South African Oil & Gas Report

special report

south african

oil & gas focus

produced by:

special report: South african focus 4 South africa at a glance

the vital statistics

Some key facts and figures about the Oil & Gas industry in South Afrcia.

6 South African Oil & Gas Alliance

6

Waiting in the wings

South Africa is ideally placed to play a key role in the next big expansion of Africa’s oil and gas production.

14 Petro SA

Inspiring national pride

By embracing change and innovation, PetroSA is opening up new horizons for South Africa’s energy sector.

26 Hesper Engineering

14

A reputation earned

How Hesper are looking to expand into the oil and gas sector.

34 Sturrock Shipping The know-how people

Nothing would ever get done in oil and gas production without the support of experienced service providers.

44 ChemSystems Daring to diversify

How he company is making a name for itself in the oil and gas sector.

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contents

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54 One Eighty Engineering Solutions Passing the test

Providing local specialised services to South Africa’s oil and gas sector.

64 Filcon Filters An ambitious target

This South Africa-based company has set an ambitious target of 25 percent annual growth over the next three years.

72 SEADOG Commercial Diving School

Educating the next generation

The provision of commercial diver training is contributing towards South Africa’s development as a hub for oil and gas activities.

72 80

80 Wings Travel Management The sky’s the limit

With the oil and gas industry stretching across the globe, companies like Wings Travel Management have never been more important to their customers.

88 AMIIS

Global ambitions

Specialists in non-destructive testing and heat treatment, the company is beginning to diversify into the oil and gas sector.

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the vital statistics Area 1,221,037 km2 Population 51,7 million (2011, src World Bank)

currency rand (zar)

1 2 3

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Capital 1. Pretoria (executive) 2. Bloemfontein (judicial) 3. Cape Town (legislative)

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petroleum exploration and production activities 1. tullow oil 2. PETROSA 3. FOREST INTERNATIONAL 4. BHP BILLITON 5. ANADARKO 6-10. petrosa 11. CANADIAN NATURAL RESOURCES 12. IMPACT AFRICA 13. eskom

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10 5

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6 7 8

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south africa at a glance Did you know...

10,000

Approximate number of people employed by the industry

1

250 million

13

Total refining capacity in barrels per year

2

12

15 million Estimated oil reserves in barrels

485 trillion ft

major oil companies operating in south africa

3

Estimated shale gas reserves

400 million

South Africa’s annual shortfall based on consumption in gallons

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Waiting in the wings The next big expansion of Africa’s oil and gas production will be on the east, and South Africa is ideally placed to play a key role in its support and development

written by: Alan Swaby research by: James Boyle

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South African Oil & Gas Alliance

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Oil rig in the ocean bay of Cape Town, South Africa

saoga

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or all South Africa’s undoubted bounties in terms of minable minerals, the same can’t be said for its oil & gas resources—at least not yet.

“Take a look at the map of exploration leases,” says Warwick Blyth, executive director of the South African Oil & Gas Alliance (SAOGA), “and you will see that there is little or nothing left to be bagged by exploration companies, which is a considerable change over a year ago. Nevertheless, while South Africa’s most significant production area in Mossel Bay is winding down, the rest of the country essentially remains in the early exploration stage. There is a lot of activity but tangible results are some years away.”

That doesn’t mean, though, that the industry is in hiatus. Oil & gas projects are going full steam ahead in neighbouring countries and SAOGA is deeply involved in ensuring that South African companies get a share of the action.

SAOGA is a non-profit organisation representing the interests of South Africabased suppliers of upstream products and services to the oil and gas industry. It currently has a membership of around 170, many of which are local operations of foreign companies. “We are realistic enough,” says Blyth, “to realise that although the country has some very capable engineering and manufacturing companies, they don’t have the experience, resources or clout to be considered as tier one suppliers. Therefore we need the involvement of overseas specialist suppliers and that’s why SAOGA is open to any business which has a base here.”

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SAOGA is working on a definitive directory of local companies suitable for potential oil & gas projects

With signed-off projects in Mozambique In this respect, SAOGA is taking a proactive and Tanzania, the race is on to get geared role by talking to its opposite numbers in up. “These projects are located in totally the UK, US and Norway, actively working undeveloped regions of Africa,” says Blyth. towards alliances of one kind or another.

“There is literally nothing there. Everything “The aim is not to provide takeover targets,” will have to be built in order to make the says Blyth, “but rather to bring together projects work—harbours, road and rail links, overseas operations which complement local offices, warehouses. We might not be eligible businesses and then it is up to the parties to supply the most critical equipment needed involved to decide how that partnership on production platforms or might be formed.”

To facilitate this meeting LPG plants but there is an enormous amount of support of minds, SAOGA is working on a definitive directory work that we can do.”

The last 12 months has also of local companies with seen a spate of acquisitions the capabilities suitable for Member companies as overseas specialists seek potential oil & gas projects. of SAOGA to gain an African foothold.

In this respect, the value

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chain is much longer than might initially be considered. “The whole process starts with the acquisition of licences, which calls for legal and business consultancy services familiar with the way different African governments and their licensing authorities work. Then there are all the services related to exploration which cover the full spectrum from seismic vessels to food provision and security. Boats and equipment need to be repaired and maintained. The list is endless and anyone serious about being in the oil & gas business should be represented in our directory.”

The most advanced of the Mozambique projects is the Anadarko LPG project which could become one of the half dozen largest fields anywhere in the world. Although construction is at least 12 months away, Blyth is conscious that there is plenty to do preparing the land and sea for the eventual extraction process and is keen that his members play a part.

The other great initiative occupying SAOGA, and which is inextricably linked to any oil & gas developments whether in South Africa or further afield, is the creation of a “free zone” based around the Western Cape port of Saldanha Bay. “It remains to be fully worked out,” says Blyth, “exactly what constitutes a free zone but at the very least there will be a customs free area where the flow of material and equipment can take place with

as little paperwork as possible and without the payment of duty or VAT. This will then become the hub for work related to oil & gas exploration and production.”

Prior to the selection and the study that has just been completed there, the debate was whether or not a hub on the east side of South Africa might have been better, bearing in mind that the focus of attention was on East Africa. However, Blyth is sure that Saldanha Bay is the best option. “It’s a natural deep water harbour,” he says,

“Anyone serious about being in the oil & gas business should be represented in our directory” 12 | Special report

saoga

Established road, rail, sea and air routes make South Africa makes an ideal logistics base

“which lends itself to a floating dry dock and has plenty of room for development.

It also has the advantage of being within easy access to Cape Town and all the city has to offer.”

And, of course, if the exploration taking place on the west coast and development of Namibia’s Kudu gas field comes to fruition, then Saldanha Bay will be ideally situated.

In summary, then, SAOGA is being both realistically practical and optimistic about South Africa’s role in the development of southern African oil & gas projects. The security and stability there must come as a welcome alternative to the chaos in Nigeria.

The established road, rail, sea and air routes that already exist in South Africa makes it the ideal logistics base.

It has experienced engineers and factories of every size and level of sophistication, offering a broad base of suppliers. At government level, there are already good relationships with neighbouring countries and although the wheels of government might be just as slow as in other African nations, within South Africa there are plenty of advisers with experience of getting things done in the most productive way.

For newcomers to South Africa, all of this information and more is available via the SAOGA directory.

For more information about South African Oil & Gas Alliance visit: www.saoga.org.za

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Inspiring national prid By embracing change and innovation, PetroSA is opening up new horizons for South Africa’s energy sector

written by: Will Daynes research by: Robert Hodgson

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petrosa

de

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petrosa

A

s the leading economic power in Africa, it’s no surprise that South Africa is a key player in the African oil industry.

