While the excitement and glamour of oil and gas production centres around the wells themselves, nothing would ever get done without the support of experienced service providers.
Elsewhere in this publication there is an account of what the South African Oil and Gas Association (SAOGA) is doing to coordinate and encourage South African based businesses to be part of the overall development of Africa’s oil and gas industries.
Here is a perfect example of what can be achieved by a business that has no interest or involvement with engineering or manufacturing and yet is still making money from oil and gas.
Sturrock Shipping has been around for almost half a century. It’s not a shipping company as the name might suggest but rather a ship’s agency plus forwarding and logistics company. It’s the type of business you go to when you want someone to take responsibility for the full supply-chain of services related to sea transportation or the import and export of goods into and out of Africa. It does have links with the actual shipping process – its BEE (black economic empowerment) partner is Calulo who is involved in ship chartering around the African coast as well as bunker brokering, but Sturrock is essentially a facilitator – it gets things done on behalf of others.
“We specialise in the oil tanker sector,” says ships agency director Clive James. “As such, there are very few of the larger names in oil that we don’t service with freight forwarding, landside logistics and a whole gamut of vessel and cargo requirements.”
For many years, during the apartheid era, Sturrock’s expansion plans were hamstrung by poor relations between South Africa and the rest of the continent. However, when the ANC government came to power and sanctions fell away, Sturrock had the green light to start its expansion plans.
The first office was opened in Mombasa with Dar es Salaam following later, both bringing Sturrock into contact with a whole new range of clients, particularly in oil related businesses. “We decided to start on the east coast,” says James, “as there we shared the English language – something which would make life just a little easier while adapting to a new set of conditions and business habits.”
It’s an easy trap for Europeans and Americans to fall into thinking that Africa is all the same. “The common features,” admits James, “are the high incidence of bureaucracy and the generally poor state of the infrastructure, but in each case, the fine print is different.”
It wasn’t until they had gathered considerable experience in English speaking zones that they ventured south a little and opened two offices in Mozambique. “We’re neighbouring countries,” says James, “but the fact that business is conducted in Portuguese creates a considerable gulf.”
Now though, the network is extensive: eight offices throughout South Africa, three in Mozambique, three in Tanzania, five in Madagascar, plus offices in Angola, Kenya, Ghana and Sudan. “We try to understand local conditions and not be Eurocentric,” says James. “Instead, we try to find good partners to deal with who share our ideals of good service through reliability and then tailor a modus operandi around the specific conditions in each country.”
Having someone reliable is exactly what clients want. Many of the above branches have been created at the behest of customers tired of sloppy service from agents working for their own best interests and not the client’s. “Everything about the way Africa operates is improving,” says James, “the roads, phone system, broadband speeds and even bureaucracy. It means the barriers to entry are coming down and competition is increasing. But it’s not always improving fast enough for some of our clients based in Asia, Europe or the US. They have little tolerance for a lack of punctuality, promises that aren’t kept and poor quality work. While we adhere to our own ever improving quality standard, we strive to remain ahead of the pack.”
The services provided by all ship’s agents are similar, if not identical, so Sturrock places the emphasis not on what is done but rather how it is done. “It’s all about relationships,” says James. “First we need to work closely with the appropriate authorities to make sure we understand what they want. Here it helps for us to partner with strong local firms which have demonstrated a high level of capability. Their inside knowledge and our broader experience when combined becomes a potent force.”
Sturrock then works on the basis that the most corrosive element for good client relationships is poor communication. “The first thing that takes new clients by surprise is that we show them it is possible to have an answer within minutes rather than the hours or days that might previously have been their experience.”
Another point of difference Sturrock claims in its favour is the extent of its health, safety, environmental and quality management systems. SHEQ has traditionally not featured too prominently on the radar of many African countries, but as a result of Sturrock’s long track record dealing with the oil majors it has become a serious and necessary focus of its business today.
“All the most important oil companies,” says James, “are fully aware of their social, health and environmental responsibilities and want their agents to be equally prepared and like-minded in their approach to these non-negotiable aspects of the business. Of course, every effort is made to avoid environmental damage but should something untoward occur, clients need to know that we are ready to deal with any situation. Sturrock has been ISO certified since 1996 and has experienced teams that it can deploy to assist with incidents at short notice.
The amount of investment taking place in African oil and gas production is making the region an attractive target for some of the largest international agency names. But Sturrock remains confident that its focus on an African presence has numerous benefits for potential new clients. “We can demonstrate,” says James, “that the service we offer is equal to anywhere in the industrialised world but with a true understanding of what it is like to do business in Africa. And for multinational clients, we promise a consistent way of working regardless of the location.”
Written by Alan Swaby, research by James Boyle