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Upstream oil and gas opportunities across Africa
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30th November 2012
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Upstream activity in Africa’s oil and gas indus- try is growing rapidly, not only in significant existing and emerging opportunities in East and West Africa but also in substantial new investments – worth billions of dollars – that are expected to be made in oil and gas projects in sub-Saharan Africa, says nonprofit organisation South African Oil & Gas Alliance CEO Warwick Blyth.
These projects would last decades, throughout the full exploration, development and production life cycle of assets, he noted at a presentation in September by Atlas Copco. The industrial group supplies air and gas compressors.
Blyth added that there would be significant regional development around the oil and gas projects in Africa and these opportunities would require several specialised services.
“We have a good idea where the main growth points will be and finding ways to develop capacity on the ground will be an important priority – businesses that can do this will have an advantage,” he said.
Growth Points
Blyth pointed out that most of the activity in sub-Saharan Africa involves multibillion-dollar projects, including multinational energy corporation Chevron’s Benguela, Belize, Lobito and Tomboco (BBLT) fields project, a major offshore oil development in 600-metre-deep water just off the coast of Angola, in the lower Congo basin.
The BBLT project, which comprises a R4-billion capital investment in an offshore platform, pipelines and storage facilities, produces 200-million barrels of oil a day.
Another hub of activity is Ghana’s Jubilee project, a deepwater offshore oilfield that was discovered in 2007. It includes a floating, production, storage and offloading vessel aimed at recovering 1.8-billion barrels worth of potential reserves.
Capital investment in this project amounts to R5-billion.
Further, Blyth mentioned that, while domestic upstream activity is modest in Africa, there are still exploration projects in several local regions.
These include the Kudu and Ibhubesi gasfields in the Orange River basin, in Namibia; the FA gasfield and the Sable, Oryx and Oribi oilfields, in Mossel Bay; immature exploration in the Tugela basin, in KwaZulu-Natal, including four wells with oil system indications; and active offshore exploration and onshore gasfields in Mozambique.
Blyth also highlighted poten- tial shale gas reserves in the Karoo basin, which could potentially hold the world’s fourth-largest shale reserves, as a potential energy game-changer for South Africa, with the ability to secure the country’s energy independance, despite the questions of economic and environmental feasibility.
SA a Potential Hub
Considering projected activity in sub-Saharan Africa, Blyth pointed out that equipment and services would be required to help develop the new oil and gas discoveries in Africa.
He highlighted how well-positioned South Africa was to function as a hub for oil and gas in sub-Saharan Africa.
Blyth listed human capital and lifestyle, a strong industrial institutional base, regional linkages, a strategic location and transportation and logistics infrastructure as among the many benefits South Africa could offer as a hub.
“Aside from being a strategic location, South Africa has various suppliers that are capable of supporting projects and several attractive propositions for the regional upstream industry, including a diversified regional supplier base, logistics and supply, upstream repair and maintenance, an attractive location for regional head offices, as well as training and skills development,” he said.
Downstream Demand
Compressor and generator hire company Rand-Air expects to capture a large portion of the rental market in oil and gas exploration sites off the Angolan, Namibian and Mozambican coastlines, based on customer demand for rig-safe compressors manufactured by Atlas Copco, Rand-Air’s parent company.
“The demand for rig-safe compressors is in line with Atlas Copco’s vision to be an oil-competent upstream application product supplier, as well as with Rand-Air’s vision to become the market leader in compressor rental to this industry,” Blyth says.
Rand-Air GM Louwrens Erasmus tells Mining Weekly that the offshore oil and gas industry, while currently in the exploration phase, is likely to impact midstream and downstream requirements, should more substantial oil and gas deposits be found.
Rand-Air has seen an increasing demand for offshore compressors. He attributes this to the increased demand for offshore oil and gas resources, which has resulted in the need to drill to greater depths that, consequently, requires higher-capacity compressors.
“The challenge has been industry’s assumption that greater capacity means greater size,” says Erasmus, who mentions the TwinAir compressor successfully captures the required capacity, albeit in a smaller-sized model.
“The TwinAir compressor was designed and built from the ground up as a dedicated offshore unit and, although it is equally comfortable in onshore applications, it excels when it is required to perform on oil and gas rigs,” he says.
Rand-Air marketing manager Byrone Thorne points out how important space is on congested offshore rigs, which is why contractors constantly seek ways of reducing the footprint they need on the rigs.
He says the TwinAir compressor excels in this regard, as it provides the highest volume of compressed air for every square metre.
The TwinAir compressor was designed, manufactured and released in 2006, primarily for drilling, after extensive research and development had been done to find the optimum design for a customised, high-performance offshore duty compressor. The product can also be used for sandblasting operations and to operate pneumatic wrenches in offshore applications.
“Various creative design elements are combined to provide optimal safety, fuel efficiency and an extended life span in a compact package,” says Thorne, who adds that, with the TwinAir compressor, Atlas Copco combined two Caterpillar C13 engines, with a total output of 656 kW, which fit into a robust container safety convention (CSC) certified container.
He explains that having a CSC certification means that the TwinAir compressor unit can be transported easily and legally as a container cargo.
Further, the TwinAir compressor was designed with ease of handling and maintenance in mind, which makes it suitable for arduous conditions experienced on rigs.
Rand-Air is also adding the XAS1800 compressor and steam boilers to its product offering, which are all rig-safe and equipped to deal with challenges in the offshore environment.
“All construction materials and coatings have been carefully selected to provide a longer life span by improving resistance to the inclement weather experienced at offshore operations,” Thorne concludes.
Edited by: Tracy Hancock

 

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GAS DRILL RIG While domestic upstream activity is modest in Africa, there are still significant exploration projects in several African countries, such as Mozambique
 

GAS DRILL RIG While domestic upstream activity is modest in Africa, there are still significant exploration projects in several African countries, such as Mozambique
 
LOUWRENS ERASMUSThe offshore oil and gas industry, while currently in the exploration phase, is likely to impact midstream and downstream requirements, should more substantial oil and gas deposits be found
 

LOUWRENS ERASMUSThe offshore oil and gas industry, while currently in the exploration phase, is likely to impact midstream and downstream requirements, should more substantial oil and gas deposits be found
 
TWINAIR COMPRESSOR Rand-Air expects to capture a large portion of the rental market in African oil and gas exploration based on customer demand for the TwinAir compressor
 

TWINAIR COMPRESSOR Rand-Air expects to capture a large portion of the rental market in African oil and gas exploration based on customer demand for the TwinAir compressor
 
 
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