Angolan companies need to find a way to make sure they step up their capabilities on one hand, and are given equal business opportunities on the other.

Braulio DE BRITO Executive Chairman TRADINTER

A role for everyone in Angola

July 18, 2019

TOGY talks to Braulio de Brito, chairman of the board of the Association of Service Providers of the Angolan Oil & Gas Industry (AECIPA), about how to address today’s challenges and the space that must be created for local companies to succeed. AECIPA is the leading association for oil and gas contractors in Angola.

What challenges are services providers facing in today’s market?
The major challenge is local content. Angolan companies need to find a way to make sure they step up their capabilities on one hand, and are given equal business opportunities on the other. This is issue number one. Why don’t we see more Angolan companies doing work within the oil and gas industry? Is it to do with the regulatory framework? Are there enough incentives? Or are local companies not robust enough?
We need to address all of these questions and act on the answers. This would really take the whole industry and the country to the next level. The more local companies we have, the more Angolans will be employed and the more money will be circulating within or through the Angolan economy.
There are some services where Angolans are not ready, but there are many others where Angolan companies can add value, if given the right support and the right regulation. The benefits are clear and this is something I, personally, will be battling going forward, because it is something worth working for.

What is your strategy for this, and do you have any incentives in mind?
The ministry is working on a new local content law, so I need to make sure that personally, and as AECIPA, we are part of that discussion so that, in the end, it really represents the views and the thinking within the industry. Within AECIPA, we will have our own internal discussions and bring together some ideas and items that we think must be in that law. We will go from there and make sure they become part of the regulation.
We want to see more indigenous services companies doing the more technical and challenging work. We believe there are areas of the service chain that ought to be executed solely by local companies. It’s something to look at, discuss and find a way to incentivise and implement.

What should be the role of international companies in this process?
They don’t want them to relinquish their presence in Angola, but I think their role is to be one of compromise. Yes, they need work, but so do the Angolan companies in Angola. We need to have a win-win relationship, where everyone is accommodated.
For example, if there is a maintenance contract, aspects of that contract could be allocated or subcontracted to local companies. Or the operators can say [international companies] do the high end, but the low end can be done by a local company. This is a strategy that needs to be defined by the state, via the concessionaire, the services companies and the operators.
We are not promoting an exodus of international players. We still very much need multinationals to be here and we will continue to need them for many years to come. We need them to support the training and development of the local workforce, we need them to transfer technology and we need them to help install proper and robust procedures and processes. We need to work with these multinationals, but at the same time, working with them means allowing for some of the work traditionally done by them to be done by local companies.

Which of the recent reforms are the most exciting measures for services providers?
Everyone is talking about the National Oil, Gas and Biofuels Agency, and it is one of the measures that has been a long time coming. We wanted this segregation of duties, which has now happened. This is a new beginning for the Angolan oil and gas industry, where we have the segregation of duties and responsibilities between the concessionaire, Sonangol and the ministry well established. Now it is a matter of making sure this new body takes on the responsibility of the mantle it has been assigned. What has been done needed to be done, and this is the way forward for the industry.

 

How do services companies view the incentives for E&P in marginal fields?
I think we see this as an area where we may find the major opportunities for local companies. Yes, we will still need international companies to come and work in marginal fields and onshore opportunities, but that is definitely an area where we must have big Angolan representation, be it as partners or, where possible, as fully Angolan companies doing some of the work.
If you are talking about marginal fields in terms of fields that are deepwater offshore that have done their course and are now going through lower production trends, then that is something else. We still need international companies to come and use new technology that helps squeeze out those fields.

What were the association’s main developments in 2018?
AECIPA has been a reflection of what has been happening in the oil and gas industry for the last 24 months or so. Not much has happened, as the industry was basically sitting and waiting for the oil price and the industry as a whole to stabilise, new policies in the context of Angola to be implemented and ultimately, for the new framework to be rearranged. We are also waiting for the approval of new projects in general.
AECIPA has been active in terms of continuing to engage its members and stakeholders as far as making sure the association continues to go strong, by engaging the members, organising events and [providing] general support to their businesses, as we always have. The message from our members is that they are firmly behind the organisation and they see and want the role we play as the main voice for the common issues within the sector.

How has AECIPA contributed to the Angolan oil and gas industry?
The main role and mission of AECIPA is to represent Angolan oil and gas services companies in helping them mitigate, resolve or address common issues. One way to explain is to say we are the partners of the oil and gas services companies, and also the facilitators with the major stakeholders such as the concessionaire, the Ministry of Mineral Resources and Petroleum, Ministry of Finance, Ministry of Home Affairs and so on. All of those bodies do relate to our industry in one way or the other, and we are the ones who facilitate the communications in between.
For example, a few years ago we had a massive situation with work visas not being processed in a timely manner. AECIPA got together with its members, the Ministry of Home Affairs and the Ministry of Petroleum and, in the end, we helped or even co-ordinated a solution for the issue, which eventually led to a more efficient process as we now have it.
There are many other examples where AECIPA has been credited and in fact, together with its members, has really helped major issues or questions within the industry. This is our role. Rather than having 150 companies knocking on the door of the various ministries, we bring them together and propose a way forward.

With projects coming to fruition in 2019, how can AECIPA better serve services companies?
The best way for AECIPA to continue to serve companies is to ensure good representation. So far, we have achieved that.
Generally speaking, the number of services companies in the country is about 200, and we have more than 150 members within the association. That includes all the major services companies without exception, as well as many local or indigenous Angolan companies.
Everyone sees AECIPA as the body that has been doing great things for the industry, by representing well and effectively the interests of the service companies. We bring this ability to understand and anticipate issues and promote the understanding of those issues.
For example, Angola will be implementing IVA [VAT] and we need to help our members understand the impact it will have on the sector and on their businesses. For that, we will be preparing a series of workshops where we will bring some experts to help our members make much more sense of this new regime. These are the kinds of things we will be doing going forward.
With the announcement of the new National Oil and Gas Agency, we expect to also have meetings, conferences or workshops for us, the service companies, to discuss the way forward for our sector and industry.

What are AECIPA’s key objectives for 2019?
The local content law will be our key objective.
Another one is to continue to maintain AECIPA as this body of interaction and support within the oil and gas industry. Our goal will be to continue to be seen as the go-between and the organisation everybody – the ministries, members, government, the agency, everyone – really trusts. We are here as partners and we are here to work together and ensure we achieve good things together for the good of Angola and the good of the Angolan oil and gas industry.

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