IBIA in Africa forum
delivery of fuel in many West African ports has been compromised by lack of access to berths, but that the increase in delivery by trucks to terminals is seen as a positive development. This decline in port infrastructure in West Africa has lead to an increased interest in offshore bunkering opportunities. Offshore bunkering also benefits from being exempt from import taxes on the oil – thus providing a cost-effective option to passing vessels that have the advantage of not having to pay port fees.
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supply coupled to decrease in demand has made it a more stable market, but one that no longer attracts the demand many would like it to.
only eight are active. “There are young entrepreneurs that are unable to obtain financing and supply. We want to support the transformation of the sector,� he said.
Supply challenges in Richards Bay have resulted in the port not being seen as a serious bunker port, while Cape Town is currently still suffering from the impact of losing its pipeline supply that resulted in the disappearance of the international fishing fleet seeking bunkers.
He confirmed that TNPA is working in conjunction with the South African Maritime Safety Authority (SAMSA) to explore opportunities for further offshore bunkering operations around the South African coast.
Perhaps the most significant development, however, in the South African market has been the establishment of an offshore
“Our coast is challenging and seas are rough. Algoa Bay is relatively protected, but there might be other opportunities,� he said.
ship-to-ship (STS) supply in Algoa Bay. By all accounts, the passing shipping trade has embraced the new service and Aegean Bunkering can count the move into the South African market as a very smart one.
As one of the main sponsors of the Forum, Aegean’s Jean-Jose Metey, (Executive Director), used the opportunity to showcase the history and rapid development of the company in the offshore bunkering sector on an international basis. He admitted that some of the shortcomings of the local South African bunkering industry had prompted the company’s decision to pursue the offshore opportunities locally.
On the whole, however, the West African bunker market has declined due to a lack of activity in the previously buoyant “We see radical change in this regard. There is a chaloffshore oil and gas sector lenge in terms of B-BBEE and we need to address this. as well as the significantly It is a non negotiable that as long as you do business reduced level of seismic in the port you need to comply with B-BBEE Level 4� surveying activity. In addition, container trade has declined due to struggling economies, but Hughes says that military vessels are still active in the region and providing some cushioning for the market. According to Hughes, general challenges in West Africa relate to:
Non-MARPOL compliant suppliers Expensive fuel due to taxes Continued piracy, although on the decline
Demurrage delays Under-developed infrastructure with lack of alternatives
On the east coast of the continent, Hughes describes a limited bunker demand in a market that is impacted by expensive product and limited infrastructure. Excluding Mauritius from his analysis, he sees high levels of bureaucracy, lack of suppliers and stock shortages as being the major disruptors to developing a more buoyant bunker sector, but says that gas discoveries and Chinese investment may still provide positive input for the future.
South African developments Discussing some of the recent developments within the South African bunker scene, Hughes highlighted a number of disruptors that have impacted local traders and suppliers. The dissolution of Joint Bunkering Services (JBS) – a long-standing institution in the industry – has resulted in the bunkering barges in Durban becoming contracted independently to the oil majors. “Durban is not what it used to be,� says Hughes explaining that the increase in
“South Africa is still a strategic bunker supplier,� says Hughes. “We have well-run barges in the port and you get what you pay for. The fuel is on-spec and the quantity is correct. The South African bunker market is reputable, reliable and price competitive,� he concluded.
TNPA transformation objectives After weighing in on Transnet National Ports Authority’s (TNPA) transformation objectives, delegates grilled Captain Rufus Lekala (Chief Harbour Master in Cape Town) on some of the more intricate details. “We see radical change in this regard. There is a challenge in terms of B-BBEE and we need to address this. It is a non negotiable that as long as you do business in the port you need to comply with B-BBEE Level 4,� he told the delegates.
“We saw opportunity to develop something completely new,� he said noting the port restrictions on delivery, lack of storage, aging infrastructure and limited product capacity in South African ports. Although many believe that the Algoa Bay operations will impact on the local bunkering sector, Metey says that they are not competing with existing bunkering services and that they are creating a new demand for additional services. Aegean also supplies by barge into Port Elizabeth Port and Coega Port, which have until now, not had any supply available by barge. Metey hinted at the prospect of creating a land-based storage facility saying that “the floating storage is a transitional measure�.
Mauritius gets down to business
“Our end objective is to promote growth and encourage entrepreneurs and industrialists,� he said adding that protectionism and barriers to entry needed to be removed.
While Hughes may have alluded to the emergence of a bunkering success story in Mauritius, Rajanah Dhaliah, CEO of the State Trading Corporation (STC) in Mauritius made it abundantly clear that the island was intent on driving an agenda to develop Mauritius’ bunkering sector into a petroleum hub. With a clear understanding of the strategic relevance of their geographic location, the Mauritian government is focusing on the ocean economy to drive economic development.
Lekala also highlighted that of the 38 bunker licences awarded in 2013, currently
Dhaliah described a focused drive to develop enabling policy at government
Questioned on the timelines associated with their transformation agenda, Lekala said that a clear five-year timeline had been identified and that within that time bunker operators would need to comply with their 51 percent black ownership criteria.
Maritime Review Africa SEPTEMBER / OCTOBER 2016
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