexible options for logistics and service delivery and engaging with a multitude of international governments, non-government organisations and industrial clients. The GSS team also provides complete site support services and offers turnkey solutions in the establishment and management of remote site operations to industries as diverse as mining, construction, agriculture, oil and gas. With Africa’s remarkable growth, driven in large part by a minerals and energy boom, numerous companies seized the opportunity to explore new oil rigs in the region which opened the door for GSS to expand its integrated facility management solutions and contract logistics. In recent years, GSS has managed to successfully cater to the needs of major companies delivering quality services in the most rigorous locations in Africa. When it comes to Integrated Facility Management (IFM) solutions, GSS covers the entire spectrum, from the provision of prepared meals and a range of ancillary ser vices inclusive of housekeeping,
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laundry, operations and maintenance, to camp retail (commissary) services and leisure requirements. GSS understands the importance of delivering quality services in the most remote locations in Africa and therefore it ensures that it caters to its clients, using only the best quality, handpicked ingredients. The company’s catering staff ensures all food is
expertly displayed and served hot and fresh from the pan. Service options range from selfservice cafeterias to retail coffee shops and seated, full service à la carte style. In terms of the company’s janitorial services, GSS’ satisfaction lies not only in making sure its clients reside in clean and comfortable surroundings, but also for them to experience the high quality services provided
“GSS has managed to successfully cater to the needs of major companies delivering quality services in the most rigorous locations in Africa”
GSS cleaning/janitorial services
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GSS
GSS laundry service
by its team. It is GSS’ goal to clockwork, its team provides door-to-door pick-up and pay attention to every single drop-off of laundry, handling detail and to keep its clients’ workplace tidy and their all clothes, uniforms and lodgings homely, to meet and linen with the utmost care. Tons of goods handled exceed their expectations. As GSS’ ultimate goal is continuously by GSS’ Through the years, GSS to ensure its clients get their major prepositioning has built its reputation work done in a safe and well warehouse protected environment, the on providing outstanding company is constantly looking cleaning services using state of-the-art equipment, environmentally to utilise advanced systems with customised preferred products and unique cleaning solutions to protect every aspect of its client’s processes to ensure clients’ facilities are company assets. Its services in this field range cleaner and healthier than ever before. from 24-hour security, entrance control and GSS’ complete range of laundry options central control to remote monitoring of CCTV includes Express, Same Day and Overnight and security system audits. services for guest and employee laundry. Like GSS has been actively supporting customers
30,000
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GSS can source temporary structures
“GSS truly believes that over the next few years it is likely to grow and continue to attract and retain clients in the oil industry� in Africa with major contract logistics capabilities for several years. An example of this is a major prepositioning warehouse operation in East Africa handling up to 30,000 tons at any point in time including receipt, warehousing and redelivery of bagged commodity items in support of humanitarian efforts in the Horn of Africa. In addition, GSS provides sourcing services for components, spare parts, repair engine
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parts or any FFE requirements. Preferred supplier agreements in all major markets allow its dedicated team to match up customer requirements with a manufacturer’s part number, sometimes within hours. The company then ships to remote locations, expediting the order within 48 hours. Its suppliers cover all aspects of technical supply and demand, no matter how big or small. Utilising a multi-model approach, GSS has
GSS
GSS contract logistics
supported rations in contingent and active war zones, while maintaining full product integrity throughout the supply chain so that it arrives fresh for troops. Furthermore, it has trading agreements in place with major suppliers and is able to process requirements through varied consolidation capabilities within a short span of time. GSS’ team is also capable of sourcing, shipping and fully integrating the provision of temporary structures for accommodation, kitchens, messing, recreation, offices and retail. During the past few years, GSS was faced with uncertainty driven by increased competition, geo-politics and economic indicators in the African region. However, with GSS’ solid experience and reputable
GSS camp design
name in the African market, it has managed to enter new countries, secure new contracts and enter new acquisitions and joint ventures this year. The future of Africa looks promising and therefore GSS truly believes that over the next few years it is likely to grow and continue to attract and retain clients in the oil industry. This high demand for its IFM solutions has been also driven by its exceptional services provided by its experienced and skilled technical staff across the industry. For more information about Global Sourcing & Supply (GSS) visit: www.gss-contracting.com
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industry focus:
South African Oil & Gas Alliance
Changing the
South African energy game On the brink of world class oil and gas discoveries South Africa is ready to join the global top table, with a major role to be played by the South African Oil & Gas Alliance (SAOGA)
written by: John O’Hanlon research by: James Boyle
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industry focus:
SAOGA
I
