Offshore services impacted by decrease in ships' traffic

OPL operators voice concern at situation

SOUTH AFRICA: Despite the continued crisis in the Red Sea, there has been a downturn in ships’ traffic coming around the Cape that is impacting on offshore services such as Off Port Limits (OPL) operations.

“We’ve seen a rather curious downturn,” says Godfrey Needham, General Manager of Offshore Maritime Services (OMS) and Vice Chair of the Off Port Limits Association South Africa (OPLASA). And there is a general consensus amongst OPLASA members that business has tapered off along the entire coastline.

Andrew Hendrikse, Chair of OPLASA and Executive Director at OSC Offshore Marine, notes that this is likely attributable to several factors including the severe weather conditions experienced over the last few months; the closure of the offshore bunkering operations as well as factors such as increased levies for certain operations.

OPLASA is concerned that the lack of certainty regarding the resumption of offshore bunkering operations in South Africa will continue to weaken the country’s position as a global OPL destination.

“We have seen a significant uptick of bunkering activity in Namibia, Mozambique and Mauritius,” says Needham, explaining why vessels are choosing to stop in Mozambique and Namibia for OPL services.

“It appears that offshore bunkering is now a big drawcard in these ports, and they are attracting clients away from us,” he adds.  

The industry had remained hopeful that offshore bunkering would resume following a roundtable hosted by the South African Maritime Safety Authority (SAMSA) at the end of April where then Acting CEO, Tau Morwe, announced that there was nothing preventing operators from conducting operations and that “by next week or in the coming week, there is a company that will most probably continue to do business”.

Now, some five months later, South Africa’s offshore bunkering operations in Algoa Bay have yet to resume and the industry has been asked to weigh in on new legislation for the sector by the South African Revenue Services (SARS).

According to some sources, however, there is some movement in this regard with the authority requesting information about the availability of bunker barges from industry.

But, it has been over a year since the Algoa Bay operations were abruptly disrupted by SARS, and South Africa will have to work hard to convince the market to return given this history.

A challenging environment

Voicing his concern over the country’s ability to reclaim its market share, Needham expands further on some of the challenges currently facing the OPL sector.

“We need to offer a competitive destination for ships to choose us, and identify what is driving business away,” he says.

OPLASA has also recognised the negative impact of some SAMSA levies which are applied unrealistically. Recent trips to collect and land oil samples, for example, have been saddled with a full oil delivery levy of $15,000. Given the low daily rates being charged by medium sized bulkers, these fees will deter shippers from landing samples locally for analysis.

This, of course, has a direct impact on not only the OPL operators, but also the laboratories offering analysis as well as other indirect services within the value chain.

“We did protest the application of the fee,” says Needham, who confirms that other similar fees and levies have been instituted over the years that have hamstrung the sector. 

Given the noticeable downturn in OPL call-outs over the last few months, operators are actively seeking to engage with government and other stakeholders to work to recoup some of the gains that were achieved in the wake of the establishment of the offshore bunkering activities.

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