Angolan Bonanza

Published Dec 11, 2003
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The world offshore market is expected to grow by some 20 per cent from 2001 to 2004, with growth being driven primarily by deepwater production in West Africa, which is expected to grow by a whopping 65 percent. ABB is among the companies cashing in on the new oil rush.

A slew of giant deep water finds since French company Elf discovered the billion-barrel Girassol field in 1996 should help propel production from today’s 775,000 barrels per day (bpd) to 2m bpd within eight or ten years.

In addition, three licence areas further offshore are thought to contain the largest untapped oil reserves being offered for exploration anywhere on earth, and after these come into production in ten years or so output could rise to three million bpd or more, equivalent to over a third of Saudi Arabia’s output.

If we experience low world oil prices in the long run, some of these field developments could be delayed. But production will rise fast in any case, in contrast to Angola’s alluvial diamond resources, which are gradually becoming degraded after years of extraction, mostly by small-scale diggers or ‘garimpeiros.’

With three main projects and several product, service, drilling equipment, sub-sea and maintenance projects also running, ABB is set to take part in the latest oil bonanza. ABB Offshore Systems head Rasmus Sunde recently spoke to Scandinavian Oil & Gas about ABB’s activities in Angola.

Q: How long has ABB been operating in Angola? What were your revenues in Angola last year?

A: We have been in Angola for several decades, and ABB is currently employing more than 200 people in the country. The revenues figures will vary from year to year depending on the projects in the backlog, we are, however, not releasing revenue figures on a country basis.

Q: What are ABB’s most important activities in Angola for the moment? What are the most interesting areas of future development?

A: The most important activities for the moment are the deepwater development in the areas of floating production and subsea production. In addition, we are particularly interested in the area of modification and maintenance - both as an avenue for profitable development but also as a vehicle to improving our in-house capabilities and presence in the country.

Q: What are you biggest challenges right now as head of ABB Offshore Systems?

A: The biggest challenges from a global perspective are our efforts towards the deepwater markets, i.e. technology/R&D, execution and build up in the local markets. Further, to ensure that the timing of resources and technology is well matched with the need and timing of our customers.

In Norway, there are two main challenges: Firstly, to tap into the interesting and growing opportunity of larger modifications - both surface and sub-sea. Secondly, as also a Norwegian-based supplier, internationalisation is a key issue to ensure we will be able to continue to maintain and develop the Norwegian-based pool of resources and that we through additional business internationally manage to maintain the current activity level despite the fact that the Norwegian market will change, and eventually decline in the future. In ABB, approximately 50 per cent of the revenues out of Norway are from non-Norwegian markets, in 2005, this shall up to approximately 50 per cent.

Q: While Unita funds its war almost entirely with diamonds, the Luanda-based government relies largely on oil. How do you respond to accusations that Africa is being stripped of its wealth by oil companies, and that thanks to corrupt governments, the average African is not seeing any real benefits from its new found resources?

A: I have also heard the accusations, although I do not have any personal experience. ABB has in general an extensive program; valid for all ABB operations worldwide and independent of country we’re operating in. This is to make a sensible contribution towards the effective elimination of bribery and corruption in business transactions. ABB practices a ‘zero-tolerance’ policy internally and violations will be subject to severe disciplinary action.

Q: What are ABB’s thoughts on sustainability, and what concrete steps is ABB taking to accomplish this in Angola?

A: In recent years, ABB has developed a clear and consistent strategy that guides its day-to-day sustainability activities. We seek to continuously improve our environmental and social performance, to participate in common efforts to address global problems, and to continuously improve the eco-efficiency of all our products, passing on this expertise to developing countries so they can benefit from our advanced technologies.

Regarding Angola in particular, we are continuously increasing our local presence and are also participating in several activities to make our contribution to the development of local societies.

In 1992, ABB adopted the 16 principles of the ICC’s Business Charter for Sustainable Development as its environmental policy and has worked hard over the last decade in raising its environmental performance to a high level. The international environmental standard ISO 14001 has been implemented in 98 percent of ABB’s manufacturing and workshop sites.

ABB launched a social policy at the beginning of 2001 and focused strongly during the rest of the year on preparations to implement the policy and raise social performance to the same high level reached with our environmental performance. Business ethics and occupational health and safety are integral parts of the policy and are promoted through special procedures and guidelines, reinforcing a ‘zero tolerance’ approach for unethical behavior and a ‘zero target’ for serious and fatal accidents.

ABB in Angola

Areas of activity:

  • Subsea Support Base in Malongo, Cabinda
  • Subsea Support Base Luanda
  • M&M at Luanda Refinery
  • Electrica Luanda
  • Subsea System fabrication at Lobito (Sonamet)

Key areas of focus:

  • Upstream EPC projects
  • Subsea
  • Downstream EPC projects
  • Maintenance& Modification
  • Operational Support Services

Current ABB projects in Angola

  • Exxon Kizomba Extended Tension Leg Platform
  • Chevron Kuito Subsea Production
  • TFE Refinery Modification and Maintenance

INTSOK in brief

  • Established in 1997 by the Norwegian oil and gas industry and the Norwegian Government, INTSOK - the Norwegian Oil and Gas Partners - has grown rapidly and now has a total of 85 partner companies.
  • INTSOK partners are active in most of the important markets, and the Norwegian industry has shared its expertise and skills at workshops and seminars attended by clients and international business partners. The partner companies represent the entire oil and gas supply chain, which encourages active dialogue between oil companies, technology suppliers, service companies and governments.
  • The INTSOK secretariat works with the partner companies, helping them to assess market opportunities and enhance their ability to compete in the global marketplace. It also assists them in developing their international relationships through close networks with government agencies at home and abroad.
  • The INTSOK secretariat provides customers and government authorities around the world with information about Norway’s oil and gas technology innovations, research and development achievements, cost reduction strategies and HSE measures.

Angola at a glance

  • Located on the Atlantic Coast of southern Africa, Angola is bordered by Namibia to the south and Zambia and Zaire to the east and north. Angola’s 1,600 km-long coastline and its four major ports make it a natural trans-shipment point for the entire region.
  • Land Area: 486,213 square miles
  • Population: 12 million (2000 estimate)
  • Capital City: Luanda
  • Languages: Portuguese (official), and over 60 other Bantu-group languages, including Umbundu, Kimbundu, Kikongo, Tchokwe, Ovambo.
  • Religions: Traditional beliefs (47 per cent) Roman Catholic (38 per cent) Protestant (15 per cent)
  • Climate: Tropical in the north, sub-tropical in the south
  • Time: +1 GMT

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