Massive investment for oil industry in W Cape announced

23 March 2006

In a massive boost for the economy of the Western Cape, hundreds of millions of euros are to be pumped into the harbours of Cape Town and Saldanha Bay by one of Germany's largest multinationals as the region fulfills its dream of becoming a service and repair hub for Africa's booming oil industry.

In a move that will, directly and indirectly, create thousands of jobs in the Western Cape, the chairman of MAN Ferrostaal, Matthias Mitscherlich, today announced the establishment of the South African Offshore Oil and Gas Fabrication Yard in Saldanha and a service and refurbishment hub at the port of Cape Town.

The announcement was made at Oil Africa 2006, the second exhibition and conference for the oil, gas and petrochemical industries in sub-Saharan Africa.

"The establishment of these world-class facilities will, we believe, open a new chapter in the African landscape, whereby the excellent industrial infrastructure and technological capacity of South Africa can be channeled through, to support the growing West and Southern African offshore oil and gas fleets,'' Dr Mitscherlich said.

Construction work is to be fast-tracked and both world-class facilities are to be operational in 10 months, according to the chairman of the German multinational giant.

Even before that, businesses servicing the multinational players in the oil industry "would already be in a position to engage with the market and respond to tenders to load the sites for work early next year", Mr Mitscherlich said.

Final assembly capability will be ready by the second quarter of the next year, by which time Cape Town will be a major player in the global oil industry with "a profound effect on the continental and international status of the key harbours in Cape Town and Saldanha", according to MAN Ferrostaal.

Representatives of the Oil and Gas Division of MAN Ferrostaal, confirmed to BuaNews that investment in a fabrication yard as well as the refurbishment sites for the floating production and offshore storage vessels and oil rigs would run into ''hundreds of millions'' of euros over the long term, during which thousands of jobs were expected to be created locally.

The investment, to be made with the local partner Atlantis Marine Projects and other financial partners, "will be entirely committed to the development of world-class oil and gas related portside infrastructure in Saldanha Bay and Cape Town'', said Dr Mitscherlich.

This would be also be done with the support of the departments of trade and industry, minerals and energy, public enterprises, the National Ports Authority, the Industrial Development Corporation and the South African Oil and Gas Alliance.

MAN Ferrostaal's local technical partners in the project, includes Grinaker LTA, DCD Dorbyl Heavy Engineering, DCD Dorbyl Marine and SA Five Engineering and Globe Engineering Works.

With international demand for oil and gas growing and with the political risks of investment in the Middle East seen as more acute, Africa has emerged as a future major source for this precious commodity.

South Africa, while not being a major oil producer, is seen as being capable of contributing to the expansion of African offshore fields through the establishment of these world-class, internationally-certified facilities in Cape Town and Saldanha.

The biggest consumer of oil in the world, the United States, which consumes 25 percent of the world's oil, is increasingly looking towards Africa to feed what US President Bush has called its "addiction''.

United States Senator Rodney Ellis, in his keynote address to the Oil Africa 2006 conference earlier, said that the US had estimated that it could be importing as much as 25 percent of its oil from Africa by 2015, compared with the 16 percent at present.

Senator Ellis told BuaNews that the investment in oil-related industry announced by MAN Ferrostaal today showed how significant Africa and South Africa were becoming on the international stage, and said it was a positive indication of what was yet to come.