t’s not all about cubic feet and billions of dollars for Mthozami Xiphu, Executive Director of SAOGA since he took over leadership of the organisation from Warwick Blyth in February this year. Xiphu is a man who feels passionately that developing the oil and gas resources, onshore and offshore could radically change the dynamics of South African society. The country has achieved massive growth since the cancer of apartheid was excised some 20 years ago: but it pains him to admit that many citizens have yet to feel the full benefits of that growth and of the democracy they now enjoy. They expected better. A big part of the solution, he believes, lies in tackling unemployment, inequality and deprivation, between them the main causes of the petty crime and other social ills that plague the poorest parts of the country. “The resources we are sitting on are located in some of the most economically depressed parts of the country. By developing them and growing businesses to support, supply and provide services to the large investors we can look to create a lot of employment, grow skills and lift people out of the cycle of deprivation. That is what excites me!” Before moving to SAOGA Xiphu had racked up seven years as CEO of the Petroleum Agency of South Africa (PASA), which is the licensing authority under the Department of Mineral Resources. SAOGA has a similar goal in the development of national assets to the benefit of the people, and is also governed by the Mineral and Petroleum Resources Development Act of 2002, however as a representative body for the upstream industry
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industry focus:
SAOGA
one of SAOGA’s main aims is to smooth the path for IBN Business & Immigration Solutions’ services range from participants seeking to come consulting and identifying the most effective and practical into South Africa. One of immigration solution for the corporation and its assignees, the principal changes we collection of documents from assignee and employer, may expect to see following preparing the applications, submissions, as well as follow ups the appointment of the new with the appropriate authorities until the permits are issued. We pro-actively manage a possible extension or departure CEO is closer co-operation process and also ensure that the assignee and family are between these two key bodies compliant with local immigration requirements at all times. We in the twin tasks of winning have long-term consulting relationships with multi-national greater energy security for corporations in the motor, mining, oil and gas, and financial the country and growing the sectors, attesting to our high quality personal service. economy. Our relocation team offers home finding assistance, school Having played a major role search, local registration, insurance and bank account as well as departure services, helping the expatriate assignee in developing the sector over and family to settle in, integrate and feel truly at home in the last decade, he is very their new city. excited about the potential for www.ibn.co.za SAOGA at this particular time. “Our member companies tend to be in rig repairs, fabrication, pipelines and all the supply and support services of the upstream industry in South Africa.” The organisation is not a parastatal in the mould of PASA, he explains, because as well as receiving funding from the Department of Trade and Industry, the Western Cape government and the City of Cape Town where it is based, it is substantially funded by its members. “We are a true public-private partnership!” The reason for its location in this part of South Africa is partly historic, partly because this is where a cluster of upstream supplier companies had developed in the province in response to upstream growth in West Africa and the establishment of domestic production in Mossel Bay in the late 1980s. It is also home to the port of Saldanha, where it is proposed to establish an industrial development zone Oil rig in the bay of Cape Town
IBN Business & Immigration Solutions
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industry focus:
(IDZ). Today SAOGA has a national footprint and focus although the Western Cape remains the de facto centre of upstream supplier activity in South Africa. SAOGA has never been more relevant, he says. “Over the last twelve months we have seen immense growth in exploration activity in South Africa. We have had no fewer than seven seismic surveys right round our coast. Those surveys will naturally lead to exploration, depending on the outcomes of the analysis, and of course the more exploration the more the chances of discoveries leading to production. We are excited about that.” The mission of PASA was to get companies to pick up licences off South African shores: now that majors like ExxonMobil, Total, Shell and Chevron together with a number of smaller
Aerial view of Cape Town’s waterfront
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players are joining indigenous players like PetroSA and Sasol, the field is beginning to get busy at last, he says. Though the results of the seismic surveys he referred to are not yet available, there are encouraging results from surveys along the west coast, notably the Orange Basin, where a proven reserve of 201 billion cubic feet (bcf) of gas has just been confirmed by Sunbird in the Ibhubesi gas field, with a probable 540 bcf recoverable in Phase 2. “Ibhubesi could contain anything from 800 billion to a trillion cubic feet, and they should be producing within the next two years.” When it is considered that the Mossel Bay gas field, which feeds the Mossgas gas-toliquids project that has been producing for 20 years and supplies South Africa with five
SAOGA
“Ibhubesi could contain anything from 800 billion to a trillion cubic feet, and they should be producing within the next two years” percent of its gas requirements, was floated on a reserve of one tcf, the current offshore reserves are significant. However there are far more significant gas reserves onshore, in the form of coal bed methane, mainly in Mpumalanga and Limpopo Provinces. These are located in existing coal mining areas, and the PASA had reported that there could be anything form ten to 20 bcf to be extracted here.