Liquid fuels are an important component of its energy sector, with the 2012 BP Statistical Energy Survey revealing that, in 2011, South Africa consumed an average of 547,250 barrels of oil per day.

The history of the oil industry in South Africa can be traced back to 1884, when the first oil company was established in Cape Town with the purpose of importing refined products.

In the years since, the industry has evolved greatly to the point where today the country is responsible for processing approximately 20 million tonnes of crude oil per annum.

Formed in 2002, upon the merger of Soekor E and P Limited, Mossgas Limited and parts of the Strategic Fuel Fund, the Petroleum Oil and Gas Corporation of South Africa (PetroSA) is the national oil company. A subsidiary of the state-owned Central Energy Fund, the company holds various assets that span the petroleum value chain.

In addition to operating the FA-EM, South Coast gas fields, and the Oribi and Oryx oil fields, PetroSA is also responsible for the exploration and production of oil and natural gas from the ORCA oil rig and the production of synthetic fuels from offshore gas at what is one of the world’s largest gas-to-liquid (GTL) refineries in Mossel Bay. PetroSA’s GTL refinery produces ultraclean, low-sulphur, low-aromatic synthetic fuels and other high-value products that are converted from natural methane-rich gas.

This gas then condensates via the use of the

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PETRO SA petrosa GIJIMA Gijima is a proudly empowered South African Information Technology (IT) company listed on the JSE. It has gained recognition as the complete IT partner to a considerable client base of large technology users in both the public and private sectors. As one of the leading IT companies in southern Africa its intellectual capacity, business model and extended geographic footprint is unparalleled in the local market and provides clients with sophisticated and diverse service delivery options in the infrastructure, solutions, system integration and networking arenas.

The ethos by which it operates is to constantly seek to set the pace when it comes to industry thought leadership. Gijima’s eagerness to learn and commitment to make a difference allows its clients to unequivocally regard them as their partner of choice. Their innovative and entrepreneurial abilities enable them to consistently develop solutions to business problems – shifting boundaries that have established them as a leader in their chosen markets.

At the recent Microsoft Partner Network awards, Gijima walked away with no fewer than six top achiever awards in separate categories.

These awards are a testament to the skill and vision of their people in customising various vendor technologies to the benefit of their clients.

These awards coupled with the release of mobileIT, Gijima’s homegrown integrated all-in-one platform for the development, implementation and full life cycle management of mobile applications, mobile users and mobile devices, positions them as the preferred partner to their clients.

Gijima strives to be a magnet for talent, enthusiastic, loyal and energised staff; always developing, always growing, reaping the rewards

of the company they helped create. Gijima strives to deliver a blend of sophistication, passion and a graciousness of spirit for one another, and for PetroSA in support of their vision to become a fully integrated, commercially competitive national oil company, supplying at least 25 percent of South Africa’s liquid fuel needs by 2020 - a legacy that they can both be proud of. info@gijima.com www.gijima.com

NOVEMBER 2012 | | 192 Special report

petrosa

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OTI EasyFuel Homebase Solution The OTI EasyFuel Homebase Solution is a complete automated refuelling system that controls and manages the dispensing of fuel at homebase sites. Technology and systems that have been available to fully fledged service stations and fuelling points is now available to homebase depots - along with our commitment to ensure you derive the full benefits and savings the solution has to offer. Reduce operating costs, fraud and theft with this affordable offer from OTI Africa !

OTI Africa is pleased to announce that our complete EasyFuel Homebase Solution has been commissioned for PetroSA at their strategic refinery in Mossel Bay and OTI Africa is providing a wide range of monitoring, reporting and account management services to PetroSA. www.otiglobal.com

Charlotte Hambly-Nuss or Mark Levin can be contacted for more information on +27 21 526 9100 or info@oti-africa.co.za

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petrosa

heavily in new processes refinery’s unique GTL Fischer TrÜpsch technology. and technologies, signing PetroSA is recognised in a sponsorship agreement the industry as a pioneer when in 2010 with the University it comes to petrochemical of the Western Cape research and development.

(UWC). This agreement With the support of external led to the establishment Oil consumed by South partners from around the of the PetroSA Synthetic Africa per day in 2011 world, its specialists have Fuels Research Centre at built a reputation based on the UWC. It also resulted their innovative thinking, technical expertise in the company relocating its conversion and proven ability to execute development of olefins to distillates (COD) pilot plant projects. Upon its opening in 1992, the Mossel from Mossel Bay to the university where it Bay refinery was the first in the world to use stands today in a custom-built laboratory.

COD technology is beginning to attract GTL technology on a commercial scale and since then, only seven other GTL refineries significant attention within the industry for its have been commissioned in the world. ability to produce some of the cleanest fuels The company continues to invest available, using an environmentally friendly

547,250 barrels

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process. As the profile of this technology rises, so too does that of PetroSA by being the operator of the only COD plant in the world.

The actual COD process involves synthesising petrol and diesel by adding short-chain, unsaturated carbons in order to form longer chain hydrocarbons in the petrol and diesel boiling range. This is carried out at relatively high temperatures and pressures over a catalyst.

Today, COD is recognised as being a rapidly emerging fuel technology of the future. This comes at a time during which rising oil prices are intensifying the demand for cheaper raw materials and more efficient, cost-effective processes. At the same time, global trends show an accelerating demand for high quality diesel and diesel produced using COD technology is regarded as being of exceptional quality.

Among its many important strengths, COD produces relatively pure fuels that are low in sulphur and aromatics, while at the same time meeting the most stringent of international specifications. These fuels possess much better exhaust emission properties than conventionally produced equivalents and this makes them particularly suitable as blend materials for conventional and bioderived fuels. Furthermore, COD fuels have excellent cold flow properties, making them

highly effective when used in countries that experience cold winters.

With the future in mind, PetroSA has reached an agreement with the UWC that will allow it to achieve two key objectives.

The first is to further develop COD and its associated technologies, while the second is to help develop South Africa’s human capital.

Among the core strategic functions of the company are to make it possible for

“PetroSA’s GTL refinery produces ultra-clean, high-value products that are converted from natural methane-rich gas” 24 | Special report

petrosa

the government of South to achieve this. These include Africa to improve the supply sustaining the Mossel Bay of fuel, oil and gas to the GTL refinery as a profitable country, mitigate the impact operation and using it as of oil price variations, drive a platform to sustain the PetroSA established transformation initiatives, company. In addition, the manage the country’s company will continue to ensure all of its operations and contingency crude reserves and strategic petroleum assets, and access activities are carried out in line with the highest upstream petroleum assets. health, safety, quality and environmental In addition to these functions, the company standards as it grows its business into a also boasts a strategic objective it calls Our significant industry player that can guarantee Vision 2020. The ultimate aim of this is to the security of South Africa’s energy supply. become a fully integrated, commercially competitive national oil company, supplying For more information about at least 25 percent of South Africa’s liquid PetroSA visit: fuel needs by 2020. www.petrosa.co.za There are several ways that PetroSA plans

2002

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hesper engineering

A reputation

earned With more than 40 years of ship repair experience, this SAOGA member is looking to expand into the oil and gas sector.

General manager James Wrensch explains

written by: Will Daynes research by: James Boyle

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Hesper Engineering Rigging of repaired thruster onto barge

A

natural bay overlooked by Cape Town and stretching south to the Cape of Good Hope, Table Bay is home to the iconic Table Mountain. For centuries it has been recognised as a haven for ships and today provides the perfect location for the operations of Hesper Engineering. With more than 40 years of ship repair experience, the company is well placed to service its customers’ repair and modification needs.

