CENTRE FOR POLICY AND REGULATION

SAMSA

OFFSHORE OIL AND GAS – INDUSTRY PROFILE

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OVERVIEW OF THE INDUSTRY

South Africa encompasses a coastal area of 12 nautical miles (22.2 km) and an Exclusive Economic

Zone (EEZ), which contains 350 nautical miles (648.2 km) of water surrounding the country and any

islands owned by South Africa. South Africa’s EEZ therefore totals up to 1 535 538 km2 and includes

zones next to the mainland (1 068 659 km2) and that around the Prince Edwards Island (466 879

km2). This explicitly implies that all oil, gas and other minerals that are found in proximity of the EEZ

belong to South Africa.

Table 1: Coastal and Marine Zone Statistics

SA World

Length of coastline (km) 2 798 1 634 701

Continental shelf area (km2) 160 000 24 285 000

Territorial Waters (km2) 74 000 18 816 000

Exclusive Economic Zone (km2) 1 535 538 101 900 000

Source: CIA World Factbook and Earth Trends

The area under exploration and used for production of oil and gas comprises 422 600 km2

and only

covers the area next to the mainland, leaving areas next to South African islands unexplored.

Map 1: SA oil and gas basins

Source: Petroleum Agency SA

The Orange Basin (West Coast) is volumetrically the largest of South Africa's offshore basins. It is

underexplored with one well per 4000 km2. Several petroleum systems (oil and gas) are known to be

operating in the basin, and two fields with multi-trillion cubic feet potential natural gas reserves have

been discovered to-date, i.e. the Ibhubesi and the Kudu gas fields. Petroleum Agency South Africa

(PASA) contends that the Tugela study area comprises a large under-explored area off the east coast

of South Africa which exhibits promising exploration potential, with total hydrocarbon potential

estimated in the multi-billion barrel range.

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Table 2: Upstream Exploration and Production Areas

Area km2

West Coast Basin 191 600

East Coast Basin 107 000

Outeniqua Basin 124 000

Total 422 600

Source: Petroleum Agency SA

South Africa has only small deposits of conventional oil and natural gas. According to the Department

of Energy, close to 70% of the country’s liquid fuels demand is met by imports of crude oil and

finished products, while the balance (approximately192 000 bbl/d) is satisfied by local production of

synfuels from coal and gas. This dependence on imported fuel products exposes South Africa to

various economic and political risks.

The Cape of Good Hope is a significant point for oil tanker transit around the continent. According to

Lloyd's Analysis of Petroleum Exports (APEX) database, in 2010 approximately 3.3 million barrels a

day (bbl/d) of oil transited from west to east around the Cape originating mostly from West Africa (1.8

million bbl/d) and the Western Hemisphere (1.2 million bbl/d) and destined for Asian Markets. At the

same time, 1.9 million bbl/d, originating mostly in the Middle East, transited west around the Cape to

Atlantic Basin markets.

THE STRUCTURE OF THE INDUSTRY

The structure of the oil and gas industry is divided into three main categories. The upstream,

midstream and downstream, as illustrated in diagram 1 below. The top half of the value chain

represents the gas while the lower base represents oil. The upstream segment is largely dominated

by the exploration and production phase. Midstream is where the processing takes place and semi-

processed commodities are then transported to the refineries. The latter is considered the

downstream segment which also encompasses the marketing and distribution activities.

Diagram 1: Oil and gas industry value chain

Source: PetroStrategies Inc.

UPSTREAM

Currently, there are 14 offshore operators spread over 16 concessions and seven applications for

offshore gas exploration rights. This segment of the industry is largely dominated by the Petroleum Oil

Gas

Oil

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and Gas Corporation of South Africa (Pty) Limited (PetroSA), a government-owned company. The

company operates the FA-EM, South Coast gasfields, as well as the Oribi and Oryx oilfields located in

Block 9, offshore South Africa. The producing gasfields provide feedstock to the Mossel Bay Gas-To-

Liquid (GTL) refinery. Other companies within the segment include, inter alia, multinationals such as

Forest Oil, BHP Billion and Shell International.

