In this issue

From the CEO P.1 Port Booking System P.2

Phakisa Roadshow—London P.2 Hydraulic Fracturing P.3

OPASA and ONPASA P.3 Upcoming events P.4

Operation Phakisa Update

As indicated in our last newsletter,

the aim of Operation Phakisa is to

identify growth areas in the Ocean

Economy.

SAOGA participated in the marine

transport and manufacturing; and

offshore oil and gas exploration

labs.

The first phase of the labs was

launched in October last year.

Since then, meetings have been

held to take forward the various

initiatives identified by the labs,

including: Oil & Gas legislation; local

content; environmental govern-

ance; emergency drills, skills devel-

opment; and port infrastructure.

The Department of Performance

Monitoring and Evaluation in the

Presidency is responsible

for the monitoring of

progress on the various

initiatives identified.

O&G Quarterly The Publication of the South African

Oil & Gas Alliance ISSUE 06 Q2 2015

From the CEO It has been a year since the industry, government and

other stakeholders participated in the labs at Operation

Phakisa, the aim of which was to identify growth areas in

the Ocean Economy.

SAOGA participated in the marine transport and manu-

facturing; and offshore oil and gas exploration labs.

Since August 2014, the working groups involving key

stakeholders have undertaken meetings to achieve the

objectives of each working group.

During the year, membership has continued to show sustained growth, and includes

global operators, field service companies, engineering and procurements organizations,

consulting firms and a significant number of local firms that provide support to the

African Oil & Gas industry through consulting, project management, fabrication, repairs

and maintenance and support services.

The organization has also reached out

globally and in the Sub-Saharan Africa

region through industry events, mis-

sions and interaction with key role

players in the Oil & Gas sector. Of

particular importance is advocacy for

the development of African Regional

Content to foster the development of

the regional industry and working

with African and global institutions to

facilitate skills development.

Since the launch of the virtual Marine,

Oil & Gas Academy in August last

year, industry as well as private and

public training institutions have con-

tributed to the portal.

SAOGA continues to place learners at

work placement programmes and

thanks employers for their contribu-

tion to the development of skills for

the sector.

Since 2013, SAOGA has placed more

than 218 candidates in work place-

ment programmes with a success rate

of 78%.

As an organization, we are ready to interpret and address the challenges and opportuni-

ties facing the Oil & Gas sector for our members and industry…

Serving the interests of

Industry and Members in

the Upstream and

Midstream Sectors of the

Oil & Gas

Web-based system transforms SA ports Transnet National Ports Authority (TNPA)

has unveiled a new Web-based Integrated

Port Management System (IPMS) in a bid to

alleviate congestion at its ports around the

country.

The IPMS went live on 26 July at the pilot

site, the Port of Durban, with the crude oil

tanker, Colorado, the first to be brought into

the port using the new system.

"Since 2008, various feasibility studies were

undertaken where we identified the need

for an automated and Web-based system to

improve port operations, strengthen effi-

ciencies and enhance competitiveness," says

chief executive at TNPA Richard Vallihu.

This online system will help transform SA's

ocean gateways into smartports by using

advanced information technology that will

make them more intelligent and sustainable,

while conserving resources, time, space and

energy, he adds.

The system will be available as an app on

customers' smartphones and tablets, replac-

ing the manual tracking system.

“We are moving away from transacting on

paper and by embracing technology we will

gain efficiencies in terms of booking ships

and limit errors," says Captain Rufus Lekala,

chief harbour master.

TNPA believes this is the start of one of

many initiatives that will see Transnet create

visibility within the transport value chain and

enablement of the connectedness of the

transportation ecosystem ranging from

ports, rail and road. "TNPA has recognised

the need to become an advanced port sys-

tem that creates visibility of ports processes

to enable transparency.” (source: ITWeb)

International Investor Roadshow—London

The government has extended an invitation

to British investors to participate in SA’s

ocean economy as it seeks foreign support

for its Operation Phakisa programme, which

aims to increase the sector’s share of the

country’s gross domestic product (GDP).