“What began life as a small engineering business that served the local fishing industry has since grown into a leading regional competitor offering a variety of core functions,” explains general manager, James Wrensch. “This enables Hesper Engineering to take on and deliver turnkey projects in all aspects of the marine engineering and fabrication industry.”

Able to carry out work in Walvis Bay, Lüderitz, Saldanha Bay, Simonstown and Port Elizabeth, with mobile teams available to travel to any part of southern and West Africa to carry out specialised repairs, Hesper Engineering’s highly trained technical staff includes ex-marine and naval engineering officers and artisans. Each possessing outstanding shipping and general engineering expertise, key members of the company’s staff are also fluent in Spanish, Greek, Portuguese and German.

Hesper Engineering has the ability to approach a project from multiple angles, and as part of the Novatech Group it can call on the support of other group members to subcontract as required. “While having the ability to cover the entire scope of a

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project is an invaluable quality,” Wrensch continues, “arguably the greatest strength of the company is its hands-on approach.

From the management down, every employee of the company plays an active role in ensuring that the job at hand is done quickly and efficiently.”

Hesper Engineering has therefore earned a reputation for service in the ship repair industry. “If a customer needs something done quickly and done well,” Wrensch says, “they know there is no better company to turn to than Hesper Engineering.”

In 2009, the company took a first-ofits-kind project when it was tasked with constructing and fitting a new, 30 tonne rudder to the tanker M.T Biz to replace one lost in poor weather west of the Cape of Storms. The three-month project, carried out to the highest possible specifications, added greatly to the company’s experience.

Other large-scale projects include the lengthening and converting of the M.V North Star to a mono hull design and the building of additional fuel tanks on behalf of Carrier Marine in 2009, and a multi-faceted project involving the Transnet National Port Authority’s Enseleni Harbour Tug in 2010. This latter job involved the stripping and removal of the starboard Voith rotor

from the vessel, repairing and modifying the sealing arrangement and the standard overhaul of the complete Voith unit. The company was able to complete work on the tug in just 26 days.

More recently, the company has completed work on an accommodation barge belonging

“While having the ability to cover the entire scope of a project is an invaluable quality, the greatest strength of the company is its hands-on approach” 30 | Special report

Hesper Engineering

Rigging new rudder into position while vessel afloat

to Sea Trucks Group. Central As approved design to this contract was the and installation agents for overhaul of two 30 tonne Epocast 36 resin chocking retractable thrusters. As compound, the company is these were approximately 12 able to carry out main engine Years of ship repair metres each in length, the and machinery re-chocking experience scale of the comprehensive in-house, preventing delays ref urbish ment projec t to vessels trying to source foreign expertise. Hesper is presented an excellent opportunity for the engineers to add to also an approved Simplex Service Station their experience. for the supply, installation and bonding of Hesper Engineering is also servicing the Simplex Stern Tube Seals. offshore diamond mining sector, specifically Like some 170 other private sector DeBeers Marine in all its underwater work companies, Hesper Engineering is a when dry docking in Cape Town. member of the South Africa Oil and

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Refitting of Voith blades into new rotor

Re-chocking of the M

“If a customer needs something done quickly and done well they know there is no better company to turn to than Hesper Engineering” Gas Alliance (SAOGA). As it continues to grow, it plans to become increasingly involved with the Alliance, sharing the knowledge and experience it has gained over the years with others. “It is probably fair to say that the company has yet to take full advantage of the benefits that membership of SAOGA provides,” says

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Wrensch. “This will change as Hesper Engineering evolves further and gears itself more towards the oil and gas sector.”

Committed to investing in its people, one of the benefits of SAOGA membership the company will no doubt look to capitalise on is the number of training programmes available. These will help

Hesper Engineering

Magsenger two man main engine

develop the skills required to service the needs of oil and gas customers.

At the same time as it develops its employees’ capabilities, the company plans to expand its workshop facilities to cater for the contracts it will attract from the oil and gas sector, specifically those vessels that boast large propulsion units.

“At the heart of the company’s expansion plans,” Wrensch explains, “is the building of a 400 square metre warehouse that will house a 30 tonne crane with a 14 metre lift underneath. This major project is expected to be carried out and completed during 2013.”

As plans for this expansion steadily gain

Refitting of Voith rotor into Enseleni Habour tug

steam, the future looks bright for Hesper Engineering. “Oil and gas is definitely the sector to target, especially in growth areas like West Africa,” Wrensch concludes.

“Clearly, the way we operate has worked out well so far and from that point of view there is not much that needs improving.

The local reputation we have gained over the years is nothing short of excellent and we fully intend to maintain this as we move forward.”

For more information about Hesper Engineering visit: www.hesper.co.za

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The know

a

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Sturrock Shipping

w-how people

While the excitement of oil and gas production centres around the wells themselves, nothing would ever get done without the support of experienced service providers

written by: Alan Swaby research by: James Boyle

Special report | 35

E

lsewhere in this publication there is an account of what the South African Oil and Gas Association (SAOGA) is doing to coordinate and encourage South African based businesses to be part of the overall development of Africa’s oil and gas industries.

Here is a perfect example of what can be achieved by a business that has no interest or involvement with engineering or manufacturing and yet is still making money from oil and gas.

Sturrock Shipping has been around for almost half a century. It’s not a shipping company as the name might suggest but rather a ship’s agency plus forwarding and logistics company. It’s the type of business you go to when you want someone to take responsibility for the full supply-chain of services related to sea transportation or the import and export of goods into and out of Africa. It does have links with the actual shipping process – its BEE (black economic empowerment) partner is Calulo who is involved in ship chartering around the African coast as well as bunker brokering, but Sturrock is essentially a facilitator – it gets things done on behalf of others.

“We specialise in the oil tanker sector,” says ships agency director Clive James. “As such, there are very few of the larger names in oil that we don’t service with freight forwarding, landside logistics and a whole gamut of vessel and cargo requirements.”

For many years, during the apartheid era, Sturrock’s expansion plans were hamstrung by poor relations between South Africa and the rest of the continent. However, when

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Sturrock Shipping

Sturrock Shipping the ANC government came to power and sanctions fell away, Sturrock had the green light to start its expansion plans.

The first office was opened in Mombasa with Dar es Salaam following later, both bringing Sturrock into contact with a whole new range of clients, particularly in oil related businesses.

“We decided to start on the east coast,” says James, “as there we shared the English language – something which would make life just a little easier while adapting to a new set of conditions and business habits.”

It’s an easy trap for Europeans and Americans to fall into thinking that Africa is all the same. “The common features,” admits James, “are the high incidence of bureaucracy and the generally poor state of the infrastructure, but in each case, the fine print is different.”

It wasn’t until they had gathered considerable experience in English speaking zones that they ventured south a little and

opened two offices in Mozambique. “We’re neighbouring countries,” says James, “but the fact that business is conducted in Portuguese creates a considerable gulf.”

Now though, the network is extensive: eight offices throughout South Africa, three in Mozambique, three in Tanzania, five in Madagascar, plus offices in Angola, Kenya, Ghana and Sudan. “We try to understand local conditions and not be Eurocentric,”

“Everything about the way Africa operates is improving; the roads, phone system, broadband speeds and even bureaucracy” Special report | 39

says James. “Instead, we try to find good partners to deal with who share our ideals of good service through reliability and then tailor a modus operandi around the specific conditions in each country.”