In the northern sector of the Orange basin, on the West Coast, oil company PetroSA has just

completed the initial stage of its exploration rights in Block 1 for which it has acquired a 1 500 km2

three-dimensional seismic survey and completed the processing and interpretation of that survey.

PASA estimates that the area has a potential gas resource at the multitrillion-cubic-foot level, with

targets at the same stratigraphic level as the Kudu gasfield to the north and the Ibhubesi gasfield to

the south. Four companies have exploration rights on the West Coast, namely oil and gas companies

Thombo Petroleum and Sungu Sungu Exploration, gas exploration company Forest Exploration

International and diversified miner BHP Billiton.

Forest Exploration and its joint venture partners have completed the acquisition of a third round of

three-dimensional seismic testing over its Ibhubesi gasfield, with the processing of a 710 km2 area in

the southwestern section of its block under way. BHP Billiton has rights in shallow- and deep-water

areas, while Sungu Sungu Exploration has rights in the midbasin. Further, rights applications for the

deep-water Orange basin and the southern Orange basin, from oil and gas companies Shell

Exploration International and PetroSA, respectively, are yet to be approved.

Table 3 illustrates the various offshore exploration and production areas that exist along the west and

south coast of South Africa. Not all operations are controlled by PetroSA; however, the latter

possesses a certain portion of the equity. The main partners that collaborate with PetroSA include

Forest Oil, Anschutz, BHP Billiton as well as Pioneer.

Table 3: Upstream Key Industry Players and PetroSA Exploration Activities, March 2011

WEST COAST

Block PetroSA equity

Partners Operator Work done

Block 1 100% PetroSA Significant technical work done

Block 2A 24% Forest (53.2%), Anschutz (22.8%)

Forest Gas development marketing period

Block 2C 24% Forest (53.2%), Anschutz (22.8%)

Forest Converting exploration right to new-order rights

Block 3A/4A 30% BHP Billiton (60%), Anschutz (10%)

BHP Billiton First exploration phase

Block 5/6 100% PetroSA Second technical cooperation permit executed to determine viability of obtaining an exploration right

SOUTH COAST

Block 9: E-C8, E-AA, E-CN, E-W, E-CC, E-AG

55% Pioneer PetroSA Initial exploration period

Block 9: F-Q, E-P, E-DC 55% Pioneer PetroSA Initial exploration period Block 9: F-E, F-O 100% PetroSA Initial exploration period Block 11a 100% PetroSA Initial exploration period

Source: PetroSA Annual Report

MIDSTREAM

The midstream segment of the industry involves the processing and the transportation of natural gas

and oil. The transportation of natural gas is done so by the use of natural gas pipelines. Much of the

processing of gas in South Africa is done by the major stakeholders who include PetroSA along with

their joint partners.

DOWNSTREAM

PetroSA, the Central Energy Fund, the National Energy Regulator of South Africa (NERSA) and

PASA, as well as the members of the South African Petroleum Industry Association (SAPIA), are the

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major role players in the country’s liquid fuels market and in particular the downstream refinery

segment of the industry. SAPIA has seven members that represent all the major oil companies doing

business in South Africa. The members are BP, Chevron, Engen, PetroSA, Shell, Sasol and Total.

PetroSA is not currently involved in downstream market activities, even though it produces petrol,

diesel, kerosene, fuel oil, liquefied petroleum gas and other products from its Mossel Bay GTL

refinery. This said, the national oil company plans to enter the local downstream market and is eyeing

several resources discarded by major oil companies. Divestments by international oil companies,

such as BP, from several African countries have further presented PetroSA with opportunities to

pursue its downstream objectives.

