The future electric

Angola

Miguel Dias Correia, the CEO of ISQapave, talks to TOGY about the glut of oil production worldwide, the outlook for the business climate in Angola and future investment areas. ISQapave is a joint venture created in 2005 by the Portuguese firm ISQ and French company Apave to provide certification and quality control inspection services. ISQapave will be responsible for the NDT, training of technicians and inspections of Total's Kaombo project after production starts in 2018. ISQapave is subcontracted to do all inspection and testing for the Falcão pipeline connecting offshore fields to Angola LNG.

• On oil output: “In my opinion, there’s too much oil in the world market. Unless there is a catastrophe in production somewhere, we will continue to have too much oil in the market to increase the price.”

• On outlook: “Let’s see if 2019 will be the year we can recover, but 2018 will be a problematic year. If nothing changes, I believe that in 2018 a lot of companies will leave the country, close or reduce their operations to a minimum.”

• On investment: “If the future is electrical, we need to have electrical power. For electrical power, we can have combined-cycle equipment.”

How were market conditions in 2017?
Conditions for 2017 were quite bad, meaning that most of our clients saw their production at a minimum level or even without any kind of work. As we are a TPA, meaning inspection, NDT and metrological company, we are suffering in turn. Our main clients, metallomechanical companies like isqapave/”>ISQapave can be involved in the project. The first years of a project are about arranging investments. Let’s see if 2019 will be the year we can recover, but 2018 will be a problematic year. If nothing changes, I believe that in 2018 a lot of companies will leave the country, close or reduce their operations to a minimum.
There’s a lot of responsibility in the hands of opec/”>OPEC?
In my opinion, there’s too much oil in the world market. Unless there is a catastrophe in production somewhere, we will continue to have too much oil in the market to increase the price. The future is much more electrical, with the new legislation in Europe, and that trend will probably be followed by other countries. After [President] Donald Trump’s era, the US will probably also invest in electric cars, buses and so on. If companies go electrical, meaning that the important component is no longer oil, they will need metals to build batteries like lithium, cadmium or others that are becoming very expensive.
If the future is electrical, we need to have electrical power. For electrical power, we can have combined-cycle equipment. Europe also seems to no longer be the nuclear capital of the world. Other countries like the UAE may build nuclear plants, because with the low price of oil, these other countries must turn to solar or nuclear to even produce water.
I suppose that the price of oil will not increase significantly. It might go to USD 65-70 in two or three years. It only goes up for a short amount of time if there is a problem between countries.

Are you disappointed by the lack of downstream development, particularly the cancelled or suspended refinery in Lobito?
Of course, we have been waiting for this Lobito refinery for 15 years. There were rumours about another refinery built by a Chinese company in Soyo, then rumours of another refinery with the Chinese in Barra do Dande. Now the rumours are that there will be a refinery in Namibe with the Russians. But after 15 years of waiting, I don’t believe anything. If something starts, we are here.

How qualified is the Angolan workforce?
We have trained local manpower. Our total count has been reduced by 50%. We now have 165 people. Last year we had 239, and in 2015 we were almost 300. So, we have dismissed a lot of our people. The expatriates are mostly gone. We have been trying to replace them with Angolans. In some areas, we have succeeded, but in other areas we just haven’t been able to. Of course, keeping expatriates here is very difficult because no one wants to be in Angola, to be paid in Angolan kwanzas or to wait for four months or more to be paid. We have Angolan guys who are good, but when we reach a high technological level, there’s no one here with that expertise, knowledge or experience.

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