Rigzone looks at the progress of the SOGA (skills for oil and gas Africa) project, a European government effort designed to help East Africa's oil and gas sector.
A European government scheme designed to help East Africa’s oil and gas sector will see its first trainees gain jobs next year, a Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmBH representative told Rigzone.
“The program framework, partnerships and teams have been set up. We anticipate the first people in jobs in 2017,” said GIZ’s Program Director Sonja Palm in a statement to Rigzone, before warning that this timeframe also depends on the investment decisions of global companies operating in the region.
The Skills for Oil and Gas Africa (SOGA) project, established in November 2015, is a partnership between the UK’s Department for International Development (DFID) and the German Ministry for Economic Cooperation and Development (BMZ) to design an initiative “that will equip local populations with skills needed to seize job opportunities in the oil and gas sector in East Africa”, according to a statement by the British High Commission Nairobi in November 2015. DFID echoed Palm’s sentiment that the SOGA project is making headway, stating in its online development tracker that $6.96 million (GBP 4.85 million) has already been spent on the initiative from UK Aid’s $35.91 million (GBP 25 million) contribution.
Focusing on Kenya, Uganda, Tanzania and Mozambique, which are estimated to hold a combined resource of billions of barrels of oil and trillions of cubic feet of gas, SOGA will work closely with the private sector and government to deliver support to training institutions. In return, this will help local people win contracts to supply goods and services to the oil and gas industry.
Uganda and Kenya expect commercial production to start in 2017 and 2018, respectively, and both Tanzania and Mozambique are moving rapidly towards commercializing their offshore gas through the construction of gas liquefaction and export facilities, according to DFID’s business case report on SOGA. As such, the report suggests that there is a significant and immediate demand for skilled workers in these four countries. In an effort to meet some of this demand, the report outlines that SOGA is aiming to get around 32,000 East African residents into sustainable work over the course of the project, which is scheduled for completion by 2020, especially in regions most likely to be affected by resource extraction, such as rural areas in the North of Mozambique, Lamu and Turkana in Kenya, Lake Albert region in Uganda and the deep South in Tanzania. Of these 32,000 workers, at least 35 percent are expected to be women and 40 percent will be young people between the ages of 15 and 24.
SOGA has challenged itself to train the local population to enter a variety of positions in the oil and gas sector, with the report highlighting that jobs related to well, seismic and infield services, front end engineering design, rig hire, field construction, welding and electronics are all within reach of East African residents.
SOGA 2016 and Beyond
As of March 2016, all international oil and gas companies that are active in SOGA countries are collaborating with the program, GIZ’s Palm told Rigzone. Total S.A and Tullow Oil plc are cooperating on SME development in Uganda and Uganda and Kenya, respectively; ENI S.p.A, Royal Dutch Shell plc and Anadarko Petroleum Corporation are working on skills development in Mozambique; and BG Group plc and the LNG Joint Venture group are cooperating to better employment opportunities in Tanzania. All these companies provide resources at country level and are part of SOGA’s local governing boards. Additionally, BG Group is providing funds at global level, which has elevated the company to SOGA’s global governing board.
“International oil and gas companies are important strategic players” in the SOGA project, despite the fact that they only employ “a very small amount of people,” Palm said.
At the end of January, BG Group announced that it was investing $1.45 million over the next five years in the SOGA venture in order to help equip people living in East Africa with the skills needed to secure job opportunities in the emerging hydrocarbon hub. The energy firm has been operating in Tanzania and Kenya since 2010 and 2011, respectively.
SOGA “provides the opportunity for scale, leveraged funding and additional technical expertise that no single partner can provide on its own,” said BG Group’s Head of Social Performance Ramanie Kunanayagam, who emphasized the firm’s support for the initiative in a January company statement.
Commodity Impact on Skills for Oil, Gas Africa
Although SOGA is currently making real progress on its aim to help East African locals secure work in the oil and gas industry, commodity prices will undoubtedly play a part on the time-frame of actual job allocation. It’s unclear if the project will hit its target of getting 32,000 East Africans into work by 2020, but even if the project does achieve its goal, certain factions of the hydrocarbon sector believe it won’t be enough to address the wider unemployment issues affecting East Africa.
“Clearly there is a skills gap within East Africa as most of the discoveries are relatively recent. Any initiative to raise numbers is clearly important, though as a job creation driver in the different economies, oil and gas even at its peak will only play a marginal role in solving the unemployment problem,” Standard Investment Bank Research Oil & Gas Analyst Eric Musau told Rigzone.
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