SUPPORTING INDUSTRIES

There are over 200 companies registered under the South African Oil and Gas Alliance that provide

supporting services to the offshore oil and industry. The main companies include, inter alia, Algoa Oil

& pipeline Services (Pty) Ltd, DCD-DORBYL Marine, Dormac Offshore, Electro Wave, Global Spec,

Hydron hydraulics, Ropetec, SGB-Cape and Toprope. Key products and services include:

Fabrication and construction

This pertains to design, fabrication or construction specialised modules or facilities for the oilfields.

These may include storage tanks, processing modules for offshore platform facilities, docking

facilities, tugs/barges, civil structures, platforms etc. There is a large fabrication yard at Saldanha Bay

dedicated to the regional upstream market. The facility has 5 000 tonnes per annum of fabrication

capacity and focuses on the fabrication and construction of jackets, process and services topside

modules, decks, booms, bridges and sub-sea infrastructure.

Repairs and maintenance

The Port of Cape Town is the main centre for the repair and upgrade of upstream offshore vessels

and equipment due to its strategic location on the southwestern corner of the African continent and

the depth of services available. The port has a large graving drydock (Sturrock drydock), a repair

quay and a dedicated berth (A-Berth) for repairs and fabrication. Though Cape Town's drydock is the

largest one in Africa, the country does not have drydock facility capable of handling drillings rigs or the

new generation drillships. Besides the Port of Cape Town, the Port of Saldanha also offers potential

opportunities to locate rig and ship repair operations in the port. Moreover, the Port of Durban has a

long established ship repair and offshore fabrication capability.

Equipment and materials suppliers

Suppliers provide a wide range of pumps, valves, pipes, motors, instrumentation, process equipment

etc. for the required need of the sector.

General and technical support services

This includes general services such as legal and finance. More technical services include a significant

cluster of companies doing inspection and maintenance, training, diving services, ROV (remotely

operated undersea vehicles) operation and repair etc.

INDUSTRY PERFORMANCE

EMPLOYMENT AND TURNOVER

The oil and gas industry is employing an estimated 7 500 people and has an estimated annual

turnover of R196 billion, with the refining segment of the industry contribution almost 99% to the total

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industry’s turnover. Moreover, the industry accounts for approximately more than 90 000 indirect jobs

in the distribution and marketing segment of the industry value chain.

Table 4: Employment in the offshore oil and gas industry

Employment Turnover

Upstream 4 800 R1.2 billion Downstream/Refining 2 700 R195.0 billion Indirect (Support, Distribution & Marketing) 90 000 n.a

TOTAL 97 500 R196.2 billion

Source: SAOGA and SAPIA Annual Report

The 2010 SAPIA Annual Report also shows that the refining segment of the industry is very important to the South African economy as it contributes:

• R5 billion in annual payroll; • R40 billion in annual excise and sales taxes; and • R190 billion in income tax

PRODUCTION AND CONSUMPTION

Oil

South Africa has no significant crude oil production but the country produced slightly over 192,000

barrels per day (bbl/d) of non-conventional, synthetic liquids processed from coal and natural gas in

2010. Oil consumption is estimated to be slightly over 550,000 bbl/d, of which, approximately 370,000

bbl/d is imported (67% of consumption). South Africa’s oil production has remained below the

consumption line for more than 2 decades and the gap continues to widen. From the graph, signs are

clearly evident that imports of crude oil by the country are set to rise in the following years and for this

reason the country will remain to be dependent on crude oil imports.

Figure 1: SA oil production and consumption (2005 – 2010)

Source: US Energy Information Administration

The National Development Plan of the National Planning Commission (NPC) sets out various options

that the South African government must take to ensure the security of fuel supply in the country. The

development plan seeks to improve fuel supply security, while making certain that the transition to a

low-carbon economy becomes a reality.

One of the biggest problems facing the country is how it will guarantee the supply of liquid fuels, an

essential component of the economy. The government’s Energy Security Master Plan for liquid fuels,

approved by Cabinet in August 2007, says the unavailability of liquid fuels will cost the economy an

estimated R925-million a day, at 2005 figures. However, it is South Africa’s potentially large

0

200

400

600

2005 2006 2007 2008 2009 2010

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0 b

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da

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Production Consumption

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unconventional gas resources onshore that could possibly hold the greatest opportunity for South

Africa to significantly diversify the country’s liquid fuel production base and reduce its dependence on

imported oil and gas.

