A strategic shipyard for AngolaJanuary 28, 2021
Mauro Carvalho, managing partner of FAMAR, talks to The Energy Year about the company’s strategic approach to bunkering and fuel management and the latest on its landmark Baía Farta shipyard project. FAMAR is a services company specialised in marine gas oil bunkering and supply.
How was FAMAR able to navigate the pandemic in 2020?
With the coronavirus, it was a challenging year for everybody. A new work-from-home environment, since March 2020, proved rather difficult at first, but since were already going digital, the transition to online communication proved to be less challenging for FAMAR.
What has been FAMAR’s key focus recently?
FAMAR’s main focus has been bunkering operations, including storage, treatment and transportation of marine fuels. However, this international pandemic has forced us to look at more innovative approaches to our business model, incorporating more services to the benefit of our clients.
Since we are currently selling oil products from Sonangol, we are also trying to manage our existing, and future clients’ oil, using our 8,500 cubic metres of storage capacity. The gas oil purchased can be stored in our onboard tankers, ensuring that it is 100% clean.
Through a filtering and chemical process, we ensure that fuel quality is not only maintained, but also improved.
Who are your current customers for this fuel management service?
BP is currently our main client in blocks 18 and 31, but we are looking forward to welcoming new clients for future expansion of our services.
What is the current state of your fleet?
We currently operate two ships, which are tankers. A bareboat charter agreement is in place for our FSIV vessel, which is a multipurpose vessel that we used to operate. This is in line with our strategic plan to focus more on our core business, which is fuel management.
How do you plan to expand the number of vessels you work with?
Through experience, we’ve learned that chartering fully operational vessels proved too costly, thus we are currently attempting to create a network with clients whom we are marketing fuel to, encouraging partnerships to form a consortium for possible future tenders, using their vessels.
The main strategy is thus to expand marketing here in Angola to ensure that clients are aware that we are a local company, owned 100% by Angolan partners. This will be very beneficial to them under the new local content framework.
Will the IMO 2020 sulphur regulation impact Angola’s potential as a regional bunkering hub?
We believe the sulphur content of the marine gas oil you can find in the Angolan market is sufficiently low. One type is the fuel oil, which already meets the 2020 standard requirements of a maximum of 0.5% sulphur content. While we already meet that standard, improving on the standard must remain the focus.
We will only become a service hub if we have sufficient fuel supply and the legislation allows us to export. We cannot be competitive just by selling internally. Looking at refineries around the world, you can no longer find marine fuel being produced with sulphur content above 0.5%. Angola can only compete internationally by having local refineries that operate and produce final products that meet international requirements.
Further, we could expand our international market if we had the necessary permits to export and import on our own, not just by relying on Sonangol. We need flexibility linked to associated national and international legislation.
What is the state of the Baía Farta shipyard project?
We have progressed significantly in the establishment of the first internationally recognised ship repair yard with associated dry dock capacity in Angola that will be servicing the marine repair needs of West Africa.
In 2018, a project information memorandum was created and officiated by Deloitte International and Royal Haskoning for the creation of a three-phase international shipyard with a total capital requirement of USD 182 million.
In 2019, various national and international roadshows were embarked on initiating solicitation of funding for this significant Angolan infrastructure.
In 2020, the appointment for the creation of a full phase one of the Bainave project’s engineering, procurement and construction (EPC) was awarded to Royal Haskoning.
Our expectation is that phase one of these three phased projects will be operational toward the end of 2021.
What is the size and capacity of the shipyard and what kind of operations will it perform?
The shipyard will provide the entire range of services related to ship repair, such as steelwork, piping, propulsion, mechanical, valves, carpentry, electrical, electronics, coatings, tanks cleaning, NDT and safety as well as a vast range of reputable international manufacturers and service providers.
It is in a unique natural deepwater port in West Africa. With depths of 30 metres and adjacent berthing, it will therefore have unlimited potential to serve the maritime industry.
The sea footprint of the yard is 80,000 square metres and a land footprint of 35,000 square metres is owned by FAMAR.
Once fully completed, the shipyard will deliver to Angola and the entire region the much needed Panamax and Suezmax capacity, thus providing international-standard services and accreditation to a vast range of sectors, such as maritime commercial trade, the oil and gas industry and the fishing industry.
The yard will be certified to perform works as per class societies’ requirements, with ISO and OHSAS certifications.
The marine facilities will include a Panamax floating dock, Suezmax floating dock and a floating pier of 300 metres and will have 1,400 metres of adjacent berths.
What is the geographical advantage of the shipyard’s location at Baía Farta in the south of Benguela province?
Looking at just the oil companies, the business comes from the north to Angola. All the ships that are going to Namibia for repairs and maintenance have to cross the latitude here. Let me give you an example. Take a ship that is already in Gabon, Chad, [Republic of] Congo or Cameroon. Just in the sailing time back and forth, you’ll save a month in opex if you stop in Angola instead of Namibia. For a single ship that costs USD 10,000 per day, for instance, you’re already saving USD 300,000 because by stopping in Angola the ship will be ready for your clients to rehire again one month earlier.
There are no international shipyards in Nigeria. There aren’t any in Gabon or in Congo yet that have the same specifications as our shipyard. And we are closer, so the advantage is clear. On top of that, the shipyards in Namibia are fully booked for the next two years.
Strategically, we are not going to compete with other countries. We are trying to set up co-operation between our yard and their yards. We will need their support a lot.
What’s the projected demand for ship maintenance in Angola?
Angola itself is exporting about USD 200 million to its neighbour Namibia for ship repairs. If you look at the total number of ships in Angola that are following the international maritime standards, where the ships have to go into approved shipyards, there are about 300 such ships so the demand is still there.
When we owned four ships, I had to create a provision just for services – between USD 1.5 million and USD 2 million per year just for ship repairs alone. There was fighting back and forth with our banks to pay this tariff abroad. So why not create a shipyard here? We will go the extra mile and focus on this big opportunity.