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Increasing demand for oil-platform maintenance work

29th November 2013

By: Zandile Mavuso

Creamer Media Senior Deputy Editor: Features

  

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South Africa’s Cape Town harbour is involved in the repair of several oil platforms off the coast of West Africa and the country is set to benefit from emerging oil exploration in East Africa as the need for maintenance, repair and overhaul (MRO) services in the oil and gas industry increases, says business consulting firm Frost & Sullivan.

“MRO services are becoming increasingly important in the oil and gas industry as oil platforms have to be serviced more often as the demand for processed fuels increases. Though lighter maintenance work can be done at the harbour where the oil platform is situated, bigger maintenance work has to be done at bigger harbours, such as those in South Africa. This provides South African companies with an opportunity to provide MRO services for African countries in the oil and gas sector,” says Frost & Sullivan energy and power Africa business unit leader Cornelis van der Waal.

He adds that the increasing demand for refineries maintenance will open up the market to allow for more companies with core engineering competencies to enter the market. This environment will foster the forward integration of engineering, procurement and construction companies into the maintenance services sector.

Frost & Sullivan states that, overall, inexpensive, innovative and time-efficient maintenance methods and emerging regional refinery nerve centres will significantly boost the global prospects of the oil and gas refinery MRO services market.

Van der Waal further notes that, with East Africa’s significant prospects of oil, more African countries will start playing an important role in supplying crude products.

However, he notes that political disputes between African countries with regard to oil and gas hampers the industry’s development, as oilfields cannot be fully developed, resulting in less MRO services being required in Africa.

“While there is currently no direct impact on MRO services, owing to political disputes, it is still pertinent to stabilise the legal and political disputes in the industry,” he warns.

Meanwhile, publishing group Oxford Business Group (OBG) reports that oil and gas exploration company Tullow and Canada-based oil company Africa Oil – which are joint partners in the exploration of the East Africa Rift basin – announced in September that drilling indicated the presence of oil in the Auwerwer and Upper Lokone sandstone reservoirs in Turkana, Kenya, bringing their total discoveries in the region to an estimated 300-million barrels of oil.

Tullow and Africa Oil have exploration licences for 12 blocks and have identified ten additional leads and prospects. The two companies plan to drill 12 wells over the next year.

“The Turkana discovery has led to major international interest in Kenya’s remaining oil exploration licences, including interest from France-based integrated oil and gas corporation Total, the China National Offshore Oil Corporation and US-based oil and energy majors ExxonMobil and Chevron, though no other companies have announced commercially viable discoveries.

“Kenya has 46 blocks of exploration, of which 44 are licensed to 23 exploration companies. The Kenya government plans to create and offer seven new blocks in the near future,” says OBG.

Despite the significant discoveries, production is only projected for the long term, with the International Monetary Fund forecasting that Kenya will produce oil in six to seven years, while Tullow is more optimistic, predicting that Kenya could start exporting oil by 2016.

Meanwhile, OBG highlights that the Kenya government is proceeding with plans to construct a 32-berth port in Lamu, in the north of Kenya, and connect it to a new pipeline from Lamu to Juba, South Sudan’s capital city, which OBG hopes will be the major transport point for East African oil. The $25.5-billion Lamu Port–South Sudan–Ethiopia Transport project (Lapsset) received a monetary boost when Uganda announced its support of the project in August. Though South Sudan and Ethiopia have not officially declared their support for the project, partnering with Uganda may be enough to make the project feasible.

“Unlike the major port being constructed at Bagamoyo, in Tanzania, with Chinese backing, there are as yet no major international financial backers for Lapsset, though several South African banks have expressed interest. Also, Kenya was able to allocate $48-million from its budget this year to do preliminary studies for the project,” concludes OBG.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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