Recovery of the local oil logistics industry remains slow despite a global increase in the price.
“There has been some activity, but nothing very exciting,” Kreason Pillay, managing director of M&S Logistics for Africa, India and Middle East, told FTW. “There is some talk of a recovery, but that has not really materialised. Possibly there will be some movement going forward due to the shift in the oil market and the increase in the global oil prices leading to an increase in exploratory demands and the restart of projects by the oil majors.”
Steve Shaw, the company’s director of the oil and gas division, said in 2017 the company had seen a marked increase in oil and gas volumes after the collapse of the oil price, but it had levelled out towards the end of the year.
“More recently we have seen an increased level of enquiries indicating that the market may be moving in the right direction,” he said.
M&S Logistics has formed its own global oil and gas division to work alongside a projects team headed in the UK which is represented and supported in each of its regional offices in South Africa, Rotterdam, Billingham, Houston, Shanghai, Singapore and Dubai. “We are working closely together to expand our interests in the offshore equipment market in particular,” said Shaw.
“Investments will be required in the long run and we are looking at all opportunities available to ensure we enter the market in the appropriate timeline to capitalise on the business available.”
While the company does not expect to see immediate growth, it remains positive because of the longterm growth forecast. “Exploration companies are finding new sources but they are proving extremely hard to access,” said Shaw.
“Some companies are attempting to resolve this issue by agreeing joint ventures with rival firms. Consequently they can share expertise and technology, while also reducing the financial implication of launching new projects.” This bodes well for the logistics industry but at the same time brings its own share of problems.
“The biggest challenge at the moment is presenting a costeffective logistics package that is acceptable to both parties,” said Shaw. “As the oil price has declined oil and gas companies have been under extreme pressure to reduce their costs – and logistics has been a prime target.”
Reaching new remote territories, however does not come cheap. “Some of the exploratory sites are very difficult locations and so added efforts and logistics solutions and equipment will be required,” said Pillay.
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As the oil price has declined oil and gas companies have been under extreme pressure to reduce their costs. – Steve Shaw