Table 5: SA crude oil industry performance vis-à-vis Africa and World

Source: US Energy Information Administration

According to the US Energy Information Administration, South Africa had proven oil reserves of 15

million barrels in January 2010. All the proven reserves are located offshore in the Bredasdorp basin

and off the west coast of the country near the border with Namibia. South Africa imports the majority

of its crude oil from members of the Organisation of Petroleum Exporting Countries1, as depicted by

Figure 2.

Figure 2: SA oil imports by country of origin

Source: US Energy Information Administration

Gas

South Africa has very limited and declining conventional natural gas reserves but potentially large

shale gas resources. In 2010, South Africa produced 34 billion cubic feet (bcf) of natural gas and

consumed 142 bcf; the remaining 108 bcf was imported from neighbouring Mozambique. According

to the analysis by US Energy Information Administration, South Africa has 485 trillion cubic feet of

technically recoverable shale gas resources, most of which are located in the Karoo Basin. The

development of these reserves requires investments in exploration and several international

companies have obtained permits to explore the region. However, environmental concerns regarding

hydraulic fracking, the process through which shale gas is extracted, have led to a moratorium on

further permitting and existing licenses are being reviewed.

1 EIA, country analysis briefs, South Africa

Saudi Arabia29%

Iran23%

Nigeria16%

Angola15%

Russia3% Other

14%

Crude Oil (2010) SA Africa World

Production (‘000 bbl/day) 19 9 751 70 894

Consumption (‘000 bbl/day) 553 3 120 84 213

Imports (‘000 bbl/day) 436 891 42 206

Exports (‘000 bbl/day) 0 8 018 41 287

Proved Reserves (million bbl) 15 136 478 1 238 834

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Figure 3: SA natural gas production and consumption (2005 – 2010)

Source: US Energy Information Administration

Any additional natural gas reserves would likely be developed with the intent of extending the supply

to the Mossel Bay GTL plant, which already partially relies on imported natural gas. Infrastructure

constraints limit the role of natural gas in the country's electricity sector but the government’s plans to

increase imports and expand domestic production could diversify the energy mix and offset some of

the country's reliance on coal.

Table 6: SA natural gas industry performance vis-à-vis Africa and World

Natural Gas (2009) SA Africa World

(billion cubic feet)

Production 67 7 141 106 471

Consumption 191 3 616 106 764

Imports 123 185 32 497

Exports 0 3 711 31 199

Proved Reserves 362 516 084 6 549 159

Source: US Energy Information Administration

Refining

After Egypt, South Africa has the second-largest refining capacity in Africa at 703 000 bbl/d of total oil;

of this, 508 000 bbl/d is attributed to the country’s four crude oil refineries – Sapref and Enref, in

KwaZulu-Natal; Chevref, in the Western Cape; and Natref in the Free State. The balance of refining

capacity is attributable to Sasol’s synfuels facilities in Mpumalanga and the Free State, and PetroSA’s

GTL facility in the Western Cape, which use F-T technology to convert coal and natural gas into liquid

fuels with a combined capacity of 195 000 bbl/d of crude oil equivalent.

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2005 2006 2007 2008 2009 2010

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Production Consumption

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Table 7: SA refinery capacity (bbl/d) Refinery Location Ownership Capacity

Sapref Durban Shell (25%), Thebe Investments (25%), BP (50%) 180 000

Enref Durban Engen 120 000

Natref Sasolburg Sasol (63.6%), Total (36.4%) 108 000

Chevref Cape Town Chevron 100 000

Mossel Bay GTL Mossel Bay PetroSA 45 000

Sasolburg GTL Secunda/Sasolburg Sasol 150 000

Total capacity 703 000

Source: SAPIA

The National Council of Provinces’ (NCOP) Select Committee on Economic Development, noting

government’s concern about South Africa’s “considerable dependence” on international oil companies

to secure future liquid fuels energy needs, reported in 2011 that, if there was no significant new

investment in local refining capacity by 2015, South Africa would have to import about 8.5-billion litres

of fuel a year (equivalent to 150 000 bbl/d), which would pose a major threat to the country’s foreign

exchange reserves. The introduction of new fuel standards2, however, will require the country’s top

refineries to invest up to $4-billion in upgrading their plants, a call which refiners have, thus far,

resisted.