Having someone reliable is exactly what clients want. Many of the above branches have been created at the behest of customers tired of sloppy service from agents working for their own best interests and not the

client’s. “Everything about the way Africa operates is improving,” says James, “the roads, phone system, broadband speeds and even bureaucracy. It means the barriers to entry are coming down and competition is increasing. But it’s not always improving fast enough for some of our clients based in Asia, Europe or the US. They have little tolerance for a lack of punctuality, promises that aren’t kept and poor quality work.

“The first thing that takes new clients by surprise is that we show them it is possible to have an answer within minutes”

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Sturrock Shipping

While we adhere to our own broader experience when ever improving quality combined becomes a potent standard, we strive to remain force.” ahead of the pack.”

Sturrock then works on the basis that the most The services provided by Sturrock became corrosive element for good all ship’s agents are similar, ISO certified client relationships is poor if not identical, so Sturrock communication. “The first places the emphasis not on what is done but rather how thing that takes new clients it is done. “It’s all about relationships,” says by surprise is that we show them it is James. “First we need to work closely with possible to have an answer within minutes the appropriate authorities to make sure we rather than the hours or days that might understand what they want. Here it helps previously have been their experience.” for us to partner with strong local firms Another point of difference Sturrock which have demonstrated a high level of claims in its favour is the extent of its capability. Their inside knowledge and our health, safety, environmental and quality

1996

Special report | 41

Sturrock Shipping management systems. SHEQ has traditionally not featured too prominently on the radar of many African countries, but as a result of Sturrock’s long track record dealing with the oil majors it has become a serious and necessary focus of its business today.

“All the most important oil companies,” says James, “are fully aware of their social, health and environmental responsibilities and want their agents to be equally prepared and like-minded in their approach to these non-negotiable aspects of the business.

Of course, every effort is made to avoid environmental damage but should something untoward occur, clients need to know that we are ready to deal with any situation.

Sturrock has been ISO certified since 1996 and has experienced teams that it can deploy to assist with incidents at short notice.

The amount of investment taking place in African oil and gas production is making the region an attractive target for some of the largest international agency names. But Sturrock remains confident that its focus on an African presence has numerous benefits for potential new clients. “We can demonstrate,” says James, “that the service we offer is equal to anywhere in the industrialised world but with a true understanding of what it is like to do business in Africa. And for multinational clients, we promise a consistent way of working regardless of the location.”

For more information about Sturrock Shipping visit: www.sturrockshipping.com

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Daring to diversify ChemSystems has been a fixture of the chemicals industry for over five decades. Sales director, Laurence Davies, and business development manager, Charles Du Bois, discuss how the company is now making a name for itself in the oil and gas sector

written by: Will Daynes research by: Will Kirby

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ChemSystems

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Houghton BOP

ChemSystems

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key component of the and Constructichem (a division focusing on country’s industrial base, the construction sector). What ChemSystems South Africa’s chemical also possesses is three distinct models in industry is the largest of its which it does business, these being direct kind in Africa. Globally, the trading, manufacturing under license and chemical industry boasts an estimated value manufacturing its own IPM technologies. of more than $4 trillion and while Africa’s “One of the biggest contributing factors to contribution to this has been relatively small our success over the years,” Davies continues, to date, the chemicals sector is expected to “is that we have always employed individuals play an increasingly important role in African who are experts in the chosen fields in economies in the decades ahead. One of the which we operate. This has allowed us to factors that is expected to help drive this offer our customers high value-add technical demand for chemical products and solutions support. Such capabilities are all the more important when you consider the fact that, is the growth of the oil and gas sector.

One company that has as a company, ChemSystems witnessed first-hand the doesn’t simply sell a product, dramatic industrial changes it sells solutions.” that have occurred in the Being a local manufacturer, region during its 50-plus year ChemSystems possesses a history is ChemSystems. A certain degree of flexibility that has allowed it to tailor $46 million company in its its offerings to customers own right, ChemSystems is The value of one of 13 chemical companies throughout the years as the ChemSystems belonging to the AECI Group market around it has evolved.

(African Explosives and In addition to having a strong Chemical Industries), which is listed on the presence in its home market of South Africa, the company has also gained significant access Johannesburg Stock Exchange.

“As one of the older companies within to sub-Saharan territory through various the AECI cluster,” explains sales director, technology and distribution partnerships, Laurence Davies, “we have a long history in giving it a large area of opportunity to pursue. the field of industrial products.” A diverse “While it is important to note that a large business, ChemSystems’ operations are split proportion of our market remains orientated into five, very different, divisions. These towards mining, indeed around 80 percent include Status Industrial Solutions, Capital of our African business does still stem from Polymer Additives (additives for polymer this sector,” Davies highlights, “what we industry), SA Silicones (silicone based have seen in more recent times is a spike in products for a wide range of industries), interest towards oil and gas following large Applied Solutions (the foundry industry) discoveries that have been made off the coasts

$46

Million

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$4 trillion The estimated value of the global chemicals industry

Molykote bolted connections

48 | special report

of South Africa, Angola and Mozambique.”

These events have in turn led to ChemSystems shifting its focus towards the oil and gas industry. By getting a better understanding for this market and the type of solutions it can provide potential customers, the company has been able to put together a suite of products that it is able to present to the offshore oil and gas sector.

ChemSystems holds technology and manufacturing license agreements with a number of leading chemical and lubricant producers including the likes of Castrol and Houghton International. “Houghton International,” states business development manager, Charles Du Bois, “is one of only a handful of companies that supply offshore fluids that are used in sub-sea control units, compensator units and blow-out preventers (BOP). These are products that are of the highest quality, are used by drilling companies across the globe and we are very proud to be able to offer them to our customers.”

In addition to the Houghton off-shore fluids, a comprehensive fluid test kit is available and fluid sample analysis programmes can be implemented to ensure that the fluid properties remain within specification. These analyses also allow

ChemSystems

Molykote lubricants are extremely effective

it to investigate fluid deterioration and to implement the corrective measures. Systemcleaners are available from Houghton in case of fluid contamination whereby systems need to be flushed. Houghton also offers a full range of corrosion protection products for oil field tubular.

Another series of products that are of particular importance to ChemSystems come under the name of Molykote. Created by the company Dow Corning, these products are used to lubricate threaded connections and flanges, and are commonly used to maintain rig equipment that operates in aggressive,

logistically challenging environments. “Dow Corning,” Du Bois says, “has had great success with these products in the North Sea, where the likes of Statoil and Shell have become users of Molykote. It is with this in mind that we see a great deal of potential for this brand throughout Southern Africa.”

The Molykote lubricants are extremely effective on those applications where there is very low relative motion in conjunction with very high loads, for example splines, bolts or nuts, pins and bushes, and press fit applications. The use of these products significantly improves the workshop and on

“ChemSystems possesses a degree of flexibility that has allowed it to tailor its offerings to customers throughout the years as the market has evolved” special report | 49

site safety during assembly and disassembly of equipment and components.

For almost 30 years, ChemSystems has been involved in the fire fighting industry, manufacturing fire fighting foam concentrates, and today holds a technology partnership agreement with the German company Dr Sthamer. “As you can imagine,” Davies states, “fire is an ever present risk in the oil and gas sector, and as such companies

go out of their way to protect their assets accordingly. What we do is produce a range of globally approved fire fighting concentrates.

These products are made under license in South Africa and meet all the global fire protection association standards.”

In addition to the aforementioned products and solutions, the company also represents Chemetall, selling non-destructive testing penetrates into a number of industries, oil

“ChemSystems holds technology and manufacturing license agreements with a number of leading chemical and lubricant producers”

Fire is an ever present risk in the oil and gas sector

50 | special report

ChemSystems

ChemSystems produces a range of globally approved fire fighting concentrates

and gas included. These products are used to identify defects in vessels, pipelines and other items of equipment that need to undergo regular integrity checks.

