for Operators, Contractors
Pigging tutorials and annual seminar
15th/16th November 2016
PIGGING PRODUCTS &
Commissioning and Operational
Pipeline Pigging Seminar
Guitunga: The oil and gas sector is relatively new for Mozambican
companies, illustrated by the lack of local manufacturing. Local companies will initially rely on foreign suppliers for the equipment and
the technology necessary to become a local supplier. There is a vital
necessity for the private sector, as well as government agencies, to
obtain the appropriate technology and equipment to qualify as service
providers. For the next five years, opportunities will be related to the
construction of both Anadarko’s LNG and Eni’s FLNG projects. There
will be a demand for compressors, pumps, vessels, filters, transformers, wire and cable, pipeline systems, and welding equipment.
DoC: What are the gaps in the local offshore oil and gas market
that could be filled by foreign operators and technology providers?
Guitunga: Mozambique is an emerging market striving to adopt international business standards. Companies, especially small and medium-sized firms (SMEs), also face challenges to adopting these global business standards. There is a need for expertise, project funding,
and products in almost every sector. This is especially true for SME
equipment suppliers. As the country brings its newfound natural gas
resources to global markets, it will need investment and technology
transfer from foreign entities in every aspect of drilling, liquefaction,
distribution, marketing, and selling this resource to world markets.
DoC: What are the financing conditions for local buyers?
Guitunga: It can be hard for local companies to access credit. The
appreciation of the US dollar and limits on taking money out of country create more difficulty. American companies that provide credit
solutions are competitive. US financing agencies, US Export-Import
Bank and Overseas Private Investment Corp., can also support US
exporters. Both agencies have an interest in working in Mozambique.
DoC: What are the benefits of doing business in Mozambique?
Guitunga: The natural gas discoveries are immense and the quality is good. There are additional oil and gas exploration projects that
are expected to identify additional reserves. So for the oil and gas
industry, Mozambique is likely a long-term source of projects. Its
location on the eastern coast of Africa is expected to make it a strategic supplier to emerging markets in India and the Far East where
demand is expected to grow for oil and gas.
DoC: How receptive is the country to American products and services? What other countries trade and invest in Mozambique?
Guitunga: Mozambicans are very receptive to US-branded products/services and perceive them to be of high quality. Buyers of consumer products as well as equipment resellers are pleased to see additional US brands coming into the market. As a former Portuguese
colony, Mozambique has strong cultural and trade ties to Portugal
and the European Union as well to Brazil, a dominant investor country with a common language. China has provided foreign assistance
and is involved in many infrastructure projects. In the oil and gas
sector, European firms Eni (Italy), Shell (Netherlands), and Statoil
(Nor way) have a presence. ExxonMobil recently won three areas for
research and exploration concession contracts and Anadarko is about
to develop one of the world’s largest LNG projects. More US companies are expected to enter the market as opportunities develop.
DoC: Have there been recent successes of other American companies in Mozambique?
Guitunga: Yes. GE is a recent success story. They established
an office in Maputo and are successfully pursuing business in the
oil and gas as well as transportation fields. Other successful US exporters include Caterpillar, Coca-Cola, NCR, Radisson, Hertz, Fluor,
FedEx, UPS, ExxonMobil, Cargill, Proctor & Gamble, and more.
DoC: What should US exporters know about doing business in
Mozambique? Should only experienced exporters consider it as a
Guitunga: The country is still an emerging economy with challenges that are common in many developing markets. Projects usually take time to develop and there are substantial risks that go along
with the potential for substantial rewards. Experienced exporters
will definitely have an advantage.
DoC: Do American companies have to find local partners in order
to pursue business in Mozambique?
Guitunga: While Mozambique law does not as a general rule require foreign companies to have a local partner, it is preferred by most
US companies doing business there. Foreign companies must comply
with quotas for hiring local employees and purchasing content from
local suppliers. Additionally, a local company can help their US partner with customs issues and market research. As in other markets,
US companies will find that relying on Mozambican partners to import, sell, and service their equipment can be a wise entry strategy.
DoC: How can US exporters identify and pursue business opportunities related to the natural gas discovery?
Guitunga: The US Commercial Service Mozambique provides assistance to US exporters who are interested in entering the market.
Another way to pursue opportunities in Mozambique would be to
look for supply chain opportunities through US companies already
doing business there. Examples include Anadarko, a key operator
in the Rovuma basin, and Chicago Bridge & Iron, one of the EPC
contractors of the LNG project. •