Some analysts contend that the private sector’s reluctance to invest in the refinery modifications is

what has led government to consider the construction of a $10-billion 360 000 bbl/d refinery at Coega.

The proposed refinery would take advantage of this gap in the market, processing heavy sour crude

oil and producing fuels that meet Euro 5 standards. In fact, in its report, the NCOP has urged the

National Treasury and the Cabinet to expedite planning for PetroSA’s Mthombo crude oil refinery, as

it will secure South Africa’s liquid fuels requirements. Even so, while such a refinery would allow the

country to produce high-quality fuels and become a net fuels exporter, it would challenge the

competitiveness of the older private refineries, making companies even less willing to invest, and

more willing to divest.

POLICY AND REGULATORY ENVIRONMENT

POLICY FRAMEWORK

The South African offshore oil and gas industry is governed by the White Paper on the Energy Policy

of the Republic of South Africa and the Energy Security Master Plan for Liquid Fuels. The policy

document aims to, among other objectives, improve social equity by addressing the energy

requirements of the poor; enhance the efficiency and competitiveness of the South African economy

by providing low-cost and high quality energy inputs to industrial, mining and other sectors; and

accomplish this within the constraints of environmental sustainability. The Master Plan focuses on

developing supply chain solutions to South Africa’s liquid fuels supply challenges, management of

liquid fuels demand and emergency response tactics. It thus promotes local refining and calls for a

policy of limited imports be re-endorsed, and that an independent energy planning coordinator be

considered.

REGULATORY FRAMEWORK

The following Acts govern the offshore oil and gas industry in South Africa:

• Petroleum Products Act 2003, No.120 of 1977

2 SA intends migrating directly from the current CF1 fuel specifications and standards that are consistent with Euro 2 emissions

standards, to CF2 that is comparable with Euro 5 emissions standards. The currently proposed plan involves the tightening of fuel specifications by further decreasing the levels of sulphur in petrol and diesel from 500 ppm to 10 ppm by 2017, while allowable levels of benzene will have to be reduced from 5% to 1%.

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• Petroleum Products Amendment Act, No. 2 of 2005

• Gas Act 2001, No. 48 of 2001

• Gas Regulator Levies Act, 2002, No. 75 of 2002

• Petroleum Pipelines Act, 2003, No.60 of 2003

• Petroleum Pipelines Levies Act, 2004, No. 28 of 2004

• National Energy Act, 2008, No.34 of 2008

• Central Energy Fund Act, Act No.38 of 1977

• Central Energy Fund Amendment Act, Act No.48 of 1994

• Electricity Regulation Act

• National Nuclear Regulator Act

• Nuclear Energy Act

• National Energy Regulator Act No. 40 of 2004

• National Energy Act No. 34 of 2008

• National Ports Act No. 12 of 2005

• Mineral and Petroleum Resources Development Act, No. 28 of 2002.

INSTITUTIONAL GOVERNANCE

The industry’s interests are administered by the Department of Mineral Resources and the

Department of Energy. PASA, a subsidiary of Central Energy Fund (Pty) Ltd, is responsible for

promoting, licensing, monitoring and data archiving of South Africa’s petroleum exploration and

production industry and is the designated agency in terms of the Mineral and Petroleum Resources

Development Act, No. 28 of 2002.

The National Energy Regulator of South Africa (established in 2005) is the body responsible for

regulating policy over the entire South African energy industry and is responsible for implementing

South Africa’s energy plan.

