Ideally nestled between western and eastern Africa, Cape Town's upstream oil and gas industry is hoping to take advantage of its enviable position. The South African Oil and Gas Alliance (SAOGA) was established for the purpose of facilitating and encouraging entry into these frontier markets The organization was originally established to support the service side of the industry, and is still largely funded by the provincial government. Today SAOGA has 150 members, drawn from all parts of the country.

Warwick Blyth, SAOGA's chairman, sees the opportunities on Africa's east coast as "truly massive. The amazing thing is that there is nothing there at the moment; Pemba Bay is a sweeping little African village with a very small port and no development. It takes about nine days by road for a container to reach Pemba from South Africa. There is no supply chain, and it is difficult for traditional U.S. and European centers to bring equipment through; even flying people in is a challenge because you still come through Johannesburg on the whole," Blyth says.

"There is therefore a huge opportunity for South African industry to step up and provide large parts of the supply chain; not necessarily the highly specialized stuff, but certainly much of the spare parts, repair and maintenance, medical support and construction work can and probably will come from South Africa." Nevertheless, while Blyth remains excited about the prospects, he understands that competition will be fierce, and that South African companies will by no means be guaranteed work in the future, "The oil and gas industry is used to working in far-off places; the competition in Mozambique will be the same as anywhere else in the world. There is the possibility that all work can be done on a completely remote basis, as it is in Angola and Kazakhstan, but the alternative of drawing on South African industrialization is more efficient."

Garth Strachan, chief director for the Industrial Development Division at the Department of Trade and Industry agrees with Blyth. "South Africa boasts a rich history in pioneering and developing primary commodity related technologies, including capital equipment into the mining sector as well as very significant supply chains for a wide range of products and services in the upstream oil and gas industry. South Africa is therefore well placed to service the burgeoning oil and gas exploration and exploitation industry in sub-Saharan Africa."

Comments