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Mthombo csdp presentation to rythmic meeting may 10

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  • 1. MTHOMBO Competitive Supplier Development Programme Prepared by: Sesakho Magadla Date: 20 - 05 - 2010 The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 2. PRESENTATION OUTLINE• CSDP Objectives• CSDP/BBBEE• Mthombo Programme Objectives• PetroSA CSDP Plans• Main Programme Constraints• Mthombo CSDP Opportunities• Early Intervention Opportunities• Programme Milestone Schedule• Funding Options The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 3. CSDP OBJECTIVES To develop local suppliers to be able to procure goods and services in such a way as to increase the competitiveness, capacity and capability of the local supply base To ensure that these local suppliers are locally and globally competitive To contribute to the Government’s initiatives ( e.g., ASGISA, JIPSA, etc.) of increasing economic growth, employment creation, skills development, and implementation of BBBEE The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 4. Mthombo Project BACKGROUND• Building of 360 000 barrels per day crude refinery identified for Coega.• Conceptual stage is complete.• Feasibility is complete• Project undergoing approval process for continuation to the next stage The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 5. Mthombo Programme Objectives• To ascertain the preparedness of the South African Industry readiness to participate in Umthombo Construction.• To facilitate industry readiness through Competitive Supplier Development Programme.• To secure funding for Umthombo CSDP initiatives• To ensure that a minimum of 30% expenditure for CSDP is achievable• To mentor and coach CSDP participants• To monitor and control the CSDP initiatives against Umthombo objectives The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 6. Main Programme Constraints• Time All initiatives must not be in conflict with the project schedules. The minimum requirement is that the benefits for the initiatives must be realised in Engineering Procurement and Construction (EPC) phase of Umthombo• Enterprise Development Funding Collaboration with relevant stakeholders will be critical in ensuring that funding is secured• Market Assessment of Existing Suppliers Access to relevant and accurate information about supplier capabilities and capacity.• Market Analysis for New Entrants Facilitate collaboration with Original Equipment Manufacturer The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 7. Mthombo CSDP Opportunities Cost element Cost ElementItem Contribution 1 Equipment Furnaces 5.48% 2 Equipment Exchangers 5.04% 3 Equipment Pressure Vessels 11.42% 4 Equipment Rotating - Pumps 3.56% 5 Equipment Roating - Compre/Turbine 4.70% 6 Equipment - special 4.15% 7 Equipment - Solid processing 1.82% 8 Equipment - Utility 2.22% 9 Piping System 13.14% 10 Structural Steel 8.85% 11 Electrical 15.60% 12 Instrumentation & Control System 9.20% 13 Cons Fire proofing 0.43% 14 Cons Coating 4.54% 15 Cons Chemical & Catalyst 0.00% 16 Cons Mobile Equipment 1.29% 17 Cons Subcontractor civil 8.58% The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 8. Early Intervention Opportunities• Bulk materials needed for site development• Opportunities for strategic early purchase of components (e. g. Tank plate) from RSA manufacturers• Maintenance support local to Refinery• Crude loading / storage and product loading / storage.• Facilities outside the Refinery fence - Opportunity for Equity BOO/BOT Partners – both foreign and RSA/BBBEE• Transportation of Material and Equipment - Logistics• Medical, Security and Accommodation services• Power, Water & Fuels supply• Waste removal• Batch plant for concrete• Formwork• Scaffolding• Construction yard / stores administration• Communications The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 9. Programme Milestones SchedulePreparatory ActionsCSDP TeamKey Stakeholder EngagementMOU Agreements DraftRoad showsRules of Engagement Early Initiatives OEM (Initiative Specific Business Plan) Technical Assessment Fund Establishment Developmental Agreements Developmental initiatives Roll Out Successful CSDP participants benefit from Umthombo Pre-Feed Feed Engineering Procurement & Construction Project Close-Out The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 10. Who can Benefit from Mthombo CSDP?• Any legally registered existing South African Supplier that is offering services/materials that may be required by the project.• Existing suppliers with required capacity and capability but are not compliant to BBBEE and that requires support in structuring a BBBEE deal.• Existing suppliers that intend to expand capability/capacity to match project requirements and future demand.• New global suppliers that intend to establish a South African presence and also be compliant to BBBEE The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 11. How can you support Mthombo?• Sharing of supplier databases• Sharing lessons learnt from other similar programmes• Governance (Conflict of interest disclosure)• Funding• Collaboration with Industry Association• Collaboration with with industry communication The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07
  • 12. The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07

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