Cape oil and gas sector to drive economic growth – for who?

In his address for the Department of Economic Development and Tourism 2015/16 budget vote in March, Alan Winde, Minister of Economic Opportunities elaborated on the growth initiatives for, amongst others, the oil and gas sector. Under the umbrella of Project Khulisa (Project “Nurture”) Winde says that the Western Cape Government aims to deliver over 200,000 jobs – under a high growth scenario – 60,000 of which will come from the oil and gas sector.

The major project driving this growth is the Saldanha Bay Industrial Development Zone (IDZ.)  The IDZ business model is based on upstream and midstream services including rig repairs. By turning Saldanha Bay, the deepest natural port in the Southern Hemisphere, into an internationally competitive rig repair hub, Project Khulisa proposes to increase the economic contribution of the oil and gas sector from its current R5bn pa to R11bn pa.

One of the biggest hurdles that the province, indeed the country, is faced with across the manufacturing sector is a shortage of skills – a point Winde readily accepts.

“To illustrate the projected demand for Oil and Gas, 1,500 people from 30 different occupations are needed to repair one rig. By the time the IDZ comes online, there will be demand for 18,000 jobs in Saldanha. We currently fall far short of this, and must encourage the development of new artisans.”

Winde went on to say that his department will be addressing the issues with national government that affect the oil and gas industry, including:

  • Regulatory blockages including delays in obtaining abnormal vehicle registrations and abnormal load permits
  • Sections of the Customs and Excise Act (Act 91 of 1964) that affect the temporary importation of oil and gas vessels and parts

The ministry is also working with businesses to minimize the impact of loadshedding on economic growth. Solutions that they are working on include actively fostering alternative energy supply and landing Liquefied Natural Gas in the province. These solutions are centralized around the Atlantis Special Economic Zone (SEZ,) the rules for which have just been opened for comment.

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