Sergio Garcia

The oil and gas inspection and certification sector depends on knowledge. The sector uses information and knowledge instead of machinery and factories.

Sergio GARCIA Area manager Sub-Saharan Africa DNV GL

in figures

DNV GL active in Angola's offshore sector since2002

Expand the inspection sector

December 2, 2015

DNV GL area manager Sergio Garcia talks to TOGY about how low oil prices have affected Angola’s oilfield services sector and the potential for local services providers to expand regionally. He also discusses the development of the national workforce and plans for onshore drilling in Angola. DNV GL has been active in the country’s offshore sector since 2002.

How do low oil prices affect Angola’s inspection and services sector?
Services companies and operators in the oil and gas industry are adjusting to the new reality. Business in the oil industry is cyclical, so companies have to find a way to survive the current downturn. The services sector, as with others in this market, needs to reduce costs and increase efficiency.
The progression of Angola’s local content initiatives provides interesting opportunities to companies that provide inspection and certification. All new facilities and expanded operations, whether belonging to new local companies or subsidiaries of foreign companies, must adhere to international standards. The demand for third-party inspection and certification services will grow as new businesses and projects are established.
Angola has a stable market for ship and offshore unit classification, as well as material components verification services. Because demand is constant, investing in a permanent base for these specific services is sensible.
Onshore oil operations in the country have potential, but that is a sensitive subject due to environmental concerns from the public. However, the government has announced a new onshore licence round.
If trials are successful and companies find oil, there will be more onshore activity. The services sector will not lead the charge, but will follow its clients. The fall in new discoveries of oil offshore might cause onshore exploration to receive more attention from the services sector.

What is the demand like for inspection services?
Equipment in the local oil and gas industry requires constant verification and recertification. Most of the country’s oil and gas is produced offshore, where corrosion is an issue. The salinity and humidity accelerates the corrosion of steel structures on vessels and offshore platforms. Platform operators need to put in considerable effort to control and avoid corrosion so that production is not affected. Operating offshore Angola requires constant maintenance, and maintenance necessitates regular inspections.
Quantitative risk analysis and general risk management markets are very competitive. Companies that tried to offer these services with expatriates on a permanent basis in-country were not economically viable. When clients need such services and require international experience, they acquire them from foreign experts. Companies that have both local and international operations act as gateways, bridging the Angolan oil and gas industry and international expertise.

 

Is there room to expand the scope of the local services portfolio?
Angola’s offshore hydrocarbons industry is still relatively young. As the industry expands and matures, demand for services will grow. The market might be ready to provide enough demand for marine warranty services executed by a local department. Marine warranty services play a critical role in risk reduction for major projects.
The move to locally develop marine warranty services has been prompted by Angola’s local content requirements. Companies face challenges such as obtaining visas for foreign workers. This lengthy and sometimes difficult process makes the need for local content more urgent.
The pool of qualified Angolan workers is small and competition for their services is stiff. The local workforce needs time to prepare and train to reach the standards expected and required and by the oil and gas industry. In the meanwhile, bringing in experienced expatriates is still sensible. Local content is very important, but so are safety and quality, which come with experience.

What approach should be taken to develop the local workforce?
The oil and gas inspection and certification sector depends on knowledge. The sector uses information and knowledge instead of machinery and factories. Investing in personnel is key in this line of work. Companies must educate their employees, send them abroad and increase their competencies. By educating its workforce, the domestic services sector can expand and broaden its portfolio, while contributing to the country’s development.

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