Editorial

The third sub-Saharan oil, gas and petrochemicals conference, “Oil Africa 2008,” took place in March. Ms Buyelwa Sonjica, MP, Minister of Minerals and Energy, was forthright in her message Yes, she admitted, there are a few challenges facing South Africa, but now, she said, is the time to invest with specific focus on the growth and development of small and medium enterprises that support the oil companies operating on the continent.
Whilst international speakers highlighted global oil demand trends, the impact of the rising price of a barrel and predicted when oil production is likely to peak, African speakers were firmly of the opinion that local content was vital to ensure that the oil producing countries in Africa derive maximum benefit from the oil boom.
This message also came through loud and clear at the annual gathering of the African refiners Association held prior to Oil Africa 2008.

Here the main issues discussed included the threat of a tsunami of products arriving from new mega-refineries in India and the Middle East and the history of economists undervaluing local refining products versus product imports; the tightening of product specifications; and educating policymakers about the value of a refinery.
A big announcement was the news that in a joint effort with the ARA, the World Bank is financing a US$500 million study which will paint a picture of what will happen in the industry in the medium to long term. Read more about this on page 16.

Readers will most likely have been avidly following the saga of the An Yue Jiang which has been in the news since mid-April. [There’s something fishy about this story. Despite the controversy, the fact is this was a perfectly legitimate business deal, made last year – long before the elections took place on 29 March. It was not in contravention of any laws (see page 31), there’s nothing illegal about transporting arms and ammunition to and from one country to another, so how did it become such public knowledge that a shipment of arms was going to Zimbabwe? Another interesting facet to this story is how the various countries have banded together in their resolve not to unload the ship if she docks at their ports. Mozambique, Angola, and Namibia all share the same sentiments.

On a related topic the International Ship and Port Facility Security Conference was held in March. It was well-attended by local and international delegates and raised a few interesting issues, and some solutions. While the National Intelligence Agency was there in force, and SARS Anti-Smuggling Division as well as many Transnet employees, it was a shame that the South African Police Service was not represented, especially in view of the pivotal role they play in Port Security in particular. There is no question that all parties concerned need to congregate and thrash out some form of integrated protection-and-response force to deal with the growing threat of organised crime.

One of the main speakers at the conference, Dr Henri Fouché, is an expert on maritime piracy. He pointed out that piracy is on the increase, and for the first time Nigeria has displaced Indonesia as the main hot spot in the pirate stakes. What needs to be done to address and arrest this growing trend? Can we in South Africa be any use, particularly along the besieged West Coast of Africa? Both security-related topics are explored in this issue.
From a business perspective it’s all go; boats being launched, ships being double-hulled, orders placed for newbuildings, new shipyards opening. Is this growth spurt sustainable, given that the oil price rise must have a dampening effect on future trade? Lloyds List is of the opinion that orders will halve in 2008. But with the current backlog at most shipyards – up to four years in some cases – it looks like business as usual for some time to come. With the spiraling cost of shipbuilding, conversions are starting to seem a lot more attractive to some, and upcoming sales will be keenly watched by shipbrokers who expect benchmark prices to be set in the near future. More about this on page 32.
Smooth sailing until next time.

Editor
 

Cover Story

DCD-DORBYL Marine recently secured the contract to undertake comprehensive upgrade work on the Saipem 3000 heavy lift, dynamic positioning vessel. The vessel was dry docked in early February with a scheduled lay-up period of 72 days. The scope of work includes the overhaul of the vessel’s six thrusters and the upgrading of its living quarters’ accommodation. Prior to the overhaul, DCD-DORBYL Marine prepared the dry dock using 223 of its specialised concrete docking support blocks and the vessel has been elevated to a height of 2.2 metres to facilitate the removal of the thrusters.