German investment kickstarts Cape oil and gas aspirations

RAY SMUTS THE QUEST by the ports of Cape Town and Saldanha to become hub service centres for the booming West Africa coast oil and gas industry received fresh impetus last week with the announcement by MAN Ferrostaal – a commercial partner in South Africa’s controversial arms deal - that R1.7 billion would be committed to various projects at the two centres. Making the announcement at the Oil Africa 2006 conference in Cape Town recently, the German industrial group said it would construct a production facility for oil drilling platforms and other equipment at Saldanha. This is certainly the largest single investment in the area since the commissioning of Saldanha Steel and will create around 1 400 jobs in an area where unemployment is rife. Repair facilities will be built at the port of Cape Town’s A-berth, for many years home to the legendary Union Castle Royal Mail line but now base for a wide variety of offshore oil and gas maintenance vessels. Cape Town port manager Sanjay Govan has previously stated that although the ship repair sector is no real money-spinner for the National Ports Authority – landlord of South Africa’s ports – it certainly is for the Western Cape’s repair industry; a total refit to one vessel, the Glas Dowr, cost upward of R250 million a few years back. MAN Ferrostaal will commit R220 million while other possible investors, including the Industrial Development Corporation and a German financier, will manage the projects along with Atlantis Marine Projects of South Africa. Both the Cape Town and Saldanha projects are to be tackled simultaneously over a period of ten months so that the facilities will be ready for use by the first half of 2007. Dr Matthias Mitscherlich, chairman of MAN Ferrostaal, says the decision to site the repair facility at the port of Cape Town was based on limited repair facilites avaiable to oil rig operators on the African continent.