https://www.engineeringnews.co.za

Skills needed to benefit from growth in offshore oil and gas discoveries

26th April 2013

By: Zandile Mavuso

Creamer Media Senior Deputy Editor: Features

  

Font size: - +

The recent oil and gas deposit discoveries on the Southern African coast may be feasible investment opportunities for South Africa, as these discoveries have the potential to spur economic growth and drive manufacturing development, says global management consultancy AT Kearney principal Martin Sprott.

However, for South Africa to take advantage of this opportunity, many skilled engineers and managers along the entire value chain – from exploration to tertiary manufacturing – will be needed.

“Scattered pockets of natural gas off the coasts of South Africa and Mozambique were all that Southern African countries seemed to offer in terms of oil and gas resources. That changed in 2010 and 2011, with the highest-profile discoveries in Mozambique, where estimates of off- shore gas reserves range from 50-trillion cubic feet (tcf) to 100 tcf, in depths of 1 000 m to 3 000 m,” says Sprott.

He adds that oil deposits amounting to an estimated reserve of 11-billion barrels were found off the coast of Namibia in mid-2012. This has further spurred exploration along the West Coast of South Africa in the Orange River basin, which is an extension of the Namibian fields.

However, AT Kearney mentions that the full potential of oil and gas in the region remains uncertain, as most fields are in the early exploration phase. These are, technically, recoverable resources and not proven resources. Gas and oil sources also have relatively high extraction costs.

With the current skills shortage in the country, Sprott believes that, given the long lead time for offshore oil and gas projects, South Africa still has time to develop the required skills, which will prove the country’s competence.

He suggests that local universities work with local oil companies on the specifications needed for these offshore projects so that these companies can partner with international companies to learn the necessary project manage- ment skills, while developing skills locally. This will allow South Africa to benefit from this opportunity.

“Establishing staffing and skills devel- opment strategies that contribute to operational performance and social and industrial development is key to the success of all parties,” states Sprott.

Companies must invest in the education and development of engineering and management staff. Governments also have the opportunity to use the build-up of complex engi- neering operations to ensure skills transfer to their respective citizens, states AT Kearney.

Economic Boost
The South African government has the opportunity to use oil and gas dis- coveries on Africa’s coast to boost its economic and social development. Currently, Southern Africa’s economy is based on coal and is short of liquid fuels.

In 2011, South Africa imported 130- million barrels of crude oil. This high import volume exposes South Africa to political and supply risk. The country’s primary source of crude oil is Iran, followed by Saudi Arabia, Nigeria and Angola. In June 2012, international sanctions against Iran led to the cancellation of all imports from the country and a rapid search for alternative sources, AT Kearney reports.

“South Africa’s total refining capacity is 250-million barrels a year, or 700 000 bbl/d. Of the total daily refining capacity, 500 000 bbl is crude oil and 195 000 bbl is coal-to-liquids synthetic fuel. With about 24.5-billion litres of fuel consumed every year, there is a 7% shortfall of 1.5-billion litres of fuel a year, accounting for South Africa’s need to import refined products,” Sprott explains.

Low-cost energy and feedstock sources have the potential to give South Africa the same cost advantages in manufacturing that are enjoyed by other hydro- carbon-rich nations. In the short term, such sources could also alleviate the shortfall in electricity generation and facilitate development of renewable-energy sources.

Sprott notes that to capitalise on these opportunities, South Africa must support the development of gas as a low-cost energy source and a feedstock source for chemicals beneficiation. South African companies should work with State-owned power utility Eskom and other potential electricity providers to explore options for gas generation around the Southern African Power Pool.

He emphasises that the major opportunities the various oil and gas discoveries along the African coast could possibly bring South Africa range from reducing the cost and carbon intensity of power generation to creating a supply of chemical feedstock to drive manufacturing development.

Edited by Tracy Hancock
Creamer Media Contributing Editor

Comments

Showroom

Rio-Carb
Rio-Carb

Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...

VISIT SHOWROOM 
Multotec
Multotec

Multotec, recognised industry leaders in metallurgy and process engineering help mining houses across the world process minerals more efficiently,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.376 0.45s - 271pq - 2rq
Subscribe Now