If that sounds exciting, well it is. But it is nothing like as exciting as the prospect of shale gas discoveries, and it is these that Mthozami Xiphu thinks have the potential to be a game changer for the South African energy industry. At the moment, there is only a preliminary assessment, albeit an authoritative one. The United States Energy Information Administration made a first pass estimate of a technically recoverable resource of 485 tcf of gas in the Karoo Basin. PASA evaluated this assessment and concluded that, owing to the limited amount of available data in the area, it is impossible to quantify the resource accurately, other than to say that it is potentially very large. It wisely said that additional, modern subsurface information should be obtained through drilling or a geophysical survey. However as Xiphu points out if Mossgas is so important at one tcf, even if the Karoo reserves amount to no more than 20 or 30 tcf their significance would be massive. “If we get a hundred or multiples of a hundred tcf we are looking at a game changer for energy in South Africa over the next ten years!” Shale gas is certainly present in large amounts, enough to elevate South Africa to fifth in the world’s gas producing nations after Mexico, Argentina, the USA and China. And drilling has not even taken place yet though
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industry focus:
technical cooperation permits (TCPs) for exploration have been obtained by a number of companies such as Falcon Oil & Gas, Sunset Energy, Shell, Anglo Coal and a joint venture between Sasol, Chesapeake and Statoil. He explains why. “The one method for extracting shale gas at the moment is hydraulic fracturing (fracking), and that method is controversial all around the world. Our government has been very cautions. Originally we at SAOGA imposed a moratorium on exploration pending the completion of the licensing round across the Karoo, however the government then followed it up and said everything should be put on hold pending a study to advise on a reasonably safe method of extraction that would be environmentally robust.” The southern Karoo where the shale gas is lodged is a water stressed area, he adds, and the farming community is worried over the water issue given that fracking requires a lot of water. And all stakeholders worry about the potential for contamination of the water supply either by escaping methane or by fracking chemicals. “These are not insurmountable problems if you have the proper regulatory and monitoring systems, and this is what the government is putting together at this time before it allows companies to start drilling in the Karoo.” The United States has achieved energy self
sufficiency through its shale gas, and South Africa could do the same. Xiphu chaired the working group that presented the report on shale gas exploitation to the Department of Mineral Resources in 2012. As part of this he and his team visited Pennsylvania and Texas, then recommended that further specific studies should be carried out. But he’d like to see this done as soon as possible, and exploration to commence. Not only would it be a massive boost to the economy, it could transform the lives
“If we get a hundred tcf of shale gas we are looking at a game changer for energy in South Africa over the next ten years!” 108 | Be oil & gas
SAOGA
Established road, rail, sea and air routes make South Africa an ideal logistics base
of some of its poorest communities as it brings in investment and jobs, stimulating the growth of mid-stream and down-stream industries. And these would be skilled jobs, with opportunities for much needed training and development. Xiphu’s vision for SAOGA is to make it a truly national organisation. Though it already has members from Gauteng to the Eastern Cape and KwaZulu Natal, he would like to see more participation from other provincial governments. That may take a little time. In the short term, he is throwing all his energies into achieving the declaration of the Saldanha IDZ and has been having meetings with key organisations such as the Department of Trade & Industry, Transnet and the National Ports Authority to ensure that the declaration happens before the end of July. Saldanha will do for the oil and gas sector what Coega does
for the automotive industry in South Africa or Richards Bay for coal, he says, and he can’t wait for it to happen. Another priority for SAOGA is skills development, he continues. “We cannot advertise South Africa as a hub for upstream production industry in the continent if we don’t have the relevant skills. We must encourage skills development, interactive development, intentional institutions and universities. And we must work with the industry to ensure that the people we train are able to get jobs, even at the apprenticeship level if not at permanent employment level, so that they immediately get the experience. Then as exploration takes off, discoveries are made around South Africa and the industry grows and grows in South Africa with discoveries around South Africa we can poise ourselves to be a real hub for the whole of southern Africa!”