Then there are the products that ChemSystems develops itself using its own technology. These include its Marine range of solutions that include oil dispersants.

The company also produces a selection of cleaning and maintenance products and microbiological treatments, a range of corrosion inhibitors and descalers and carbon removers.

In its home market of South Africa, ChemSystems oil and gas related activities

continue to expand at an impressive rate. It is at times like this that a company such as ChemSystems, being a relatively new player in the market, benefits greatly from having other well entrenched players around it that it can draw knowledge from.

One of the reasons that ChemSystems finds itself in such a position is through its membership of the South Africa Oil and Gas Association (SAOGA). “SAOGA,� Davies enthuses, “provides us with the ability to network with others in the industry, gain a better understanding of the market and establish potential future partnerships.

It also provides us with an excellent

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opportunity to showcase our own products and services to the right people.”

The success the company continues to have in South Africa by no means suggests that it doesn’t recognise that there are a host of opportunities further afield. Indeed, two particular parts of Africa are becoming of increasing interest to ChemSystems, those being Angola and Mozambique.

“Angola,” Davies says, “is a country experiencing a great deal of activity at present. It is with this in mind that we are working hard to get a better understanding of this unique market. Charles himself recently spent some time in the country forging relationships with potential partners.

Similarly, we are looking to identify logistics partners in order to make our product offering as price competitive as possible.”

Research of this nature is also being undertaken as it relates to Mozambique, a market that is still very much in its infancy when it comes to oil and gas. “What we hope to do,” Du Bois says, “is take the lessons we have learnt, and will learn, in Angola, which is a market that is further ahead in terms of industry development, and apply them to Mozambique.”

The sheer potential for Africa’s oil and gas sector to become one of the most important

in the world should be reason enough to believe that a very promising future lies ahead for ChemSystems. However, if any further proof were needed one only needs to look at the company’s ability to diversify itself over the years.

“What we have,” Davies goes on to say, “is a level of flexibility that allows us to change our market focus and product offering fairly rapidly.

“In its home market of South Africa, ChemSystems oil and gas related activities continue to expand at an impressive rate” 52 | special report

ChemSystems

ChemSystems has been shifting its focus towards the oil and gas industry

This makes us highly versatile and able to adapt accordingly as customer needs and business trends change. In truth, as recently as ten years ago we probably wouldn’t have predicted moving into the oil and gas sector, but as that market has expanded we have been able to respond in a way that allows us to concentrate more of our efforts on such industries that we see as having a longer lifecycle.”

That is not to say that ChemSystems no longer wishes to be involved in a mixture of markets, but what it does highlight is that, as well as wanting to protect the strong position it already holds in these, the company will continue to seek out new growth opportunities as they arise.

“Today,” Davies concludes, “ChemSystems

exists as a strong player within the South African chemicals sector and we want to build on that. We see a large part of our future being driven by our ability to spread out further across Africa. This won’t be a quick or easy process, and may require us to adapt our business model slightly in some regions, but it is one that we see as being of great benefit to us as we recognise that a large portion of our future is going to be intertwined with the future growth of Africa as a whole.”

For more information about ChemSystems visit: www.chemsystems.co.za

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Pass the t

In the midst of South a centre of oil and gas of One Eighty Engine materials testing cen specialised

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One Eighty Engineering Solutions

sing test

Africa’s emergence as s activity, the opening eering Solutions’ new ntre will provide local d services

Will Daynes James Boyle

Special report | 55

T

he most developed economy in sub-Saharan Africa, South Africa’s long history of excellence in sectors such as mining, resource extraction and maritime services is well documented. The industry, however, that has been undergoing rapid development in more recent years is oil and gas, in particular the upstream market. Today the country plays host to a significant supplier base, a capacity that is complemented further by the presence of a number of the world’s leading service companies.

“It was in 2002, that I started up the company,” explains Janet Cotton, founder and director, “after recognising the industry’s need for metallurgical consultant work and materials testing capabilities.” In the years since its formation the company has gone on to develop a client base of over 300 organisations and businesses. Delivering creative, high value engineering solutions in the form of key information, One Eighty has come to be recognised as a leader in materials and metallurgical expertise.

Today, One Eighty is undergoing something of a transition. Whereas in the past it would subcontract the testing work that was required as part of a consultation, a substantial investment and support from Allseas, a Swiss offshore contractor currently executing a pipe lay project for PetroSA, has provided it with the capital needed to construct a materials testing centre that will allow it to carry this out in-house.

Expected to be up and running by the end of the year, the testing centre, with its state-of-the-art equipment will place One

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One Eighty Engineering Solutions

Founder and director, Janet Cotton

Eighty in the unique position of having capabilities that are otherwise unavailable in Cape Town. “While some companies do offer some materials testing,” research, development and design engineer, Suzanne Higgins says, “only we will have the ability to carry out a full study for a customer with all the equipment required to do so.”

It is companies within the oil and gas sector that are showing an increasing interest in One Eighty’s materials testing capabilities, particularly as it relates to weld procedure qualifications. Before commencing work on a ship or a rig an operator has to ensure that they first qualify the weld procedure. This is done through a series of impact and hardness tests carried out to the necessary standards.

“With oil and gas activity expanding across the region,” Cotton continues, “this service is becoming more in demand and we have identified it as one of our biggest growth markets going forward.”

Upon the opening of its materials testing facility, One Eighty will possess one of the very few laboratories in South Africa with the ability to offer weld procedure and performance qualification test. Any oil and gas related construction involving welds has to undergo these procedures and performance related tests before work can be commenced. The procedure tests relate to the type of welding and the performance tests refer to the welder or weld operator.

At its new premises, the company will be

With experts in material science, mechanical engineering and chemistry, One Eighty works to bring engineering an

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One Eighty Engineering Solutions

“One Eighty has come to be recognised as a leader in materials and metallurgical expertise” able to conduct tensile, bend and impact tests, before providing its customers with a detailed report. These tests will not be limited to the oil and gas sector. Customers from various other industries will be able to make use of them.

In addition to materials testing, One Eighty provides comprehensive failure investigation and material selection services.

nd science together

“What also makes us unique,” states quality assurance manager, Petra Gress, “is that, as a company, One Eighty actively works to bring engineering and science together. By having experts in fields such as material science, mechanical engineering and chemistry under one roof we are able to approach each project from multiple angles.”

A recent example of the company’s materials testing capabilities being put to use involved the hull of a vessel failing whilst at sea and the subsequent tensile and burn testing of the hull material by One Eighty to determine the quality of the lay-up of the various components of the vessel. In addition to these tests a microstructural examination was conducted and it was this that identified that the crack that led to the failure of the vessel developed in the centre part of the laminate. It was further determined that this part of the laminate was indeed more prone to fracture than the outer layers as the volume fraction of fibres in this region is lower.

There are numerous other case studies that highlight One Eighty’s expertise in the fields of failure investigation and material selection. One of its undertakings in the former saw it responding to a customer’s concerns when two electric motors used for cutting hot glass experienced catastrophic

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One Eighty identifies the cause of equipment failure

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failure. Estimated to have been in constant operation for three days prior to failure, in both cases the issue appeared to stem from a fracture adjacent to the bearing.

Evidence collected by One Eighty identified that the drive shaft failed as a result of fatigue cracking, due to rotating bending. This implies that the applied stress had exceeded the fatigue strength of the material at the site of fracture, with the loose fit between the shaft and the fan being the most likely cause for failure. Stress analysis calculations confirmed that the fan wobble was sufficient to cause fatigue fracture within the reported operating hours.

