Marine Engineering Workshop. A Ship Repair perspective on challenges and Industry growth

Transcription

1 Marine Engineering Workshop A Ship Repair perspective on challenges and Industry growth

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3 South Africa is positioned strategically along the international shipping routes

4 Recent oil & gas exploration in and around South Africa could drive growth Source: Infield Systems Ltd. 2013

5 Market segmentation TRADITIONAL Cargo / Tanker / Container Construction / Dredgers Crew / Supply Fishing Casualties Naval TNPA Vessels Diverted Vessels EMERGING/GROWTH Oil & Gas Rigs / OSV s

6 Reasons for calling a specific port Reasons: Collection and delivery of goods Resupply Construction contracts / port development Repair The decision to repair is based on a combination of: Locality of the port Necessity of the repair Cost of the potential diversion Cost of the repair work Duration of the repair work

7 Vessel Category Cargo / Tanker / Container Key Notes -Largest market -Smaller vessels in this category are being replaced by larger vessels, but fewer large vessel are required to move larger quantities of goods - Preference to repair in Asia due to cheaper rates -Vessels unlikely to repair outside of charter route, except in emergencies Construction / Dredgers Crew / Supply Fishing O&G Rigs / OSV s Casualties Naval TNPA Vessels Diverted Vessels -Limited activity due to lack of port developments -Limited activity - Limited activity - Highest growth area due to exploration activity - Infrequent activity - Limited activity - Consistent activity - Limited activity as diversions are dependent of availability of other docks

8 Growth Forecast by Category Forecasted Ave. % Growth for period Vessel Category Next 3 Years Year 4 & 5 Year 6 Comments Cargo / Tanker /Container 2% 2% 2% Construction / Dredgers 1% 1% 1% The cargo/tanker/container market is forecast to grow very slowly over the next number of years Excessive growth at the top end would depend on an increase in port capacity which would require significant investment Growth in this segment would require extensive port developments on the East Coast of Africa which would only materialise with significant foreign investment Crew / Supply 2% 2% 2% Slow and steady growth predicted Fishing 1% 1% 1% This market may remain static O&G Rigs / OSV s 10% 16% 15% The further exploration and the proximity of drill ships/ floating rigs would have a direct impact on the growth in this market Other 6% 6% 6% Growth in the remaining could be steady

9 To give you an idea... East African Oil & Gas Exploration and Market Development

10 Development Plan Mozambique Anadarko have announced that they have sold ⅔ of the potential production to client in Asia Source: Cove-Energy.com

11 Demand for OSV s will be driven by the need for Drillships / Rigs / Subsea Structures

12 Where is the demand? 5 6 Golden Triangle will still drive the lion's share of ultra-deepwater rig demand growth over the next couple years. This rig demand forecast slide from Pareto lays out their view of how ultra-deepwater demand will progress through

13 Current Rig Activity East Africa Rig Client Area Duration of Contract Belford Dolphin Anadarko Rovuma - Mozambique N/A Saipem ENI Rovuma Mozambique En Route 19 Feb ENSCO 5001 Petro SA South Africa N/A Discoverer Americas Statoil Tanzania N/A Deepsea Metro I BG / Odfjell Kenya N/A This activity is on par with the peak of activity during 2013/2014 and does not indicate any significant increase in exploration activity

14 Emerging/ Growth Market Oil & Gas

15 Key Areas of Focus Mozambique South Africa Tanzania Madagascar Kenya Most developed / promising fields Locality Focused drive to compete with Mozambique Increased activity / appetite for export Mixed exploration success

16 Key Drivers Exploration Continued / increased exploration of existing concessions Exploration of new concessions in Mozambique, South Africa, Tanzania, Kenya, Madagascar Field Development Field establishment to enable onshore production Higher demand for subsea structures once field is developed and stable Types of vessels: Seismic vessels, Drillships, OSV, Crew Vessels, Security Vessels, etc. Types of vessels: Dredgers, Pipe layers, Drillships, OSV, Well Intervention Vessels, Rigs, Crew Vessels, Security Vessels, etc.

17 Growth Milestones Exploration Further exploration in Rovuma basin only 2 areas out of 6 have been actively explored Opening of bidding for the second round of concessions in Mozambique Increased Exploration of African East Coast Significant reserves off South Africa coast Field Development Establishment of the Palma Plant Export of gas from the Palma plant Expansion of the Palma plant Introduction of subsea structures Introduction of well intervention vessels Establishment of operations offices by fleet management companies in Mozambique Signification foreign investment (port developments etc.)

18 Summary & Conclusion The traditional market should see very little growth over the next 3 to 5 years. The development of the African East Coast Oil & Gas field is growing steadily, but without a significant step change, activity levels will remain the same as in 2013 and Only once the construction of the onshore facility in Palma begins in earnest will there be significant, but short term, growth.

