How Will Oil Price Drop Influence Namibia’s Ship Repair Industry?
Namibia’s ship repair industry serving the offshore sector is bracing for impact amid drop in oil prices that has significantly cut rig utilization in the region.
Burgeoning West African offshore oil and gas industry has had a significant impact on Namibia, and specifically Walvis Bay.
Between Africa’s top two oil producing countries Nigeria and Angola, placed 13th and 15th as global oil producers respectively, there are currently about 322 offshore support vessels and 68 oil rigs. On average for each oil rig operating, up to 6 support vessels are required.
According to Hannes Uys, CEO of ship repair company Elgin Brown & Hamer (EBH) Namibia, oil price drop has seen a reduction in the utilisation rates of rigs and OSV’s by 11% and 8 % respectively.
“For Namibia and its ship repair industry, there are very real risks in the wake of the current economic crisis which oil producing countries find themselves in, as a result of the sustained low price of crude oil. The questions remain, how serious are these risks, and how do we, as a country and an industry, safeguard ourselves against them?”
Uys urged those in the ship repair industry not to be complacent, and to join forces against a common threat.
“We need to entrench, on a wider scale, a culture of high-performance and discipline, and in order to do this, we have to become more efficient, even aggressively so,” he said.
“This is undoubtedly a crisis period. It is imperative that our affected clients, including the offshore supply vessel (OSV) owners, feel that the industry is being backed by our government and other industry stakeholders, and that we are seen to be taking serious, urgent and significant steps to accommodate them over this 24 month period,” Uys adds.