From a materials selection point of view, the analysis the company carried out on a hinge pin on a diving bell door also stands out. In this case the customer in question reported the pin showing severe galling over time, resulting in difficulty opening and closing the door. What One Eighty was able to recommend was that to reduce this galling, the surface finish, lubricant selection and material selection must be optimised. It also highlighted that using a lubricant containing a solid element would produce the best results, creating a barrier between surfaces and preventing the effects of cold welding.

It was through the company’s membership status within The South African Oil and Gas Alliance (SAOGA) that it was able to ascertain whether there was in fact a need for a materials testing facility in the Western Cape of the country. “The feedback we received from fellow members,” Cotton says, “was overwhelmingly positive, with the consensus being that, in order for the

One Eighty Engineering Solutions

Metallurgical services remain highly specialised and are not widely available in South Africa

region to provide world-class services to large oil and gas players, a local test centre is essential.”

Despite being a fundamental aspect of manufacturing, metallurgical services remain highly specialised and as such are not widely available in South Africa. What One Eighty is able to do as a member of SAOGA is use its expertise and knowledge to

educate people as to the importance of these services. The SAOGA can in turn distribute this to its members.

“As oil and gas activities increase in South Africa,” Cotton says, “it becomes all the more important to have the right degree of materials testing knowledge and experience available locally to service this growth.” Without access to local facilities,

“We know there is lots of work out there and this gives us all a great deal of excitement for what the future holds” Special report | 61

The materials testing facility will create many new opportunities

One Eighty Engineering Solutions companies would otherwise be forced to continue sending work back to Europe. One Eighty’s facility will not only help eliminate the logistical and economic burden that comes from this, it will also provide the opportunity for customers to get a better understanding of the process and its results through closer, more direct interaction.

Over the course of the next two years, the company is committed to its aim of taking its materials testing facility from zero percent capacity to at least 75 percent capacity and beyond. “With the opening of the new centre,” Higgins enthuses, “comes a great number of new opportunities. We know there is lots of work out there and this gives us all a great deal of excitement for what the future holds.”

In the meantime, not only does One Eighty intend to expand its consultancy business internationally, its founder and director has her own personal goal that she wants to see come to fruition and that is for the company to branch out into product development. “This is something I am hoping to see became a much stronger theme for the business over the next five years,” Cotton concludes. “Whether it involves developing our own range of products or specific, bespoke items for a customer, I envision One Eighty’s business being balanced between consulting, materials testing and product development.”

For more information about One Eighty Engineering Solutions visit: www.one-eighty-degrees.com

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An ambitious target South Africa-based Filcon Filters has set an ambitious target of 25 percent annual growth over the next three years. Directors Vernon Clarke, Tony Henfrey and George Canning talk about running a knowledge-based business

written by: Gay Sutton research by: Marcus Lewis

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Filcon Filters

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Trevor giving a piece of pipe the evil eye

Filcon Filters

M

anufacturing, water and waste water, oil and gas, food and beverage, petrochemical, paint—no matter what business you are in, continuity is essential. Downtime and quality issues cost money. So it’s small wonder that many companies prefer to stick with the brands and suppliers they know and trust. One company supplying top quality proprietary products, but also encouraging customers to break the cycle of inhibition when a custom-built product would be more effective, is Filcon Filters.

Launched in 2000 by owners Tony Henfrey and Vernon Clarke, Filcon initially began trading as an importer and supplier of proprietary filtration products with a distribution licence for Hayward Filtration, now part of Eaton Filtration. From its base in Cape Town, the company quickly expanded and diversified, and today stocks a wide variety of products that include self-cleaning, back washing and centrifugal filters, market, basket and flushing strainers, filter cartridges and bags as well as filter media in the form of materials such as activated carbon. “We are still diversifying,” said sales director Vernon Clarke. “We’re always looking for new types of equipment and technology, and if a new product fits with us we will investigate it.”

Vernon drives sales and Tony positions the Filcon brand through press releases and search engine optimisation.

Filcon’s aim is to become South Africa’s leading filtration specialist. Over the past 13 years considerable progress has been made towards that goal. “Today, we provide not

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25% Annual growth target from 2012 to 2015

PS250 Auto with brush

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just products,” explained financial director Tony Henfrey, “but we also answer any questions our customers have on filtration, and we will even design filtration systems to solve specific application problems.”

Through a combination of in-house technical expertise, reliability and integrity, the company has built a solid reputation for excellence. “Service levels are particularly important to us,” Clarke continued. “If we are able to service the customer to the level that meets with their satisfaction, price is not always the key. People will purchase from us because we have the stock levels, and we deliver on time.”

As part of its strategy for growth, the company opened a second office in Johannesburg two years ago, close to South Africa’s industrial heartland. One of the key roles of the new technical centre is to diversify into a new gap in the market. “With the rand weakening against most currencies and imports therefore becoming far more expensive,” Henfrey said, “we realised that manufacturing our own range of products would give us an edge.”

The manufacturing arm of Filcon is managed and run by design engineering director George Canning who brings some 30 years’ experience to the business.

Filcon Filters

200GTSSHP in duplex format

The economics of manufacturing custom products in South Africa are, he believes, very persuasive. “Because of the size of the market here and the sheer range of filters that are available on the global market, it’s impractical to hold stocks of them all.

So if a customer requires a filter that is in any way non-standard, the freight costs of importing a one-off product are simply prohibitive,” he said.

“In the past, plant engineers have had to modify their plant in order to accommodate a filter from the standard range. The service we’re offering means they don’t have to do

that. We will design non-standard filters from scratch to their specification. We then outsource the manufacture to one of three trusted fabricators here in Johannesburg.”

With Filcon’s reputation for technical excellence, the service has proved very popular. It saves on freight costs, reduces the downtime, cost and risk associated with adapting production equipment. All Filcon filters are manufactured to ISO 9001:2008 quality standards, and the company retains control of the entire process by providing not only the detailed technical designs but also the raw materials and components.

“We’re always looking for new types of equipment and technology, and if a new product fits with us we will investigate it” Special report | 69

Since launching the new service, Canning has continuously been refining the design and manufacturing process to increase efficiency and reduce lead time, therefore making custom manufacture even more attractive. For example, where there are components and materials common to several products, the company always holds significant quantities in stock.

Custom manufacturing has been very successful, and the unit has made a name for itself with some of its products. Among the more significant is the Dirt Gobbla, a centrifugal filter that is currently unique in South Africa. “We’re also known for our centrifugal strainer, our automatic purging strainer and back washing strainer,” Canning said. “And we’ve developed a popular line of locally manufactured in-line basket strainers.”

As Filcon is a knowledge-based enterprise, ensuring business continuity has become a high priority. “This is something we’re very conscious of, and have been planning for,” Clarke said. There are currently two young graduates employed under Canning at the Johannesburg office, and one under Clarke at Cape Town. All three are undergoing a mixture of formal training and continuous in-house coaching where they are learning

skills and gaining experience of the industry, absorbing knowledge almost through a process of osmosis.

“One is a young African lady who has a BSc in geology with a chemistry background which should be an aid in water treatment. It’s her first job out of graduation,” Henfrey explained. “She is showing tremendous potential and is probably one of the first black women to

“At this stage, we see mining as a real growth area, and we’re also looking at the oil and gas industry, particularly in Namibia, Mozambique and Tanzania” 70 | Special report

Filcon Filters

300GTSSLP Strainers

700mm Strainer 3

venture into the filtration industry, so we’re nurturing her.” Alongside this, the company has been working to improve its BEE (broadbased black economic empowerment) score, and has recently raised this to level 2, an achievement that delivers added benefits for the customer.

