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Western Cape Business 2021

  • Text
  • Tourism
  • Renewables
  • Energy
  • Transport
  • Business
  • Investment
  • Oil
  • Gas
  • Agriculture
  • Port
  • Overview
  • Economic
  • Manufacturing
  • Nedbank
  • Provincial
  • African
  • Banking
  • Sector
  • Western
  • Cape
The 2021 edition of Western Cape Business is the 14th issue of this highly successful publication that, since its launch in 2005, has established itself as the premier business and investment guide for the Western Cape. The Western Cape has several investment and business opportunities. In addition to the regular articles providing insight into each of the key economic sectors of the province, a special feature on thriving agricultural exports gives insight into the details of what fruits and wines go where. An interview with the Port Manager of the Port of Cape Town provides more understanding of the scale of the logistics operation that is a major port. Another special feature examines the City of Cape Town as a national headquarters for the thriving asset management sector. The cover picture reflects an exciting new find of gas condensate off the south-eastern coast, a potential game-changer for the Western Cape and South African economies. This new development is covered in the overview of the oil and gas sector.

OVERVIEW Oil and gas Gas

OVERVIEW Oil and gas Gas finds off the Southern Cape coast have vast potential. SECTOR INSIGHT The Chevron refinery produces petrol, diesel, jet fuel and liquefied gas. In 2019 Total and its partners created a stir with the announcement that gas condensate had been found at a site called Brulpadda off the coast of Mossel Bay. In 2020, the nearby Luiperd prospect in Block 11B/12B delivered more exciting news. The block, in the Outeniqua Basin 175km off the southern coast, covers an area of about 19 000km² in water depths of 200-1 800m. The exploration was done by the semi-submersible rig Deepsea Stavanger, which journeyed twice from Norway to lead the exploration projects. The two finds raise the odds of Total investing in what it calls a “world-class” offshore gas site. The drilling campaign employed 195 South Africans with specialist skills but the potential spinoff is enormous for the Western Cape and South Africa, if the find leads to drilling and commercialisation. If Total goes ahead, the PetroSA GTL refinery at Mossel Bay (Mossgas) could be revived and the idea of creating a gas market in South Africa would get a massive boost. Commissioned in 1992 as the world’s first gas-to-liquids (GTL) refinery, Mossgas was due to close in 2020, because, as President Ramaphosa announced, it had practically run out of feedstock. PetroSA is South Africa’s national oil company. Petroleum Agency South Africa (PASA), which encourages exploration and regulates the oil and gas industry, has noted the significance of international oil companies committing to exploration off South Africa’s coast. Increased confidence by such companies can only lead to growth in the industry, and with the massive gas finds in the Rovuma Basin off Mozambique in 2020, there are sure to be more companies interested in South Africa’s potential. In addition to adjudicating on coastal fields, WESTERN CAPE BUSINESS 2021 30

OVERVIEW the agency has awarded coalbed-methane-gas exploration rights in KwaZulu-Natal and natural gas exploration permits in the Free State. Natural gas lies also lies offshore to the west of South Africa in the Atlantic Ocean (Ibhubesi). Block 2A of the Ibhubesi gas field north-west of Saldanha is estimated to have reserves of 850-billion cubic feet of gas. Industrial gas manufacturing in the Western Cape is a particular focus for Air Products, a part of the Metkor Group controlled by Remgro. The company is one of the largest supplier in the pipeline and on-site markets. The Western Cape’s status as an oil and gas hub was enhanced in 2017 with the opening of a new open-access liquefied petroleum gas (LPG) import and storage terminal at Saldanha Bay. A publicprivate partnership is behind the R1-billion terminal, the largest of its kind in Africa. Investors include Sunrise Energy, the Industrial Development Corporation (IDC), the Public Investment Corporation (PIC) and Royal Bafokeng Holdings. Oil Cape Town’s oil refinery changed hands in 2018 when Off The Shelf Investments (OTS) completed a 3-million purchase of Chevron’s downstream assets in South Africa. Chevron has been rebranded as Astron, but the Caltex service-station brand has been retained. OTS is the Black Economic Empowerment (BEE) partner of mining giant Glencore, who financed the deal. The refinery in Milnerton produces petrol, diesel, jet fuel and liquefied gas for the Western Cape and for export to other African countries. The Western Cape spends R76-billion annually on crude oil imports and exports refined petroleum to the value of R13.2-billion. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. Reduced global prices for oil and troubles in the container ship market has caused some stress in the local sector but the long-term prospects for shipping and oil and gas are still strong enough for national government to pursue Operation Phakisa (which includes a strong maritime economy push) and for the Transnet National Ports Authority to spend heavily on upgrading the nation’s ports. The Western Cape Provincial Government reported that in 2016 that the oil and gas sector contributed R1.03-billion to the ONLINE RESOURCES National Energy Regulator of South Africa: Petroleum Agency of South Africa: PetroSA: South African Oil and Gas Alliance: province’s gross value add. More than 7 000 direct jobs were created in ship and rig repair sector of the oil and gas business in 2015. The Saldanha Bay Industrial Development Zone (SBIDZ) is central to the plan to grow the sector. Staff from the SBIDZ actively sought investors for the zone at the Africa Oil Week, which was held in Cape Town in 2019. Nine investors, ranging from gas maintenance and repair companies to domestic and foreign oil companies, have already committed to the SBIDZ. The Western Cape Provincial Government and the National Department of Trade, Industry and Competition invested R500-million in the development of core infrastructure at the Saldanha Bay IDZ. The Saldanha Bay IDZ has signed a lease agreement with the Transnet National Ports Authority. The Bergun terminal, comprising 12 tanks located on the Eastern Mole of the Port of Cape Town, has added to the port’s fuel storage capacity and is connected by pipeline to the Astron refinery. The Council for Geoscience (CGS) is doing an intensive study of South Africa’s potential shale gas resources. The major economic sectors using gas are the metals sector and the chemical, pulp and paper sector. Brick and glass manufacturers are also big consumers. ■ 31 WESTERN CAPE BUSINESS 2021

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