19 Gearing up for the future

20 Forecasted Total Market - East Africa The current position Number of individual vessels calling East African ports Segment Cargo / Tanker / Container Construction / Dredgers Crew / Supply Fishing O&G Drillships / OSV's Other Est 2014 Vessels % Growth 5.00% 1.00% 2.00% 1.00% 9.00% 6.00% Vessels % Growth 5.00% 1.00% 1.00% 1.00% 9.00% 6.00% Vessels % Growth 5.00% 1.00% 2.00% 1.00% 16.00% 6.00% Vessels

21 In TNPA Graving Dock Actual Number of Vessels Docked 27 % Double Dockings 60% * Double dockings were restricted from July 2014 due to caisson failure Docking Occurances 17 EBH ELDOCK Actual Number of Vessels Docked 43 * Docking of 8 fishing vessels will be counted as one double docking going forward % Double Dockings 30% Actual (In 2013, 9 dockings out of 27 occurances were double) Docking Occurances 27 OTHER Estimated number of vessels docked with SA Shipyards 8-10 TOTAL VESSELS DOCKED IN DURBAN * Figures based on EBH South Africa records, TNPA dock line-up for 2013 and assumed figure for SA Shipyards

22 Potential Dockings Forecasted Docking Potential Total Market Segment Cargo / Tanker / Container Construction / Dredgers Crew / Supply Fishing O&G Rigs / OSV's Other Est 2014 Dockings % Growth 2.00% 1.00% 2.00% 1.00% 9.00% 6.00% Dockings % Growth 2.00% 1.00% 2.00% 1.00% 9.00% 6.00% Dockings % Growth 2.00% 1.00% 2.00% 1.00% 9.00% 6.00% Dockings

23 Assumptions Assumptions No of days in a year 365 Average duration of docking 10 Maximum number of docking occurances 36 TNPA Graving Dock Capacity Estimated % Utilisation 80% Estimated % Double Dockings 85% Maximum capacity (36 occurances x 80%)* 185% 55 EBH ELDOCK Estimated % Utilisation 75% Estimated % Double Dockings 30% Maximum capacity (36 occurances x 75%)* 130% 35

24 Facility Capacity Potential Facility Capacity Facility Graving Dock (TNPA) Floating Dock (TNPA) Floating Dock (Dormac) Floating Dock (EBH) Floating Dock (SAS) Yard Durban Durban Durban Durban Durban ELSY Graving Dock (EBH - EL) Est % Operational % % 0.00% % % % Total % Operational % % 30.00% % % % Total % Operational % % % % % % Total

25 What must the TNPA do to enable the growth of the ship repair industry?

26 Short term Specifically in the Port of Durban Complete the maintenance projects on an urgent basis Dock gate repairs (7 months) Crane repairs Floating dock repairs (5 years) General maintenance and upkeep Revise procurement process for outsourcing of these repairs Current process is slow in the extreme and frustrates both the TNPA personnel responsible for running the docks and the ship repairers

27 Short term (Cont.) Specifically in the Port of Durban Revise how docking and undocking procedures are undertaken Current docking/undocking is far to slow due to restrictions on overtime hours etc. International procedures, if applied, would achieve up to 20% more dock capacity without capital expenditure The ship repair industry is more than willing to assist with implementing this change Port service, i.e. tugs and pilots, for docking and undocking of vessels needs to be given greater priority This service is causing major problems for clients using the dock Review docking charges South African docking charges are amongst the highest in the world and deter many ship owners from docking in South African ports The charges are high due to a structural problem in respect of the docks / ship repair industry

28 Short term (Cont.) Specifically in the Port of Durban Addressing the aforementioned issues can result in an immediate increase in the capacity of the industry in terms of available dock space i.e. Additional dockings in the TNPA Graving Dock could increase by up to 12 dockings per annum i.e. TNPA Floating Dock (out of commission for approximately 5 years) could dock up to 25 vessels per annum. Instead over 100 potential dockings have been lost This increases the potential number of vessels that can be docked by 35%

29 Long term TNPA has to define its role in the industry Does it want to be the major supplier of facilities for the industry? Does it want to open the options of ship repairers to invest in those type of facilities? (This has been done in the past but on an adhoc basis with no clear guidelines) Clarity on the above issues must be obtained if the industry is to be able to expand to meet its potential

30 The current situation All land is under the control of the TNPA Generally permission to expand existing facilities or put in new facilities has not been forthcoming Where permission is granted amended lease periods are limited to 5 year and this precludes significant investment Most of the facilities needed to undertake ship repair are under the control of the TNPA which makes it difficult for ship repair companies to make significant investment in the industry the key facilities needed for the business are not in their control Future developments in ports

31 What role must the industry play to achieve growth and expansion?

32 Industry s role Liaison between the TNPA and the ship repair industry needs to take place in respect of provision for space to be allocated for the industry in any new port developments i.e. In the proposed new dig out port there has been no provision for space for ship repair The ship repair industry needs to keep the TNPA informed of its view in respect of the market and the likely changes which will impact on the required facilities Timing is key as sometimes the market changes quickly and the window of opportunity to service the market is short and may disappear if appropriate and fast reaction is absent (i.e. Walvis Bay) Perhaps the most important is that the industry is given very clear parameters by the TNPA in respect of the role it will be playing in the future which will enable the industry to clearly make long term decisions to maximise its future potential and growth

33 Richards Bay

34 Creating an effective working model

35 2005 Port of Walvis Bay in 2005

36 2007 Port of Walvis Bay in 2007

37 2009 Port of Walvis Bay in 2009

38 Port of Walvis Bay today

39 Port of Walvis Bay today

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41 Summary EBH Namibia was first aimed at meeting the demand of the fishing industry, but soon became a facility of choice for the West African Oil & Gas sector The Oil & Gas sector on the West African coast is roughly 10 times the size of the East African coast and developed over a period of 30 years In 2014 Walvis Bay will be docking approximately 90 vessel on the 3 floating docks The operation has created direct jobs and countless more indirect jobs

42 Thank you