Sectors

Oil & Gas

The Western Cape’s Fastest Growing Sector

Over the past decade, the development of South Africa’s oil and gas resources and the rapid growth of upstream opportunities in West Africa have led to an accelerated growth in upstream markets and there is now a significant oil and gas supplier base in South Africa.

Africa produces 8 million barrels of crude oil per day, some 10% of the world production, with Nigeria and Angola accounting for more than 80%. The market for offshore oil and gas platforms and components, services and repairs to support these operations is large and growing. The Western Cape and Cape Town is ideally placed to service this growing demand – it is geographically close to West Africa, and offers well-developed infrastructure as well as cost-efficient engineering capabilities. Most international exploration and oil refining firms have a presence in the City of Cape Town.

The main facilities are located in Cape Town, Saldanha Bay and Mossel Bay. The Cape Town suburb of Milnerton is host to one of South Africa’s four oil refineries, Chevron Refinery. The plant produces products such as jet fuel, bitumen, sulphur and paraffin, and employs 330 people.

Saldanha is the site of the country’s largest oil-storage facility. PetroSA maintains six tanks, each of which has a capacity of 1.19 million cubic metres. PetroSA’s gas-to-liquid (GTL) refinery in Mossel Bay is the country’s leading gas facility, with a capacity of 36,000 barrels per day (bbl/d) which is the equivalent of 45,000 barrels of crude oil per day.

 

For more information on the Marintek Offshore Supply Base study, click here

The Industry in Numbers:

  • Economic output of the sector in the Western Cape is close to ZAR1bn, with approximately 4,000 people employed in the sector
  • It is estimated that the market will grow by between 4 to 6% p.a. over the next five years (2010 to 2015)
  • Foreign Direct Investment in the sector reached ZAR65m in only 3 projects between 2004 and 2010 – FDI growth in the sector is expected to grow exponentially with the developments and recent discoveries

Main Advantages of Investing in the Western Cape in Oil and Gas

  • The geographic location (in proximity to the oil and gas fields), sophisticated business environment, industrial strength and good port facilities (Cape Town and Saldanha)
  • The presence of the South African Oil and Gas Alliance who has their headquarters in the Western Cape is a strong sector body that supports the interests of their members
  • The anticipated development of an offshore supply base in Saldanha Bay is a project that could act as the catalyst for the industry in the Western Cape

Incentives

There are no dedicated incentives focusing on the oil and gas sector in South Africa at the moment. Nonetheless, the oil and gas sector was included in the rolling plan of the 2011/12-2013/14 Industrial Policy Action Plan. For large capital projects, the 12i Tax Allowance will be of key importance for projects proposed in the Saldanha Bay area. For more information, please click here to be directed to our incentive brochure, or alternatively contact the portfolio manager listed below.

Contacts

For further information, please contact the Portfolio Manager below:

Tel: +27 (0)21 487 8600