South African oil industry on course to meet black ownership targets

Mar 10, 2004 01:00 AM

Just more than 17 % of ownership of South Africa's oil industry has been transferred to a wide range of empowerment companies since the signing of the petroleum charter two years ago, it emerged at the Oil Africa Conference. This means the industry is close to meeting the charter's targets, which call for 25 % empowerment ownership by 2010.
Sandile Nogxina, director general of the minerals and energy department, told delegates that a recent survey conducted by his ministry showed that all but one of the major oil companies and all members of the South African Petroleum Industries Association had entered into equity share deals.

Although this was positive, the equity issue had been emphasised to the point where it was perceived that equity compliance automatically meant compliance with the charter. Transformation would be achieved only if all the requirements of the charter were met, said Nogxina. He warned that the department would be driving employment equity issues hard, "holding industry to make good their commitments to their targets". An empowerment evaluation committee had been established to monitor progress.
He said the "echelons of power" within companies were still predominantly white, expatriate and male. His department was drafting a human resources plan to close the country's skills gaps.

Oil companies had been set a target of awarding 25 % of their procurement contracts to small companies, especially those owned by historically disadvantaged South Africans, by 2010. They had achieved only about 4 % of this target so far. Nogxina said government would closely monitor the development of the Western Cape oil-services hub which is aimed at capitalising on the burgeoning 10 bn-a-year west African oil market with regard to economic empowerment.
"We want key parameters like equity, human resources development, technology transfer, affirmative procurement to be pursued vigorously."

Government, while fully committed to the initiative, expected to see maximum use made of local content, both material and labour, to "ensure that the maximum benefit accrues to South Africa and Africa broadly". Saleem Mowzer, head of Cape Town's trading services, said although the initiative was in its infancy, it was beginning to play an important role in realising the vision of the New Partnership for Africa's Development.
Cape Town had the largest and most industrialised port on the African west coast and, together with Saldanha 's development potential, offered the business environment, political stability and world-class infrastructure to host a service and supply hub to the offshore oil and gas industry. Mowzer said that there were opportunities in the refurbishment of production vessels to support oil and gas exploration and production.

Economic impact studies indicated that between 2003 and 2008, the industry would create 11,000 jobs and increase the province's economic growth about 25 % a year.

Source: Business Day
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