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industry focus:
SAOGA
“We cannot advertise South Africa as a hub for upstream production industry in the continent if we don’t have the relevant skills” After all, South Africa has the deep water ports, the ship repair and fabrication facilities and the infrastructure that the industry needs. It makes sense for a company operating off Tanzania or Mozambique to repair its vessels and FPSOs in nearby South Africa rather than in Singapore or Aberdeen, he points out. It is all there on their doorstep – the only thing that needs building is the skills base specifically related to the oil and gas industries. SAOGA pulls together the training institutions across South Africa and matches them up with its member companies: “For example we are running a programme right now for 20 students to be trained on our west coast and we got Chevron to give financial support to that venture. And we place the trainees with our members so that they get the hands-on experience to improve their learning and output. Take welding. In our industry that is a highly specialised skill – run of the mill welders won’t do. We see it as part of our remit to ensure that these high level engineering skills are provided as well as just the basic trade qualifications.” South Africa is not really known yet for its oil and gas industry but its advantages are beginning to be realised. “We are not a Nigeria at this stage but even before the shale gas came on the scene we were already attracting interest.” His enthusiasm is based on realism,
he insists. The industry has a great future and SAOGA is one of the main driving forces. What might slow things down? Well he is lobbying for greater certainty and transparency in legislation – this would really leverage the advantage of the IDZs. “If you are having even minor repairs done to high value equipment you still have to put down large sums in security even if you can claim it back later.” And some proposed changes to the Minerals and Petroleum Development Act worry him: it is important for companies considering doing business in South Africa to know precisely what the government’s percentage carried interest in exploration and production rights will amount to. While Mthozami Xiphu is entirely behind the principle that the country needs to retain a fair share of the proceeds of its resources, especially for the benefit of its previously disadvantaged citizens, his members and potential members have the right to know in advance exactly what that share will be before they commit to invest. This legal and fiscal certainty will ensure South Africa’s attractiveness as an investment destination. For more information about South African Oil and Gas Alliance visit: www.saoga.org.za
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industry focus:
Superior African
offshore servi
General Manager for Oil and Gas, Rob Gardner highligh which Sturrock-Grindrod Offshore is helping to cater for those investing in and capitalising on Africa’s vast oil an
written by: Will Daynes research by: James Boyle
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Sturrock-Grindrod Offshore
ice
hts the ways in r the needs of nd gas potential
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industry focus:
Checking refinery
Sturrock-Grindrod Offshore
U
ntil as recently as 2010 it appeared that all southern African countries had to offer in terms of oil and gas were scattered pockets of natural gas off the coasts of South Africa and Mozambique. The event that changed this perception was the discovery of a potential 500 trillion cubic feet of gas across South Africa and Mozambique, in addition to an estimated eleven billion barrels of oil in Namibia. Founded in 1969 as both a shipping agency and clearing and forwarding company, Sturrock Shipping, was until its merger with Grindrod, one of the largest, privately owned shipping and logistics companies in South and East Africa. Based in some of Africa’s fastest developing nations, including Ghana, Angola, Namibia, Kenya, Tanzania, Mozambique and Madagascar, the company specialises in providing a full supply-chain service for the handling of sea transport and the import and export of goods into and out of sub-Saharan Africa. “Since we spoke almost a year ago,” begins General Manager for Oil and Gas, Rob Gardner, “arguably the most significant development on the oil and gas side of the business was the bringing together of Sturrock Shipping and Grindrod Ships Agencies, a business with more than 100 years of operating within southern Africa and a vast portfolio of assets behind them, from their own fleet of vessels to warehousing, terminals and container depots.” What the bringing together of these two entities has done is not only create a much stronger and more diverse ships agency operation, but also provided the company
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industry focus:
Vessel support
formally known as Sturrock Shipping with an injection of capital, infrastructure access and a plethora of diverse service offerings and know-how. “Today,” Gardner continues, “we boast a presence in eleven African countries which, if you look at most of the other large branded ship’s agencies, gives us an unrivalled subSaharan footprint. By employing local people in these countries and combining
their hands-on skill and local expertise with the more specialised international shipping and offshore expertise that the group offers, we are reaffirming ourselves as a truly African company that possesses the ability to offer first world services and expertise wherever it is required.” In addition to actually being able to boast that it has a physical presence on the ground in some of Africa’s most important
“We are reaffirming ourselves as a truly African company that possesses the ability to offer first world services and expertise wherever it is required” 116 | be oil & gas
Sturrock-Grindrod Offshore
Maputo Port aerial
Overseeing work
markets, Sturrock-Grindrod compared to those of a decade Offshore also has the or so ago, has contributed unique ability to offer significantly to more and several different types of more businesses looking service that few, if any, of to our shores to explore for African countries in its competitors can match. oil and gas, specifically in which Sturrock-Grindrod These include the ability places like Namibia, Kenya, is present to service and replace life Madagascar, Mozambique rafts on vessels in remote and Madagascar where African ports as part of its drilling is currently on-going. role as exclusive agents for the company Couple that with the improved technology Survi-Tech and to handle the supply and and the ability to explore at greater depths transportation of pyrotechnics, something and you can see the great level of potential which can be a technically challenging that we have here.” and time consuming task for a customer. In addition to this potential there is also “I think it is fair to say,” Gardner states, the tremendous physical infrastructure that “that the favourable nature of Southern the country has, and will have, at its disposal. Africa’s exploration laws today, particularly At Saldanha Bay, for example, a huge amount
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industry focus:
of funding has been allocated to develop what will be an exclusive oil and gas facility, one where the deep water draft is capable of accommodating the next generation of rig ships, as well as shallower facilities for traditional jack up rigs. This type of infrastructure investment also bodes well for the country’s long term future in other areas linked to the oil and gas sector. “With the work that we have on-going
in places like Saldanha Bay,” Gardner says, “it also provides the opportunity for companies like ours to take on greater amounts of ships agency work in the fields of ship repairs, maintenance and the repatriation of crews and auxiliary vessels related to the industry.” As optimistic as the future appears for South Africa, Sturrock-Grindrod Offshore is equally as keen to prosper in markets further afield. “While we have all this know-how and
“We look at Africa and our goal is to be the recognised company here when it comes to oil and gas related services”
Oil rig
118 | be oil & gas
Sturrock-Grindrod Offshore
Rob Gardner, General Manager for Oil and Gas
expertise down here in South Africa,” Gardner highlights, “we realised the need to expand some 15 years ago and whilst we already have an extensive and well-established subSahara African footprint in place, our goal is to cover as much of Africa as possible. While Africa remains a predominantly commodity based economy, the signs are that this could be changing thanks to the well-publicised oil and gas finds in countries like Mozambique.” It is obvious that Sturrock-Grindrod Offshore shares the view that Africa is a hugely dynamic area, yet more importantly it is clear that the company believes itself to be well positioned to grow with it in the years to come. “If you look at the management structure of Sturrock-Grindrod,” Gardner concludes,
“you will see it is a young, highly driven team. We look at Africa and we believe we know this market and our goal is to be the recognised company here when it comes to oil and gas related services. What we want is for companies coming into the market to say to themselves that, if they want to prosper, they need to be talking to us, because we are the guys who have people on the ground, the agency crews, the logistical staff, and the supply chain staff. These are all highly qualified, dedicated people and it is they who help keep us at the top of our game.” For more information about Sturrock-Grindrod Offshore visit: www.sturrockgrindrod.com
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