With these achievements under its belt, Filcon has set a challenging target for growth. “We have set ourselves a target of increasing sales by 25 percent per annum from 2012 through to 2015, and we are on target to achieve that this year,” Henfrey continued. “Our next priority is to open an office in Durban as we believe there is a big market in South Africa that we have not yet tapped. But we are also looking into Africa as a whole.” The company has already begun to

make inroads into the wider African market through third party suppliers.

“At this stage, we see mining as a real growth area, and we’re also looking at the oil and gas industry, particularly in Namibia, Mozambique and Tanzania.

And of course with South Africa being the 20th most water deprived country in the world there is tremendous potential for recycling and reusing water.” With so many new opportunities in a rapidly expanding industry base, the target seems well within range.

For more information about Filcon Filters visit: www.filconfilters.co.za

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SEADOG Commercial Diving School

Educating the next generation Managing director Bridget Thomson talks about how the provision of commercial diver training is contributing towards South Africa’s development as a hub for oil and gas activities

written by: Will Daynes research by: Marcus Lewis

Special report | 73

SEADOG Commercial Diving School

E

ver since the first commercial offshore saturation dive was performed in the Gulf of Mexico, back in March 1966, the work of offshore divers has proven invaluable to the exploration and production sectors of the oil and gas industry. For nearly 60 years these divers have been responsible for carrying out the maintenance and inspection of offshore oil platforms, as well as the building of underwater structures used in the production process. Without the efforts of these highly skilled individuals the oil and gas sector may very well have struggled to reach such prominence during the latter half of the 20th century.

Established in January 2010 by managing director Bridget Thomson, SEADOG Commercial Diving School is a training centre for the oil and gas industry, specialising in such fields as commercial diving, supervision and diver medic training. Situated within Saldanha Bay, SEADOG’s unique location allows trainees to develop under realistic conditions where the quiet waters of the bay provide the perfect introduction to learner divers before they enter the open ocean.

Committed to providing quality, progressive education, using outcomebased skills training, SEADOG promotes student-centred learning. This structure ensures that those individuals trained by the school demonstrate competency through a combination of knowledge, understanding and skills that encourage good performance and safe working practices.

“Personally,” Thomson explains, “I

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have been involved in the medical and occupational health and safety sector of commercial diving since 2000. As a result of my own experiences I have been aware for quite some time that there is a strong level of demand for the services that SEADOG offers, particularly in light of South Africa’s growing importance within the oil and gas industry.”

The role South Africa plays in today’s market is further highlighted by its being one of a handful of countries where its accredited diving schools award qualifications that are recognised by the International Marine Contractors Association (IMCA). “What we quite often find with the clients we work with,” Thomson continues, “is that they will often select a team of people that they wish to train as commercial divers before then sending that group or team to us to receive the proper education.”

While SEADOG Commercial Diving School is a relatively young business in its own right, the experience of its managing director and the trust she has gained throughout the industry have proven to be the catalysts behind what has become a successful, respected operation. “A number of the people that I have trained over the years are today working in key positions in many of the big oil and gas players in the

region,” Thomson says. “What I believe to be the key to SEADOG’s success is a combination of the trust these former trainees turned supervisors, superintendents and managers have in us, our ability to maintain longterm relationships and the way in which we are able to adapt as a business to meet

“Situated within Saldanha Bay, SEADOG’s unique location allows trainees to develop under realistic conditions” 76 | Special report

SEADOG Commercial Diving School

SEADOG awards qualifications that are recognised by the International Marine Contractors Association (IMCA)

changing industry needs.”

“It is my belief,” Education, training Thomson states, “that and development are South African oil and developing themes across gas companies need to come together and make Southern Africa, with all Year of the first offshore a stand as a way of of its major industries saturation dive showcasing the products, being encouraged to training and services they embrace change and new have to offer. I think a lot ideas, rather than just maintaining traditional standards and of countries maybe see this part of the practices. One organisation providing a world as being a lot less advanced than it platform that will allow its members to move really is and bodies like the SAOGA can forward together is the South African Oil help change that perception. The SAOGA and Gas Alliance (SAOGA). certainly has the potential to achieve a

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“It is clear to anyone who visits SEADOG that it has developed a rock-solid programme” lot more in the years ahead and that will ultimately benefit everyone.”

The progress made by SEADOG over the last two and a half years has certainly been impressive. In that time it has hosted representatives from the IMCA and from international businesses such as those based in Australia, each of whom have been highly complimentary of the school’s training and assessment methods and its quality assurance.

78 | Special report

“It is clear to anyone who visits us that we have developed a rock-solid programme here,” Thomson enthuses.

“What we are doing now to further grow the business is to establish several cooperative agreements with other diving schools and professional bodies.”

It is this approach that SEADOG hopes to extend internationally through the establishment of cross-border cooperatives.

“Where we are in Saldanha Bay,” Thomson

SEADOG Commercial Diving School

SEADOG’s trainers have knowledge and experience in the technical, medical and supervisory fields

says, “you can see from the rigs that arrive on a regular basis and the on-going developments within the harbour areas that there is a good future ahead for the industry in this region. However, this potential is not just limited to South Africa. We are seeing it occurring in the Middle East and across Asia in countries that South Africa has strong ties and relations with.”

Boasting a complement of trainers whose knowledge and experience encompass the technical, medical and supervisory fields, the medium-to-long term goal of SEADOG Commercial Diving School is to leverage this into being able to offer more specialist training courses. This would target other growth areas within the field

such as the work of dive technicians and medical technicians.

Nevertheless, Thomson appears acutely aware that the success of the school is, at least in part, tied to the growth of the region as a hub of oil and gas activity. “South Africa truly does have the means and abilities to offer a quality service to the oil and gas industry. As we ourselves evolve and grow as a business, it is that message that we will look to convey on an international scale.”

For more information about SEADOG Commercial Diving School visit: www.divingschool.co.za

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Thesky’s thelimit Chief executive officer Tony Sofianos explains how, with the oil and gas industry stretching across the globe more than ever before, companies like Wings Travel Management have never been more important to their customers

written by: Will Daynes research by: Marcus Lewis 80 | Special report

Wings Travel Management

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Wings has expanded around the world

Wings Travel Management

O

ver the past two decades, the oil and gas industry has taken off at an incredible rate in many developing markets, helping establish nations such as Brazil, China and South Africa as modern centres of economic prosperity. The evolution has also allowed those companies that are best positioned to service these markets to grow and, more importantly, overcome many of the challenges posed in recent years by the financial crisis.

Described as a “high tech, high touch” organisation, Wings Travel Management is a global travel management company (TMC) specialising in offshore, marine and corporate travel. Founded in 1992, and employing approximately 300 people in four regional hubs, Wings possesses an advanced and unique quality management system that is an integral part of its operating procedures.

Having celebrated its 20th anniversary in 2012, the company has witnessed first-hand how the market has adapted and changed in that time. “There is no doubt,” explains chief executive officer Tony Sofianos, “that the last few years have been incredibly tough. Notwithstanding the economic environment, we have managed to position ourselves optimally so we can maximise the opportunities that exist as well as be better positioned to expand as economic conditions improve. In fact through the acquisition of a number of businesses around the globe in recent years and strong sustainable organic growth, we have been able to achieve strong double digit growth numbers throughout this recession.”

