In Angola, Petromar expands and diversifies

Angola

Frederic Heintz, deputy general manager of Petromar, talks to The Energy Year about upcoming fabrication projects in the Angolan market and how the company is progressing with its diversification plans. Petromar provides maintenance services via its assets in Cabinda and Luanda and fabrication services in its yard in Ambriz.

Which is the most attractive upcoming fabrication project in the market?
Some projects that were put on standby due to Covid are now back on the table. One of the major targets for Petromar is the fabrication of a 2,000-tonne jacket and a 2,500-tonne deck for the Quiluma platform for the Eni NGC [New Gas Consortium] complex development, which aims to enhance natural gas monetisation.
During pandemic times, Eni and their partners have been able to maintain the momentum, to adjust the project and revise it. We believe they are now in the final phase of decisions on investments, backed by the rising oil and gas prices. But raw material and transportation costs have increased too, which has a great impact on operators.
Petromar kept investing during those years to maintain its Ambriz yard and associated facilities, expanding or building new assets. We completed the expansion of 7.5 hectares [75,000 square metres], and we brought in two crawler cranes in particular to demonstrate to the client that we have the in-house capacity to perform this contract. The Quiluma platform project would enable us to reach a much higher utilisation of the yard’s capacity for several months during 2023 and 2024, depending on the client’s schedule.
There are also new potential subsea developments for TotalEnergies’ new blocks, as well as for Eni’s Agogo full-field development, which would require a new FPSO with all related subsea structures. We’re receiving a lot of requests for quotations for those two main developments. Everything is still in the tender phase, but we believe we can be competitive and provide the services expected by our clients.

How is the rising cost of supplies linked to global inflation affecting the market?
The operators and contractors have had difficulties with transportation costs, which rose very fast. The price of materials such as steel structures and valves went up too, which created tension in the supply chain in terms of pricing and delivery. But usually, it’s the client that provides those incorporated goods to Petromar, so for this we are not impacted as much.
Since September 2021, the market has stabilised and become very promising once again. The appreciation of the kwanza, though, has a perverse effect on local content because our prices, which are presented and compared in dollars by clients, increased by 25% in Q1 2022, and it will probably increase further in Q2 only because of that effect. Meanwhile, local costs and labour costs keep increasing with the inflation, which is still quite high. In the next six months, we hope to have a more clear and stable outlook on the economy so that we can reduce business uncertainty.

How have activities evolved in your fabrication yard over the past year?
In our main yard in Ambriz we develop fabrication of subsea structures. During 2020 and 2021, we managed to execute the few contracts we were awarded despite Covid constraints. We are currently executing a new project with Eni Angola for the Agogo early phase 2 in Block 15/06. This includes the fabrication of quad joints pipe-in-pipes that joined together make up a 48-metre pipe. We delivered 120 quad joints for the Cabaça project in 2021 and for this new Agogo 2 project we will deliver more than 600.
Since during the pandemic we could not bring specialised competencies in from abroad to do the Cabaça project, we ended up doing most of it manually, with our Angolan welders, as the quantities and schedule permitted. For this project, as the scope is much larger with a tied schedule, we had to install double production lines, with automatic welding. Our workshop is now bigger and has more covered area for fabrication. We made additional concrete slabs as well, with internal canopies, and expanded relevant handling and storage capacities.

What is the latest on the company’s maintenance contracts?
Currently we provide maintenance services for oil and gas facilities like offshore platforms, such as in Sonangol’s Block 3, as well as FPSO maintenance. During 2021, we signed a new contract for the maintenance of two of BP’s FPSOs in blocks 18 and 31. We are also providing fabrication maintenance of structures and piping for the CABGOC blocks 0 and 14 in Cabinda, supported by our base in Malembo. These activities were revived in August 2021, and we were able to recover nearly back to normal.

What is the current demand for maintenance in mature assets?
We are bidding on a few projects, but there are no upcoming large-scale maintenance projects.
We have been doing this activity in Cabinda for years, especially in Block 0, where we are still mobilising more people and equipment. We are equipping our base in Malembo not only with specialised staff, but also with more compressors, welding machines, forklifts and other types of tools.

How has the company’s diversification plan progressed in the last year?
We launched a diversification plan in 2018, and expanded our facilities by creating a landfill over the lagoon in Ambriz. One of our ideas is to propose a communal port for containers or goods to be offloaded in our yard, stored in a temporary storage area and then transported out. We have progressed on the formal aspects of authorisations and licences for that. We can also develop crew change activity since we have floating pontoons and access to Customs and immigration with relevant scanners to do so.
In addition, we have done naval maintenance of some Sonasurf vessels with a small dry dock for repairs. We are now providing this service to Sonatide. We are working to have a potential partnership with a dry-dock-specialised company that has the competencies and methodologies to improve this service. We have some limitations with our quay of 6-metre draught, and we have the constant need to dredge the channel.

How did the company manage to restart activities after the pandemic crisis?
We are still expanding, and despite the crisis and the low activity, we have been able to maintain our investments to make sure that as soon as activity restarts at full pace, we are ready to offer the quality assets, capacities and people that we maintained.
It was especially challenging during the start of the pandemic for our maintenance contracts, where we go to client installations. Many of them demobilised completely.
In our Ambriz yard we had to perform a significant demobilisation to reduce costs, as well as define a minimum team for fabrication and an asset maintenance for the maintenance of the mobile equipment, workshop utilities, compressors and more. But since the beginning of 2021 we’ve been able to come back to normal occupation. Meanwhile we retained our key competencies in Ambriz, where currently 90% of our employees are Angolan.

How might the new local content preference and exclusivity lists affect fabrication yards?
As our ownership is not 100% Angolan, we are on the preferential list. But we have been incorporated in Angola since 1984. The type of products that are identified in the preferential list – such as subsea structures, manifolds and jumpers – will still be required from experienced and proven companies like ours. We must be quality and cost competitive regardless.
However, it might impact the services and goods that we use. Our interest has always been in dealing with the local market to avoid waiting for materials coming from abroad. What we need to avoid with this new local content decree are local dealers that import the goods themselves. So far, the list of exclusivity regimes is reasonable, with some services and goods that we can find here. The risk could be that some vendors that we are using today fail to gain ANPG [National Oil, Gas and Biofuels Agency] approval for the list.

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