Deputy Transport Minister Sindisiwe

Chikunga, who was in London for an Opera-

tion Phakisa oceans economy investment

seminar last week, said SA’s geographical

location offered a "huge opportunity" for

investing in a diversified maritime market

because it was situated on one of the busiest

international sea routes.

Those at the seminar included UK shipbuild-

ers, maritime transporters, and import and

export business.

"Our proximity to the growth markets of the

offshore oil and gas markets on the east and

west coast (of Africa) mean we are within a

few days by ship to these waters. This pre-

sents a good opportunity for ships and rig

repair, and, through Operation Phakisa, SA is

fast-tracking the delivery of rig repair infra-

structure," Ms Chikunga said.

"According to researched information, com-

bined, the oceans economy has the potential

to earn up to £9.8bn (about R189bn) to GDP

and create just over 1-million jobs."

This could be achieved by 2033 and com-

pared with the 2010 contribution of R54bn.

President Jacob Zuma has targeted an in-

crease in the ocean economy’s GDP contri-

bution of more than R20bn by 2019.

Ms Chikunga stressed that the success of

Operation Phakisa would depend on the

level of co-operation achieved within the

government and between government and

the private sector not only in SA but abroad.

(sourec: BD-live)

4-7 May 2015, Houston: Experts

from the offshore energy industry

around the world came together for

the 2015 Offshore Technology Con-

ference at Reliant Park in Houston.

Attendance at the annual confer-

ence dropped to 96 000, reflecting

prevailing market conditions, after

last year’s 46-year high of 108 300,

the highest in show history.

SAOGA in collaboration with the

Department of Trade and Industry

(DTI) organised and arranged a pavil-

ion at the event.

The latest edition of the Port Hand-

book was launched by SAOGA CEO

Mr Ebrahim Takolia and Mr Richard

Vallihu, CEO of TNPA.

9-11 June 2015, Calgary: SAOGA

supported the DTI at the Global Pe-

troleum Show and Capital Energy

Forum. The event plays

host to 95 countries and

serves as a platform for

connecting the global

energy industry.

OTC 2015

Global Petroleum Show

Hydraulic fracturing regulations published The long-awaited and heavily-debated Regu-

lations for Petroleum Exploration and Pro-

duction were enacted on 3 June 2015. The

regulations prescribe technical and environ-

mental standards for onshore hydraulic frac-

turing. Development of the regulations has

been underway since the cabinet lifted the

moratorium on petroleum exploration in the

Karoo in September 2012. The promulgation

of the regulations means that exploration

companies may now conduct hydraulic frac-

turing provided all necessary statutory au-

thorisations are in place. The Minister of

Mineral Resources is expected to take a de-

cision on pending Karoo exploration right

applications in the coming months.

The regulations do not differ markedly from

the draft version that was published for pub-

lic comment in October 2013, although off-

shore operations are now excluded.

Notably, confusion around the nature of the

environmental impact assessment pre-

scribed for hydraulic fracturing in terms of

the draft regulations has been removed by

aligning the provisions with the National

Environmental Management Act (NEMA).

The draft regulations prescribed a distinct

environmental assessment process, subject

to specific procedures and requirements.

The final regulations have deleted these

provisions and instead reiterate the require-

ment that a person undertaking exploration

and production activities must hold a valid

environmental authorisation in terms of

NEMA. Accordingly, the environmental as-

sessment process prescribed in the Environ-

mental Impact Assessment Regulations,

2014 must be followed.

Many will be pleased that the section on

water monitoring has been refined. The

applicant or holder is now required to ap-

point an independent specialist to conduct a

hydrocensus which indicates potentially

affected water resources.

The draft regulations provided that the cen-

sus had to be conducted on at least, a one

kilometres radius from the furthest point of

potential horizontal drilling. The promulgat-

ed regulations extended the radius to three

kilometres. Applicants are also required to

prepare and submit a water resource moni-

toring programme with the water use li-

cence application to the department respon-

sible for water affairs.

