* Service industry eyes Mozambique, Tanzania, Kenya gas
* Proximity to exploration can boost S. Africa service yards
* Mozambique offshore activity already raising demand
By Wendell Roelf
CAPE TOWN, July 27 South Africa's budding energy
service industry is aiming to reap the benefits of new natural
gas and oil finds along Africa's east coast, where geographical
proximity gives it the edge over other hubs in Europe, Singapore
Located at the foot of Africa along a major shipping route,
South Africa is well placed to take advantage of increased
exploration by global energy companies in East Africa, where
large gas discoveries over the past year have excited global
The U.S. Geological Survey estimates that more than 250
trillion cubic feet of natural gas may lie off Kenya, Tanzania
and Mozambique, and discoveries announced this year may hold
enough gas to supply major European economies for at least one
South Africa, the continent's largest economy, views its
ship and oil rig repair industry as a potential niche market
that could, conservatively, triple its annual revenue to 3
billion rand ($363 million) by 2015 and create 3,000 jobs.
"Our real competitive advantage lies in our proximity to the
action," said Warwick Blyth, chief executive at the South
African Oil and Gas Alliance (SAOGA), the industry body.
"If you need a piece of kit brought down, a motor rewound or
a rig sorted out without taking an extra month of towing, then
it's usually brought here," he told Reuters on Friday.
Cape Town is considered a leading logistics and service hub
for oil operators in Nigeria, Africa's top oil producer on the
continent's west coast.
Blyth said that projected repair savings for rig operators
in Africa can be massive considering the time costs associated
with towing a rig to Singapore, which could take up to 100 days
for a rig that rents out at $500,000 a day.
DCD Marine, which operates Cape Town harbour's dedicated rig
repair berth, said that its clients include all the large
drill-ship and rig operators working on Africa's east and west
coasts, such as Transocean and Halliburton.
"DCD Marine expects an uptake in business as more rigs and
ships are coming offshore Mozambique to exploit gas finds in the
area," said Gerry Klos, the company's general manager.
Cape Town and Saldanha Bay, where MAN Ferrostaal's oil and
gas shipyard was largely idle since being built in 2007, has
experienced a steady increase in business over the past 18
"Right now we are exceptionally busy. We've had three to
four projects going simultaneously; big projects in the order of
about 200 million rand each," Blyth said.
However, South Africa's government says that resolving
critical customs and excise issues related to storing and moving
oil and gas equipment in and out of Africa is vital for the
local service industry to grow.
A lack of capacity and investment at ports is another
challenge, said Blyth, adding that a proposed one billion rand
Saldanha Bay quay for deep sea oil rigs would help to maintain
the double-digit annual growth rates the industry needs.
($1 = 8.2612 South African rand)
(Editing by Pascal Fletcher and David Goodman)