Scottish oil groups ‘should tap Africa’s potential’
Posted on :Thursday , 24th November 2016
Scottish oil companies that are struggling in the North Sea are being urged to look to Africa to secure their future.
The suggestion comes as the first Scotland Africa Oil & Gas Forum brings senior government officials from the continent to Aberdeen today. Komi Sélom Klassou, prime minister of Togo, is being joined by energy ministers from Senegal, Ivory Coast and Congo (Brazzaville). Paul Wheelhouse, Scotland’s minister for business, innovation and energy, will attend the event.
While African oil and gas typically has been focused on the likes of Egypt, Algeria, Angola and Nigeria, new frontiers are opening up. Last year Africa was home to eight of the top 20 oil and gas discoveries and it is on course for a similar performance this year.
Scottish-based explorers and producers, such as Cairn Energy, Bowleven and Eland, have substantial interests in Africa, while service providers including Wood Group operate in several countries.
Enermech, a mechanical engineering specialist, expects to double its African workforce to 300 by the end of next year and is forecasting that revenue from the continent will rise by 45 per cent to £24 million. It has bases in South Africa and works in Ghana, Nigeria, Angola and the Democratic Republic of Congo.
Steve Ord, EnerMech’s regional director for Africa, said: “Africa has huge potential, both offshore and onshore, and many of the hard lessons learnt by working in the North Sea and other mature basins over many years has positioned us to play a central role in some of the largest projects, which are just starting or will kick off in the next few years.”
Ian Knott, advisory director at Grant Thornton, the accountancy, in Aberdeen, said that many Scottish companies needed to get into new markets. “Greater international collaboration could unlock new sources of revenue and provide much-needed growth at a time when many businesses are suffering from a lack of demand and significant pressure on costs in their existing markets,” he said.
The event, organised by Aberdeen & Grampian Chamber of Commerce and the Scotland Africa Business Exchange, will look at the opportunities for Scottish companies to become involved in a wide range of projects.
Roger Connon, head of office at Pinsent Masons, the law firm, in Aberdeen, said there were several areas where African countries were showing interest in tapping into the experience of Scottish and UK-based companies.
“There are a significant number of western oil services companies looking for opportunities across Africa, which is mirrored in demand for expertise and skills in sectors as varied as harbour services, aviation, seismic testing, heavy lifting, logistics and infrastructure,” he said.
“In countries in eastern Africa, there are a number of huge projects under way, driving demand for many services, which Scottish oil services companies are expert in providing, and there is a lot of vying for position to sell skills through joint-venture vehicles.”
Frazer Lang, managing director of Scotland Africa Business Exchange, an independent consultancy, said: “Governments across Africa have recognised that changes in attitudes and perception are vital for attracting the expertise needed to realise the continent’s potential.
“It is becoming increasingly clear to governments on the continent that if they want to attract new companies to their oil and gas sectors in these challenging times, they must offer an attractive environment for business.”
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