Local solutions for the global sustainability shiftJanuary 5, 2021
Matuzalem Sukete, CEO of Angola Environmental Serviços (AES), talks to The Energy Year about how Angola’s energy industry is emerging from the Covid-19 impact and prospects for continued activities in sustainability. With facilities at the Sonils base in Luanda and Kwanda base in Soyo, AES provides environmental and integrated waste management services to the oil and gas industry.
How has Angola’s energy industry managed to navigate the effects of the coronavirus pandemic?
Covid-19 has, without a doubt, created a new reality that has forced us all to undergo various tests on how to survive this period. Oil and gas, like any other industry, has been put under tremendous pressure. The industry activities throughout the world have almost come to a complete standstill. In Angola, production continues but without exploration and drilling we tend to see a continuous decline in the output.
There has been a considerable decrease in demand for our services as a result of a lot of activities having been brought to a halt. While some of the drilling campaigns and projects were cancelled, most of them have been postponed.
The Kwanda logistics base, which supports the northern blocks, has had its gates closed to daily access – of course with the good intention of mitigating the infection risks, but this has posed a major challenge to and put serious limitations on companies operating inside the Kwanda base.
We have entered into an unforeseen period where companies face challenges on a daily basis to continue thriving and need to reinvent themselves in this “business as unusual” context. The industry actors’ financial performance has been severely negatively affected. We believe that this is a phase that is going to pass and AES is committed to pressing ahead without compromising on our quality or principles. We are confident that better days are coming and that keeps us going.
How has Covid-19 affected existing contractual commitments across the energy value chain?
In principle, the escalating pandemic situation did not result in contract cancellations as such. We still have the contracts, although having the contract is not the same as conducting active business, especially if the clients do not require the service for the moment.
It is our understanding that the clients do not necessarily see the need to change contract conditions because of the pandemic, and they remain hopeful about restarting their activities soon. Having said that, there is still a high level of uncertainty. Nobody knows what is actually going to happen. We always need to be ready and vigilant, in case things improve, to start up immediately.
In fact, tenders are still issued across the industry for various activities and projects, and we have continued up until now to submit our bids for the various services, so there has been no significant impact in terms of expected long-term projects ahead.
One aspect that has been of great importance is the fact that AES has invested a lot in local content. 95% of AES’ workforce is Angolan across all levels of the organisation, and this has proven of extreme benefit during the phase of travelling restrictions when AES continued delivering services requiring high technical know-how, relying on the local personnel without any compromise to the quality thereof.
How have the past couple of months changed AES’ organisational speed and efficiency?
The situation of course has forced us to readapt in many ways. We have redesigned a lot of our existing procedures and processes, especially because of the need to adjust to the new-reality requirements and the need to ensure business continuity. We also brought in new tools to allow people to monitor activities remotely and still be productive. Of course, these had additional costs in a time when we did not need additional costs and that was a price to pay to guarantee the business continuity.
Other than these adjustments, we still operate as normal. We have a system which we believe to be robust enough and which presents no need to make any significant upgrades or changes.
How has compliance with Angola’s 2018 legislation on waste management in the oil and gas industry evolved in the past two years?
In terms of legislation, we believe there has been enough coverage to ensure that the industry is making operations more sustainable. There are surely a lot of improvement opportunities. There are some industry actors that are not so willing to abide by the legislative items in place and keep looking for loopholes to use, and that can easily compromise what the sustainability concept is all about, which I am afraid may be very costly in long term for the country’s environment.
That is why, as AES, we have built a lot of capabilities and made them available for the industry to use. The government has been putting in significant resources to ensure that compliance with the regulation is done rigorously and without any compromise, but there is always room for improvement. Compliance has to be well monitored and controlled; otherwise, noncompliance will make headway and become very costly for the community, for the authorities and for Angola as a whole.
To what extent could Covid-19 intensify the urgency around promoting and expanding sustainable energy solutions in Angola?
For those not intending to abide by certain principles, the Covid-19 situation can easily be used as a scapegoat. However, Angola is part of a bigger community, which is the world. When the world moves in a direction, no country has much of a choice to take an opposite direction and eventually, one will end up driving by oneself, which may lead to nowhere.
I think no market in the world is completely ready for immediate change and becoming dependent on renewable energy only. Many systems have been built to still depend on oil and Angola is still making investments towards the utilisation of oil.
Angola recently started the construction of a photovoltaic solar power plant in the northeast of the country and many other projects are in the pipeline. There are steps being taken and, just like everywhere else, I believe we are going to see more and more incentives for the integration of renewables. It cannot be an overnight change.
A clean conscience and sustainability need to be spoken about more. Historically, renewable energy sources have faced scepticism everywhere in the world and the energy transition has only started to gain real momentum in the past few years. Today, we see the big oil companies rebranding themselves into energy companies and establishing their renewable energy arms. Eventually, this trend will continue and Angola is no exception. There is, however, still a need for a lot of discussion and engagement to bring consciousness to the people who have an important role to play in this process.
What is AES doing to raise employee awareness about sustainability?
AES has been certified to the ISO 14001 standard, which in itself is a very rigid standard demanding from the organisation a conscious approach in the utilisation of the non-renewable resources with the requirement of continuous improvement in the adopted approach, with a special focus on the reduction of energy, oil and water consumption. We have a whole management system built around this certification standard.
At the moment, most electricity that industry actors are using to maintain their offices and operations comes from non-renewable resources. We have to build consciousness within our organisations, pass this message on to our clients and make sure that we act as a motivator for them to abide by these principles as well.
We look at AES as an indispensable tool for the oil and gas sector and the government of Angola to continue using this critical sector of the economy and be able to rely on it with a mentality of sustainability. AES is a tool which the government can use to implement environmental principles and ensure sustainable oil and gas production.
What is your short-term outlook for the industry and market demand?
We believe the industry will try to re-initiate the projects which have been stalled and which we have always been ready for. The general consensus is that we won’t be seeing any new projects for the next 12 months. 2021 will be about trying to bring things back to normal and we don’t yet know to what extent this will be a new normal.
We have some new development projects in store. We plan to build an additional landfill for the disposal of waste and we’ve already started engaging with the authorities for this and as soon as the industry climate allows it, we will start with environmental impact studies. Within the next three to four years we hope to have this new landfill facility, which we plan to transfer the current Luanda operations to.
Together with our clients, we are also looking at the need to diversify our services while keeping abreast of what the key industry actors are moving towards. If we are there to serve them, we need to understand where they are going so that we can project and plan clearly how to be of better service to them.