SECTOR CHALLENGES

The offshore oil and gas industry is highly fragmented and is represented by a few dominant

companies that often compete head on. There is therefore lack of cooperation beyond ad-hoc

project-based activities and little or no cooperation in market activities.

Although a wide range of infrastructure is available to service the industry, it has not been upgraded

for many years, lacks maintenance and operational efficiency. Moreover, the current facilities do not

meet the requirements of modern rigs and drilling vessels. This is related to the size and draft of

dry-dock capacity, berth drafts, size and availability of lifting capacity, the lack of Goliath cranes and

of port warehouse facilities, among others. In an African context, the South African infrastructure

might seem competitive, but the market served is international, thus requiring that facilities match

global competition in order to capture a larger market share.

Port charges and dues, docking and dry-docking fees are perceived to be excessively high and

are not in line with international levels. This creates problems for the competitiveness of the industry

as these fees are regarded as an impediment to the promotion of South Africa as the preferred

location for the region for major upgrades and refurbishments.

The South African government does not have a clear strategic policy to develop the industry. This

lack of vision and policy fragmentation across all spheres of government tends to impede the growth

of the industry. As a result the industry has been falling behind other regional players that are

strongly supported and whose needs are understood by their governments. One example is Walvis

Bay, which is in direct competition with Western Cape.

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The support industry is largely located outside the habour area across many sections of the

cities, thus providing inefficient services to the market.

Skills development and competence are lacking at both vocational and academic levels in the field

of marine and offshore engineering and the pool of workers and engineers is very limited.

SECTOR OPPORTUNITIES Beyond the country’s borders, sub-Saharan Africa represent one of the fastest growing and highest

potential oil and gas exploration and production areas in the world. Most of the new developments

are still in the relatively early stages of what promises to be a huge build-up of infrastructure and

activity. Total investments in the offshore maintenance, modification and operation segment of the

sector are projected to reach $153 billion in 2013. Salient continental developments include the

following:

WEST AFRICA

• In June 2007, the Jubilee field was discovered in the deep coastal waters of Ghana (has as

much as 1.8 billion barrels of potential reserves). Offshore oil and gas activities due to the

Jubilee field are expected to be in excess of $20 billion by 2029.

• In September 2009, Anadarko Petroleum discovered oil off the coast of Sierra Leone at the

Venus-B1 exploratory well (commercial viability still to be confirmed)

• Undiscovered potential in Senegal Province with estimated reserves totalling 2.4 billion

barrels

• Undiscovered potential in the Gulf of Guinea Province with estimated reserves totalling 4.1

billion

EAST AFRICA

• Uganda discovered commercial quantities of hydrocarbons in the Lake Albert rift basin along

its western border with the Democratic Republic of Congo (estimate reserves of up to 2.5-

billion barrels with production expected to start in 2012).

• Mozambique new gas recoveries in 2011, considered the largest discoveries anywhere in the

world, will boost the country’s reserves to more than 30 trillion cubic feet.

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Map 2: New offshore oil and gas discoveries

Source: SAOGA

East Africa offers a green-field opportunity for the country, especially in the repairs and maintenance

market, since no suitable infrastructure is in place as yet.

The exploration and development phases of the new projects will introduce a number of services and

deliveries, including inter alia:

• Supply vessel loading and unloading services;

• Materials handling and lifting equipment;

• Chandlery for the rig catering, fuel and water;

• Rig drilling machinery services;

• Suppliers such as oil, lubricants, hand tools, etc.;

• Anchor handling vessel mobilisation and demobilisation;

• Ship agency services;

• Drilling tools and fluids;

• Testing and logging equipment and services;

• Waste management;

• Supply of piping and fittings;

• Spool fabrication;

• Well-completion equipment down-hole tools;

• Sandblasting and painting;

• Pipe insulation equipment and services;

• Subsea equipment; and

• Offshore lifting operations

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INDUSTRY ASSOCIATIONS

Table 9: Offshore oil and gas industry associations

Association Objective Membership

SA Oil and Gas Alliance Support and promote the growth of South African-based industry supplying the upstream oil and gas industry

