Two Saldanha Bay Industrial Development Zone (SBIDZ) executive members, Adinda Preller and Vanessa Davidson, represented the company at Africa Oil Week and Adipec. Below are some of their impressions and observations.
Africa Oil Week 2021, held in Dubai due to pandemic restrictions, provided an excellent platform for people from across the globe to make organic connections and catch up more informally on market and project developments. Networking was one highlight – the ability to meet with decision-makers in person.
The other was the realisation that the demands from the 2021 United Nations Climate Change Conference (COP26) for a transition to non-zero carbon emissions must be viewed within a realistic time frame. The emphasis is on a just transition. In other words, no one must be left behind. This has serious practical considerations, primarily, that to be a just transition, it cannot be achieved overnight. In some form or another, fossil fuels will be with us for the next 20 years or so, and the traditional markets of oil and gas, maritime engineering, logistics and services for a long time. While investments are moving from new offshore hydrocarbons to offshore and onshore renewable energy alternatives, such as wind, sun and hydrogen, offshore hydrocarbons will continue to feature during a just transition.
The SBIDZ can be a holistic base for transition technologies in energy and maritime. We have the deepest – undeveloped – port in the Southern Hemisphere, and it’s already focused on bulk carriers and has a Freeport status. Yes, the SBIDZ’s original market focus as a service hub for offshore exploration and production (E&P) vessels, such as oil rigs, would eventually have to change. However, it still provides a value chain of needs and a lifecycle orientation, including decommissioning, recycling, and retrofitting vessels and equipment in that space.
Three perspectives grabbed our attention.
• Simply unplug?
First were the perspectives on the energy transition. Despite regional differences, there were three approaches: double down and produce more fossil fuels, decarbonise operations across the board, and diversify portfolios to include renewables.
Despite the increasing attention being given to environmental, social and governance measures (ESG) and steps by international financial institutions to divert investments away from fossil fuels, these must be balanced against the rapidly increasing energy demands in the emerging nations. An abrupt stop to carbon fuels will have a devastating impact on these economies and keep them mired in poverty – hence the need for a just transition.
It was interesting to hear from the United Arab Emirates delegates that they reckoned $600 billion would need to be invested annually in the oil and gas sector to keep abreast of global demand. As Abu Dhabi National Oil Co (ADNOC) Chief Executive Sultan al-Jaber said in a media conference, the world could not “simply unplug” from hydrocarbons.
• Port infrastructure
The second was port infrastructure, a lengthy process that requires long-term investment and strategy. Within the SBIDZ development strategy, we need vertical integration across residential, commercial and industrial projects. This is the approach successfully implemented by the Dubai Maritime Centre among its suppliers and service providers on–site.
The shipyard business is highly competitive and hinges on two primary aspects: Cost and turnaround time. This puts pressure on us to keep driving the new integrated port infrastructure development as featured in the line-up of infrastructural investments at the Sustainable Infrastructure Development Symposium of South Africa (SIDSSA) 2021.
With the port’s geographic location and by increasing its logistical capacity, the SBIDZ can bring greater efficiencies across markets. In the construction and repair of ships, raw materials and supplies are a significant cost, and the SBIDZ Freeport represents a massive opportunity for cost savings.
• Manufacturing perspectives
The final perspective of interest was that of manufacturing. Substantial investments will be needed in skills development and training. Every transformation story begins with investing in the people involved, and no more so than now. Investments in new vessels are important, but we will need to change our approach. The future focus must be on investing in the research and development of smarter and cleaner operations.
The transition strategy will work through partnerships and collaboration within the industry to co-create future business models and the necessary digital infrastructure. A “smart” manufacturing approach incorporating digitalisation is not a dream of the future. It is happening now, and we need to ensure that we are part of it.
A greener maritime industry is fast becoming a reality. Offshore wind – especially in the European Union – is a technological leader in the renewable sector, with significant potential to support the growth of offshore wind as a clean energy source around the world. Several steps have been taken to encourage energy-efficient and environmentally–friendly vessels serving functions across the entire offshore-wind project lifecycle.
Workers in shipyards and related businesses are being trained and given the skills in building these new vessels. These developing renewable technologies will provide the maritime sector with many new jobs, for example, installing offshore turbines, laying the undersea cables that link them to shore and building and operating specially built vessels to service the turbines. We can – and must – be part of that.