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Another way in which the company has weathered the economic storm is by actively taking an aggressive approach toward managing its costs, while retaining its commitment to investing in new technologies and its resources. “Being able to manage our costs effectively has been of huge benefit to the business,” Sofianos continues, “but so too has our ability to identify new revenue streams and increase our overall productivity.”

Said revenue streams are increasingly coming from those aforementioned developing economies. “Two of the fastestgrowing markets in the oil and gas sector are Brazil and the continent of Africa, and having a strong presence in both has undoubtedly strengthened Wings as leaders in the energy sector,” Sofianos states. “This is particularly true when it comes to Brazil, which has come along by leaps and bounds over the past several years. The oil and gas industry in that part of the world is positively booming today, and we are extremely excited to be right at the heart of that.”

In pursuit of further growth opportunities, Wings continues to scout for potential acquisitions and engage with different players in different parts of the world.

Notwithstanding the fact that Wings corporate headquarters migrated to the UK a number of

years back, Wings is still committed to, and recognises the importance of continuing to invest in, South Africa and Africa as a whole, where it was originally founded 20 years ago.

This recognition is exemplified by the fact that Wings can today be found in

“Wings possesses an advanced and unique quality management system that is an integral part of its operating procedures” 84 | Special report

Wings Travel Management

Wings is a “high tech, high touch” organisation

esteemed company within of course, it also provides the membership ranks of the e xcel lent net work i ng South African Oil and Gas opportunities with other players in the sector.”

Association (SAOGA). “We are very unique, in that while Toward the end of The year the company SAOGA is primarily made up 2011, Deloitte carried out was founded of industry operators and a comprehensive business service providers, it is rare travel survey to calculate to find a third-party service what the percentage of provider like us within such an association,” business travellers would be in 2012. The Sofianos says. “Being a member of SAOGA results were eye opening, with 85 percent gives us a level of credibility in this region of those who travelled in 2011 saying they that is not easy to obtain, due to the selective expected to embark on as many journeys in nature of its membership structure, and, 2012, and 27 percent of 18 to 44-year-olds

1992

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surveyed intending to travel more. What these figures highlighted was an ever-increasing need for business travel companies, and this remains the case to this day.

“I think that while the global financial climate will remain challenging in the shortto-medium term, thus meaning companies will continue to drive down costs and margins, there are still going to be plenty of opportunities for companies like ours,

specifically in the energy sector. This will particularly be the case as the Asia-Pacific region comes online for Wings in the near future,” Sofianos says.

In terms of Wings’ brand and value proposition, its business is to provide services to companies where business travel is a crucial part of their business model, like the oil and gas industry, which accounts for over 50 percent of Wings’ volumes. “As is most often the case

“Two of the fastest-growing markets in the oil & gas sector are Brazil and Africa. having a strong presence in both has undoubtedly strengthened Wings”

Business travel is a crucial part of the business model in the energy industry

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Wings Travel Management

Travellers expect a consistent, predictable service delivery

in the oil and gas industry,” Sofianos enthuses, “very little of what takes place today such as operations in the field, can be replicated by video conference and other technology.

While some small elements of technology are beginning to creep into the industry, the movement of people on and off oil rigs, or between key assets, is not something that is going to change anytime soon, and that is what makes a company like Wings such an important part of our customers’ business.”

While turbulent financial conditions continue to exist, Sofianos is very clear about what Wings needs to do in order to stay the course it is on. “What is important is being able to maintain a stable growth curve, by firstly retaining our customers and

also acquiring new strategic ones, and never taking your eye off what is important to our travellers—consistent predictable service delivery, irrespective of the environment.

It is also vital that we continue to be leaders and experts when it comes to entering and prospering in emerging and tough markets such as Brazil, the Middle East, East and West Africa. It is in these locations that the industry will grow at its most significant rates and we will remain well positioned to capitalise on this.”

For more information about Wings Travel Management visit: www.wings.travel

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globalam

Specialists in non-destructive the company is beginning to sector and looking for gro

written by: research by

88 | special report

amiis

mbitions

e testing and heat treatment, diversify into the oil and gas owth outside South Africa

: Alan Swaby y: Will Kirby

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W

hat would you do if you won the lottery?

In the case of Nelson Mahadeo, he went into business for himself. A win of a couple of million rand in 2003 enabled him to say au revoir to his employers and set up Associated Marine & Industrial Inspection Services. By hiring a good team, he was able to get the business up and running in a short time.

AMIIS provides non-destructive testing (NDT) and heat treatment services – the two going hand in hand where any critical welding is being carried out. As the name implies, the original intention was to concentrate on the marine industry, in the company’s home city of Durban. The business has its main office in the harbour and a dry dock operates from there for ship repairs. Since then, though, the company has widened its scope of interests and diversified into the other main business activities in Kwazulu Natal – namely paper & pulp and petrochemical refining. It’s now a member of SAOGA and is gearing up for a greater involvement in the soon to be developed Mozambique and West African oil & gas fields.

“The marine industry is still important for us,” says Raj Kistiah, national manager of the non-destructive testing wing of the business, “but the reality is that very few new boats are ever built in South Africa, which means that the marine business is all about repair work. To get a more stable business base, AMIIS decided to develop interests in other areas of industry.”

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On the face of it, heat treatment and NDT seem poles apart but traditionally they are often found together. They are both concerned with ensuring the integrity of joints and materials and the notion of AMIIS being a one stop shop is at the heart of its marketing approach.

The company is a specialist in all conventional and high tech forms of NDT such as radiography, magnetic particle

inspection, penetrant testing, gamma rays and ultrasound, from which it selects the right procedure to satisfy the codes prescribed by clients. “On the heat treatment side,” says Kistiah, “we feel there is no single company that can outperform us in terms of speed and capacity. With all providers of these services essentially singing to the same hymn sheet, the points of difference centre not around the work itself but on how

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quickly and reliably they can contractor selection, and for be performed.”

AMIIS there is no such thing AMIIS, as with other as a job too large. With its heat treatment companies, comprehensive resources it employs two distinctly can respond to a job within AMIIS business founded different approaches – using a couple of days where some electrical induction or gas of its competitors might take as the heat source. The gas a couple of weeks to draw division provides high velocity gas units for together the equipment they need. drying and curing refractories, and postThe two sides of the business are weld heat treatment of large fabrications distinctly different in their demands, by direct firing, with satisfied clients however. The heat treatment is capital including Sasol, Alstom, Chevron, Engen, intensive but has less need for highly skilled Shell and BP, Eskom Power Stations, Exxaro operatives. NDT, on the other hand, needs Resources and Elgin Engineering. less in the way of capital but requires huge What makes the difference is the number investments in labour. of heating modules at the company’s Apart from the usual cry amongst South disposal. Speed and price are at the heart of African businesses that the demand for

2003

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“The company has diversified into paper & pulp and petro-chemical refining” skilled labour outstrips supply, the biggest problem that AMIIS faces is the extent of competition in the NDT arena, however, where the market in South Africa is saturated. “So we are taking steps to get more business from our neighbouring countries where there are fewer indigenous contractors,” explains Kistiah.

As well as its marine activities in Kwazulu Natal at Durban and nearby Richards Bay, AMIIS already has a chain of offices around South Africa linked to key clients in the petrochemical industry at Sasolburg and power generation plants located in South Africa’s coal belt to the east of Johannesburg.

Serving existing clients in Mozambique but in particular helping to develop the oil and gas business there, AMIIS has an office in Maputo. In addition, AMIIS is easing itself into the West African oil & gas fields where the demand is high for inspection and testing services that are currently being met by US and British contractors.

For more information about AMIIS contact: amiis@amiis.co.za

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