Innovative services for Angola’s changing market

Angola

Erwin Krueck, managing director of All Brokerage Solutions (ABS) Angola, talks to The Energy Year about Angola’s energy value chain and how ABS has been providing and adapting its services within it. ABS provides ships agency services, brokerage, Customs clearance, warehousing, husbandry and other services.

How do you assess the resilience of the Angolan energy value chain?
Angola’s oil and gas production has been declining at a steady rate year on year. However, now we are definitely showing signs of a recovery. The country’s projected economic growth is around 4-5%. Clearly, that mainly needs to come from oil and gas. It means we need investment.
There’s a lot of stagnation in the market, but since new rigs have arrived, we are seeing far more requests for services such as work visas, border visas, meet and greet, and procurement. Oil and gas is rig-centric. Every time you bring in a rig, at least 100 or 200 people are going to be on it, and based on that number, you can multiply the number of service companies that will be needed there. Market intel is setting the projected number of rigs at 10 by mid-2022.

How can logistics and husbandry companies adapt to these changing conditions?
Bringing innovative services and predictability is central. At the moment, everyone wants to cut costs. In husbandry, we mainly focus on how to safely bring in personnel and minimise downtime.
Digitalisation is key. In our industry, most logistics are still conducted using emails and Excel spreadsheets. We have our own developers, and with the right data, they created a database and dashboard that gives us predictability. We do have a control room by which all of our cars are GPS tracked and cameras to help us measure the quality of our services.
In Angola, getting a work visa used to take six months, but the new regulation makes it possible to do it in around four weeks. We need to make this process predictable so companies can plan ahead. We are advising them on the correct way to obtain this visa.
Once out of the airport, we transport our meet-and-greet clients by road to their destinations. Maintaining an effective road fleet is also key. A car breaking down might cause the client to miss his trip to the rig. Our main focus is to expand based on client needs while simultaneously providing them with an efficient service without logistics delays.

How have husbandry services evolved compared to other business units in the company’s portfolio?
We’ve been quite stable in gaining ground in freight forwarding and shipping services. But we’ve capitalised on husbandry because companies had to bring in additional workforce to maintain current production levels. At the moment we manage four guesthouses and we are about to bring a new guesthouse into the market, which is proof that we are reinvesting the capital we gain. Crews don’t all arrive at the same time, and they need to be accommodated before going offshore while we do all their paperwork.
During the pandemic’s worst period, we had the time to understand our clients’ needs, and they’ve been very happy during the almost two years that we’ve been offering the husbandry service. Our prices are competitive compared to more expensive hotels, and we have built a relationship with the main operators and international service providers. If you’re paying USD 300-400 in a hotel but you can pay a quarter of the price for a guest house, you’re saving a lot of money for the company.
Recently, we started renting flats for our clients. They choose a flat, and we are using our Buy House services to do the contract on their behalf. In addition, we’ve started a packing service, with shipments to and from the USA. We now have all the equipment and expertise to pack and ship the valuables not only for diplomats but also for the people from oil and gas. We saw the opportunity; we have the assets; we have the warehouse, so that’s something that we’ve been doing for the past six months.

What are the advantages of the company’s inventory management services?
We’ve developed an in-house warehousing system and put it into operation in Viana. We had already implemented it at our operation in Nigeria. It brings added value to local energy companies because they can receive information regarding their inventory’s movement in real time via their browser and through either email or SMS alerts. They can check the criticality and expiration dates of the equipment online. If you have a problem on board a rig and need a specific spare part, you can check the warehouse status and the shelf life and ask us to bring the part on board the rig.
We also calculate how much space clients have to reserve for the equipment on board. Rigs can sometimes have around USD 15 million of inventory. We identify inventory needs and advise our clients on the best way to proceed.
As we also have significant experience in procurement, we offer quality control as the items reach the warehouse to help our clients. These are mostly long-lead items with three-to-four-month transit times until they arrive offshore. It is crucial that you know what you’re getting on board.

What are the main challenges for local companies in providing inventory management services?
The clients’ response has been quite hesitant, as clients don’t really trust that local companies can actually provide inventory management services. However, in ABS we have employees with more than 17 years of expertise in supply chain management, and we are hiring qualified personnel from the oil and gas sector so they can come in and share their knowledge. We’re just waiting for opportunities in this area.
While there’s a tendency for logistics people to attract other people from logistics, at ABS we’ve started integrating people from other areas, oil and gas experts especially, so they can speak the same language as our clients. That’s how we want to play differently.
If your project has been delayed and you need to store the equipment for six months in the main logistics support bases, you’d better have a good agreement, otherwise, it will start eroding your margins. We’re not only giving you the space, but we also provide services which optimise the space onboard the vessels and FPSOs, which cuts costs and reduces downtime by avoiding supply chain errors.

How will the new local content regulation affect logistics services?
Procurement and freight forwarding will be affected by the new regulations because they give preference to local companies, and all the major companies here are international companies. With the correct checks and balances to control which companies are actually Angolan, and with the correct recruitment strategy and training of Angolan nationals, it will boost companies like ours, which already provides services to rival any international logistic company.

How can companies like ABS adapt to the energy transition’s effects on oil and gas?
We are following the trends. Despite having an oil and gas focus, we are pursuing the telecoms market and renewable energy projects too. I think we’re on track because we’re doing the most important thing: actively listening to our clients and quickly adapting to their needs. There has been a disinvestment from pure oil and gas, and we’re going for alternatives.
Angola needs to embrace new strategies that will make us attractive again – and fast because we sometimes take far too long to pass a law or to revise a certain taxation methodology. And the world is moving fast. Getting funds for oil and gas projects gets harder every day.

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