160

South African Petroleum Industry Association

Addresses a range of issues relating to the refining, distribution and marketing of petroleum products

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South African National Energy Association Hub for the exchange of energy related information

400

Liquified Petroleum Gas Safety Association of Southern Africa

Represents companies that are involved in LP Gas refining, distribution, retailing, hardware and appliances

800

SKILLS DEVELOPMENT

The offshore oil and gas industry is global rather than local and requires higher end skills. However,

standards of education to upskill labourers for the industry, is not competitive. There is currently a gap

between the quality and level of training provided by the SETA’s and FET colleges and the

requirement within the workplace for this industry. Thus, the SETA set-up is not providing what is

required for competitiveness of the industry.

Within the offshore oil and gas industry training and education structures are formalised through the

various SETA’s including TETA, CHIETA, HWSETA, INSETA, ISETT, MERSETA and MQA. NGOs

such as SAOGA are also making considerable efforts to train industry workers through various

upskilling initiatives including train the trainer, supervision and project management

Because of the global nature of the industry, many companies in South Africa currently fly employees

to the United Kingdom to be certified in Opito standards since training is not offered in South Africa

but is required for international work. Therefore, there is a need to harmonise global standards and

local requirements for South Africa to become competitive in the offshore oil and gas industry.

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INDUSTRY CAREERS

Table 10: Offshore oil and gas industry careers

Career Path Level Specialisation Qualifications NQF Level

Strategic Management Chemical Engineer Geotechnical Engineer Structural Engineer Geologist/Geophysicist Mud Logger

Senior Management Petroleum Engineer Drilling Engineer Reservoir Engineer Subsea Engineer Pipeline Engineer Roustabout

Middle Management Roughneck Derrickman/woman Driller Surveyor Toolpusher/Rig Manager Production Operator

Supervisory Diver Trainee Surveyor Assistant Driller Packer/Chainsaw Bucker Faller

Work Group Line Crew Helper Carpenters Welders Electricians Plumbers Blaster/Shooter Observer

CURRENT SKILLS INITIATIVES IN THE INDUSTRY

Oil, Gas and Chemical Manufacturing Companies Artisan Skills Training Project

This programme was originally started by the oil, gas and chemical manufacturing companies to

address the artisan skills shortage in the industry. It is learnership programme and as such takes a

learners from Level 2 to Level 4 in a particular discipline, for example Boiler-maker, Welder, Fitter,

Instrument Mechanic, Rigger, Electrician.

The project utilized 14 training providers nationwide and learners are placed at sites across the

country. These training providers are FET colleges, privately owned training centres or training

centres run by the industry’s companies.

According to SAPIA Annual Report at the end of 2010, 1 215 artisans and process operators qualified

and another 106 were completing training for qualification in mid-2011. The Report also contends that

an estimated R263-million investment has been made to date by the industry in order to increase the

availability of skilled and qualified artisans and process in the industry. Moreover, the Chemical

Industry Education and Training Authority is also understood to have invested an additional R60-

million into training artisans and process operators in the petroleum industry.

Leadership in Oil and Energy Certificate (LOE) Programme

This programme is joint initiative by SAPIA members, Wits Business School and the CHIETA. The

programme is an industry-wide intervention designed to create a pool of diverse and highly skilled

employees with petroleum industry knowledge and sound business management and leadership

skills. There is a special focus on women and historically disadvantaged South Africans to ensure

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sustained diversity in the industry. The LOE Certificate Programme is open only to employees of

SAPIA member companies.

The 2010 SAPIA Annual Report shows that the CHIETA provided a R3 334 500 discretionary grant

for tuition costs and member companies supplemented a further R936 631 investment in 2010.

CONTACTS AT SAMSA

Centre for Policy and Regulation

Office: +27 12 366 2600|Fax: +27 12 366 2601

161 Lynwood Road | Cnr Duncan Street and Lynnwood Road | Brooklyn 0181

www.samsa.org.za