I INDUSTRY
052 | 054 - Essay Navigating change and oil slicks 055 - Q&A East Coast Regional Manager, SAMSA 056 - Briefings Weigh loaded containers R300 billion and some change NPA tariff increase rejected
Edition 2012/13
Port of Durban
051
I INDUSTRY Essay, Navigating change & oil slicks
NAVIGATING CHANGE AND OIL SLICKS PREFACE Since 2011 the United States (US) and Europe have been ratcheting up pressure to tighten international sanctions against Iran. For South Africa, everything could be at stake - from oil supplies arriving through Transnet’s ports and pipelines to bread-and-butter issues and national self-
Earlier this year, South Africa’s key interna-
a challenge, says Cape Town analyst Johan
tional allies - the US and the European Union
Muller of Frost & Sullivan.
(EU) - called on the government to join their oil embargo against Iran.
‘The most obvious alternative oil sources for South Africa – Nigeria, Angola and Saudi
By not following the West, South
Arabia – have been confirmed by our De-
Africa could be excluded from the US
partment of Energy,’ notes Muller. ‘But South
financial system, resulting in being cold-
African refineries are engineered for a cer-
shouldered on exports, imports, loans and
tain oil composition.’
aid. However, if we listen to our 2nd and 3rd
Refineries
that
currently
process
largest trade partners, South Africa could
Iranian oil will therefore have to adapt in
be left short of a lot of oil: some 26% of
order to process different types of crudes.
South Africa’s monthly crude imports are
This could take months and has been
currently sourced from Iran.
estimated to cost USD44 million. This could lead to refineries temporary being unpro-
esteem.
Throttling supply
WRITER
Oil, diesel and petrol coming through South
ductive. The reality is that our broader economy
Patricia McCracken
Africa’s ports and pipelines are crucial to
needs
keep the country’s wheels moving, as well as
especially after the frequent and severe un-
ILLUSTRATIONS
vast parts of the entire continent. Throttling
planned refinery shutdowns in 2011. These
acm + Floyd Paul
this supply could possibly cause another
impacted on industries relying on refining
economic downturn, affecting incomes, jobs
by-products. Construction – a sector that
and food on the table for families across the
is already struggling - was for instance
nation and large parts of southern Africa.
affected by bitumen shortages. The shut-
The problem is that finding alternative oil
down earned public castigation from Min-
sources to replace Iranian crudes could be
ister of Energy Elizabeth Dipuo Peters and
052 Port of Durban
constantly
working
refineries,
Port City Publications
I INDUSTRY Navigating change & oil slicks, Essay
drove importation of more than 5 billion li-
provides much of sub-Saharan Africa with
its own: In 2001, our exports to the rest of
tres of diesel and petrol.
oil products, has been key to gaining initial
Africa amounted R108 billion. Of this, 75%
American and European sanctions waivers
went to Sub Saharan Africa.
Impact on Transnet’s MDS
until January 2013.
High-level
sub-Saharan
government
Temporary unproductive refineries due to
This does not mean South Africa can sit
participation at the 2012 African Renais-
adaptations could result into oil shortages
back and relax. Government has to spend
sance Conference in Durban - where South
– which could impact Transnet’s rollout of
the next months until January 2013 to seek
Africa’s national Infrastructure Plan was
its 2009-2014 National Infrastructure Plan
a solution suitable for its own needs that is
unpacked on a national, regional and con-
and its ZAR300-billion, seven-year US sanc-
acceptable to both its traditional trading
tinental scale - underlined the high value
tions’ potential (MDS). One of the objectives
partners, the EU and US, and its newer allies
South Africa places on regional integration.
of this infrastructure overhaul is to increase
- China and Russia.
Energy Minister Peters also affirmed
the throughput of petroleum products by
this stance. According to her, the impor-
almost sevenfold to more than 20 billion
Taking Africa in consideration
tance of integrating and mobilising the
litres.
