Developing Oil Services Industry In Gran Canaria

By Todd Michael Heater. January 2014.

Oil Money Without Drilling

Typical when you mention “Petrulio” as an economic benefit to the Canaries in the presence of Canarians you get a skeptical reaction at best. At worst, you get a heated singular opinion about how big oil and government officials are perhaps going to make money BUT all at the risk of destroying our beautiful beaches and tourism livelihood. Of course, they are referring to the extraction of oil somewhere off the coast of our spectacular archipelago. Which strangely wasn’t the main subject of the forum on The Future of the Oil Industry in Gran Canaria, which was held the other day at the annual Gran Canaria Business Week Conference.

Frankly, before Odd Are Tveit, CEO of Otech, spoke, most of the mainly ex-pat filled audience had this same singular opinion, i.e. ´Oil will be bad for Canarios´. Just like the vast majority of the Canary Island people, they had no idea that there could be a whole other side to the oil industry presence in the Canaries that could mean huge local economic benefits but without all the controversy that comes with actual drilling not far from our coastlines.

Odd explained to a engaged crowd of spectators that rig (plataforma) repair, maintenance and related services could be the future solution to the Canary´s unemployment and economic woes. He started his argument with a rectangular world map where not surprisingly you saw that the Canary Islands are strategically located dead center. He pointed out that RIGs are constantly moving from one part of the world to another and that dozens perhaps even hundred or more a year pass by our centrally located islands on their way to drilling or repair locations. And because of the hazardous natural of their operation, governments and global organizations are requiring higher and higher standards in maintenance of these colossal machines which means money for the ports that can service them.

These repair & maintenance operations mean really money, big money, money for the local economy. Odd outlined an example of an typical service scenario: A rig and it´s 80+ workers stay at the GC port for over a month perhaps up to three months, generating an average spend at the port in the neighborhood of 10 million euros for docking, repair, and related expenses. However, these expenses don’t even include what the workers will spend in accommodations, dining and other layover activities like bring their families over for sunny vacations. Now multiply that scenario by 8 to 10 rig service stops per year! This is one way to take advantage of oil money even without the controversy of drilling, and it´s already began.

That is, perhaps, just the tip of the iceberg. Because once the Las Palmas port has a thriving rig servicing infrastructure, and couple that with the fact that exploration for oil is ever increasing up and down the coast of Africa while at the same time African governments are continually destabilizing, oil companies will recognize that the city of Las Palmas and its port as a geo-politically stable and convenient hub to set up their daily operations. Think of Kinross Gold Corp. but a hundred times over.

It´s not a question of drilling or not drilling, it´s a question of being prepared for the future. The conclusion that the conference attendees walked away with is that perhaps there is an oil boom coming to Gran Canaria, but it´s not at all like what´s currently being pitched in the local media or on the street.

Listen to the full presentation.

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