The Canary Islands may be the new Aberdeen of the Mid-Atlantic

12/9/2015

LAS PALMAS, Canary Islands -- Years ago, high oil prices began an influx of interest in the less explored basins in sub-Saharan Africa, which led to new exploration efforts in a number of places with great potential to substantially increase production, and regional exports were discovered in countries such as Nigeria, Mozambique or Angola.

With geological similarities to marine sedimentary basins in Brazil, the potential of "pre-salt" reserves of West Africa have gained increasing interest for exploration, and the oldest oil rigs in use in the waters of Brazil and the Gulf of Mexico have moved to this region. Currently there are about 100 oil rigs carrying oil and gas production in the Gulf of Guinea.

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Port of Las Palmas, The Canary Islands.

These drill ships began arriving at the Canary Islands in 2002, and the first repair projects takes place in the port of Las Palmas. From that moment, the offshore fleet has been coming to this dock to demand technical services and supplies, while local companies have increasingly specialized in the assistance of their large ships.

In recent years, the port of Las Palmas, now with high technical capabilities in the sector, has reached the limits of space available for the offshore market. The port of Santa Cruz de Tenerife has also begun to receive oil rigs and is currently working in the construction of a new shipyard for 2016. Meanwhile, the port of Las Palmas performs important infrastructure projects to win new concessions. In addition, in the last couple of years, some world leading equipment manufacturers have decided to open new service centers and set commercial agreements with local shipyards in the Port of Las Palmas. It is remarkable the increasing growth of the offshore service market in the Islands, the closest European territory to West Africa.

Growing demand

The Canary Islands is working to further position itself as the most competitive alternative to operate in West Africa, especially in a context of crisis due to low oil prices. To this end, it has promoted several strategic projects and advantageous tax incentives that are allowing their ports to become a highly competitive alternatives for international oil companies operating in Africa, who want to avoid long journeys for repair and maintain on their platforms, going to a specialized and certificated center strategically located in the coast of West Africa.

In terms of certification policy of the sector, since 2006 it has accumulated outstanding results with more than 80 participating organizations; 220 certifications in Quality, Environment, Occupational Safety, Food Safety, R&D, according to ISO 9001, ISO 14001, OHSAS 18001, ISO 22000, 166002. In addition, there are more than 900 courses, which translates into 7,169 trained employees in quality, environment, occupational safety, and innovation management.

Oil and gas giants Chevron, Petrobras, Total, Seadrill, Transocean, Odebrecht, Diamond Offshore Drilling, Ocean Rig and Cols are just some of the companies who have trusted in the highly competitive services of operators like Zamakona Yards, Astican, Hidramar, Tenerife Shipyards, RNT Canary Feed Repair or Atlantic Ship Diving to repair many of their oil rigs in recent years.

Business with locals

The area is also attractive for companies who want to establish their base of operations to offer repair services, maintenance and supply under the lowest tax system in Europe (4%), which allow them to optimize their investment to the fullest, in addition to establishing partnerships with other local and international companies with cutting-edge technology and expertise. Such is the case of international companies Rolls Royce Marine (UK), Subsea Masters (UK), Hyundai (KR) and Otech (NO), which have foreseen the market potential and have established operations on the islands. They have found a safe strategic logistic location, where supplies can arrive in a day, in combination with lower prices, and with local suppliers, partners and workforce within the European standards.

Recent examples of new investments and collaboration between local suppliers and international companies mean a qualitative shift for the Canary Islands-based shipyards.

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