With regards to the anti-sanctions BRICS
energy structures within the Southern
Also threatened could be the econo-
nations, South Africa will also have to keep
African Development Community (SADC),
my-boosting intentions of South Africa’s
a close eye on its growing leverage in Africa.
adding that only South Africa, Angola and
national Infrastructure Plan and even the
These include the close alliances between
Zambia have efficiently working refineries.
possible youth policy, which President
China and growing powerhouses such as An-
This whirlpool of allies, alliances and trade
Zuma punted in June 2012. Ultimately, such
gola, Nigeria and Ghana.
relations makes it difficult for South Africa
economic effects could trickle down to indi-
Last but not least, the rest of the
to navigate the oil slicks and sea of changes
vidual citizens, whether in price increases or
African continent – in particularly the south-
of international diplomacy, and to choose
job losses.
ern part – has to be taken into consideration
whether it wants to suffer the socioeco-
too. South Africa after all, is not an island on
nomic impact of US sanctions or to abandon
This, and the fact that South Africa
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Edition 2012/13
Port of Durban
053
I INDUSTRY Essay, Navigating change & oil slicks
The key players in a nutshell The US: Though declining, the US remains the world’s top military power. Putting an emphasis on this position, the country is calling for sanction against Iran – accusing the country of using its nuclear programme for weapons. Iran says its programme will be used for generating energy. The US is South Africa’s third trade partner and fourth biggest export market, at ZAR61 billion in 2011. It in addition, is a vital source of foreign funding for government and commercial projects, as well as aid for sectors such as health and education. The EU: Lining up alongside the US, the EU agreed to stop importing Iranian crude from July 2012. Many individual member states cut back immediately, contributing to Iranian oil exports falling 13% in 2012’s first
quarter. As part of the EU embargo, Euro-
China: As Iran’s top oil buyer, an average
pean insurers may not insure oil shipments
of 500.000 barrels a day and about 22% of
from Iran - critical as they cover about 90%
Iran’s production, China refuses to back the
of the world’s oil tankers.
US sanctions. China’s stance against sanc-
The EU is South Africa’s 2nd largest
tions increases its geopolitical influence,
trade partner and top export market,
despite confirming its strategically weak
amounting to ZAR152.5 billion in 2011.
reliance on Iranian oil imports. It has been
Iran: Iranian crude oil exports amounted
predicted the Chinese government would
to USD70.7 billion in 2010. In 2009 oil and
back its tanker insurance with sovereign
gas made up 80% of total exports and 60%
guarantees.
of total government revenues. Iran’s main
China is South Africa’s third-largest
weapon against sanctions would be block-
export market, mainly for minerals, at
ading the Straits of Hormuz, which transits
ZAR90.2 billion. Russia: South Africa’s exports to Rus-
about a fifth of the world’s oil. Some foreign investors that are deeply
sia in 2011 amounted to only ZAR2.2 billion
involved in Iran’s rich energy reserves
and in recent years, Africa has been margin-
include French Total, Dutch Shell, Italian Eni,
al to Russia’s foreign policy. Strategically,
Norwegian Statoil and South Africa’s Sasol.
though, Samir Saran of New Delhi’s Observ-
Some opportunistic clients, such as China,
er Research Foundation has suggested Rus-
are trying to renegotiate for cheaper prices.
sia could use BRICS to create an anti-West,
India is apparently stockpiling ahead of the
anti-American grouping.
sanctions.
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Port City Publications
I INDUSTRY Captain Saroor Ali, Q&A
MARITIME WATCHMAN PREFACE South African Maritime Safety Authority (SAMSA) Regional Manager, Captain Saroor Ali and his team have the daunting job of monitoring of all vessels on South African shores; and making sure salvaging laws are followed. WRITER Mike Lillyman ILLUSTRATIONS acm + Floyd Paul
One glance at the number of wrecks off
LRIT system (Long Range Identification and
the country’s long coastline indicates just
Tracking) but at any given time there may be
When a ship needs to be salvaged, who pays
how dangerous and unforgiving South
over 1500 ships in the region. The danger of
for it?
