- South African service and supply companies are missing out on huge opportunities in both upstream and downstream activities from a number of oil-resourced West African countries such as Angola, Nigeria, Cameroon, Gabon and Equatorial Guinea. This is according to Paul Runge, managing director of Africa Project Access.
Major oil multinational companies will be spending approximately US$ 10 billion annually in West Africa's oil and gas industry over the next five years - some US$ 5 billion of which is budgeted annually for Angola alone. At present, South African companies are supplying less than one percent of the sector's needs in the region.
- Buyers are purchasing a wide range of products and services such as steel, welding and scaffolds, Mr Runge informs. "Other available opportunities include training as well as risk, environmental and social impact assessments. There is also a great need for none-core services and products such as printed documentation and computer products, while security services are often required in areas where there is political or social tension."
While there are plenty of opportunities, Mr Runge warns that South African companies wanting a greater share of the US$ 10 billion will do well to pay attention to technical, economic and other challenges whilst operating in the region.
In order to succeed in securing projects, certain basic requirements must be fulfilled - meeting stringent quality specifications being one of them, Mr Runge advises. For instance, South Africa is sub-Saharan Africa's most industrialised nation and yet local manufacturers of steel tube and pipe have to meet American Petroleum Institute standards especially for deep-water operations. In some cases, even the production mills are inspected.
Furthermore, major oil companies prefer long-term framework agreements with trusted long-standing suppliers. Nonetheless, these buyers are willing to consider and test new suppliers, according to the South African analyst.
- In the past, there has been a tendency to procure almost automatically from Europe and North America as most major oil multinationals originate from there, says Mr Runge. "In addition, there is a perception that Africa-based suppliers cannot provide the required products and services," he adds.
Mr Runge is one of the speakers scheduled to address delegates at Oil Africa 2004, to be held in Cape Town from 9-11 March. The Cape Town exhibition and conference, which is heavily publicised, is focusing on "promoting South Africa and the Western Cape as the ideal servicing hub for West Africa's oil and gas industry" and "capitalising on the USA's intention to source 25 percent of its oil requirements from Africa by 2015."
Delegates to Oil Africa 2004 will also hear about the changing status quo as oil companies are now paying more than a regulatory role and are exerting pressure on the multinationals to source services and products from Africa where appropriate, according to a media release by its organisers.
Mr Runge concludes that local companies can learn from each other and he sees the forthcoming Oil Africa 2004 conference and exhibition as a suitable platform for companies to network with each other as well as market their services and products to major local and international oil and gas stakeholders.
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