A potentially contentious aspect that has not

been modified in the final version of the

regulations relates to disclosure of the com-

position of hydraulic fracturing fluids. Right

holders are required to disclose a range of

information about the fluids to be used in-

cluding the trade name of each additive and

its general purposed in the fracturing pro-

cess. Each chemical intentionally added to

the base fluid, including the chemical, the

chemical abstracts service number and the

actual concentration must be disclosed.

There is an obvious tension between envi-

ronmental and intellectual property inter-

ests where hydraulic fracturing fluid is con-

cerned. In order to ensure environmentally

responsible operations, the authorities must

be informed of any potentially toxic chemi-

cals to be used. However, in many cases

these fluids are patented or considered

trade secrets and their composition is not

made known to the right holder by the sup-

plier. It remains to be seen how these con-

flicts will be resolved in the South African

context.

The requirement for the relevant govern-

ment agency to be present at a myriad of

exploration activities remains and govern-

ment will have to increase its capacity to

fulfil this function.

Lizel Oberholzer (Director) and Jane

Blomkamp (Associate) Norton Rosefulbright

SAOGA represents its members and

industry in the services sector. Other

upstream organisations include:

The Offshore Petroleum Association

of South Africa (“OPASA”) is a mem-

ber funded representative body for

the offshore upstream petroleum

industry in South Africa. Member-

ship in the Association is only open

to companies that have applied for

or hold permits, exploration or pro-

duction rights offshore South Africa.

The Association serves as a platform

for members to engage on matters

of common concern, including envi-

ronmental compliance, health and

safety, legislative and regulatory

proposals.

For further details email Nazly Simon

at: n.simon@impactoilandgas.co.za

The Onshore Petroleum Association

of South Africa (“ONPASA”) is a non-

profit association. Membership in

the Association is open to holders of

and applicants for upstream petrole-

um rights.

The Association seeks to promote

public awareness of the industry and

its activities and serves as a platform

for engagement on common matters

of concern, including, fiscal, environ-

mental and health and safety is-

sues. For further details

contact Lizel at:

Lizel.Oberholzer

@nortonrosefulbright.com

OPASA

ONPASA

Membership

SAOGA has changed its membership cycle. As of 1 April 2014, members will be invoiced

annually from 1 April to 31 March of the following year. This is in line with SAOGA’s financial

year, and also allows SAOGA to streamline the processes and administration associated with

membership. As a member, you may also request a member certificate.

For further information you may contact Belinda Williams.

T: +27 (0) 21 425 8840 E-mail: bwilliams@saoga.org.za

O&G Quarterly

© South Africa Oil

& Gas Alliance 2014

The event held with the support of the South African IPP Programme covers aspects related to

the gas-to-power RFI announced in May 2015.

South Africa Gas Options —28 to 30 September 2015, Cape Town

The objectives of this conference are to raise awareness of options using gas for Sustainable

access to energy, and social and economic development.

World Bank Gas Competence Seminar—21 to 23 September, Maputo

Meet with terminal operators, procurers and fuel logistics companies active in this dynamic

and growing sector in Africa.

Argus Africa Storage and Logistics—16 to 17 September, Durban

SAOGA, the DTI and TNPA will attend Europe’s largest Oil & Gas conference held bi-annually in

Aberdeen, Scotland.

Offshore Europe–8 to 11 September 2015, Aberdeen

Upcoming Events

9th Floor, Convention

Tower, Heerenracht

Cape Town, 8001

+27 (0) 21 425 8840 ph

www.saoga.org.za

Preferential or exclusive access

to industry networking events

including breakfasts, company

visits, briefings and industry

forums.

Subsidized access to SAOGA

training programmes and cours-

es.

Free basic listing in the South

African Oil & Gas Directory.

Opportunities to work with

SAOGA to initiate industry fo-

rums and initiatives.

Opportunities to promote your

company within the local indus-

try through "featured company"

events and website exposure.

Access to the SAOGA network

of affiliated international organ-

isations (currently in the UK and

Norway with more to come).

Preferential participation in

SAOGA-organised trade mis-

sions and industry exhibitions

and trade shows.

Access to funding for trade mis-

sions and exhibitions.

Membership Benefits