Africa’s shore is. The South African Maritime
ill-equipped or poorly maintained vessels
‘Normally ships have insurance cover. We
Safety Authority (SAMSA), by monitoring
floundering along our coast always poses
would then be in contact with the ship’s
practically every vessel movement, plays
a huge threat to the country, both environ-
agent or owner and they would make
a key role in ensuring this number does not
mentally and financially.’
arrangements to put up guarantees for the cost of the salvage. The shipping industry
grow. How does SAMSA protect both ships and
is perhaps one of the most regulated indus-
SAMSA’s regional manager for the East
coastal area?
tries, but there is always the danger of fly-
Coast of South Africa, is able to observe
‘We have a continuous monitoring process
by-night operators, or unscrupulous owners
almost every the shipping movement that
and casualty response plan in place. There is
abandoning the vessel. In such case, the
takes place in the Port of Durban. With over
a dedicated tug on stand-by as well as other
state has to become involved.
twenty years of seafaring experience as a
vessels to provide assistance in emergen-
Fortunately most pass our shores without
Master Mariner, most of the shipping lines
cies. After assessing the situation, these
incident but when things go wrong SAMSA
that frequent the port are well known to him.
may be deployed as required. Furthermore
has the task of minimizing the risks to both
we are able to predict the direction in which
life and the environment.’
From his office Captain Saroor Ali,
How does SAMSA identify and monitor
the disabled vessel would drift and what
vessels?
immediate threat it poses to the environ-
‘SAMSA monitors and identifies vessels
ment. Don’t forget we have two major roles
through the AIS (Automatic Identification
to play in such situations: one is to protect
System). All ships are required to maintain
the lives of those at sea and the other is to
this system on board. It is however the ones
combat pollution, thus preventing environ-
that switch them off that cause the prob-
mental damage to our coastline. ’
lems. We are able to track ships through the
Edition 2012/13
Port of Durban
055
I INDUSTRY Briefings
Weigh loaded containers GLOBAL
Ship and port facilities should have a veri-
tion (SOLAS) to include this stipulation.
fied actual weight of the container before
Weighing loaded containers is already
stowing it on board of a vessel, various inter-
common practice in the United States of
national shipping organisations say.
America. All of the stakeholders agreed
The International Association of Ports
that having the actual weights of containers
and Harbours, the World Shipping Coun-
improves safety aboard ships, safety in the
cil, the International Chamber of Shipping,
ports, and safety on the roads, and warned
and the Baltic and International Maritime
that relying on the recorded weight from the
Council have joined hands to encourage the
shipper could be dangerous. – (BW)
International Maritime Organization (IMO) to amend the Safety of Life at Sea Conven-
NPA tariff increase rejected SOUTH AFRICA The National Ports Authority’s application for an 18.06% increase in tariffs for services and facilities for the 2012/2013tariff year (1 April 2012 to 31 March 2013)
ZAR300 billion and some change
has been rejected by the Ports Regulator of South Africa.
SOUTH AFRICA The Port of Durban is set to benefit from
promote local suppliers, accelerate skills
Transnet’s ZAR300-billion capital expendi-
development (with ZAR7.7 billion spent on
ture plan. The seven-year strategy intends
up-skilling), target youth employment, and
to transform the company into the world’s
triple Transnet’s overall profitability.
fifth-largest rail freight company - shifting
The strategy will be funded by operat-
the lion’s share of haulage from road onto
ing cash flows and borrowings from capital
rail.
markets. The infrastructure investment will al-
Once complete, Transnet will have posi-
most double Transnet’s rail freight capacity
tioned itself as one of the global role-play-
(from 200 to 350 million tons), especially
ers in integrated rail freight and commodi-
in commodities such as iron-ore, coal and
ties transport, and will play a significant role
manganese, significantly reduce the cost
in South Africa’s economic growth. – (NM)
The regulator considered both comments from relevant stakeholders as well as the existing regulatory framework in making its decision and concluded that a 2.76% tariff increase was a reasonable and appropriate increase. – (BW) Source: The Ports Regulator of South Africa / www.portsregulator.org
of doing business in South Africa, diminish congestion and reduce carbon emissions. Studies have shown that rail is 75% more efficient than road transport. The multi-pronged strategy also aims to increase container traffic through ports (from the current 79% market share to 92%), expand commodity exports, increase petroleum inland supply, improve productivity and efficiency in rail and port operations,
056 Port of Durban
Port City Publications