GE Oil & Gas (NYSE: GE) and the Angolan group GLS Holding S.A. today announced the formation of a new joint venture, GE-GLS Oil & Gas Angola Limited, to better support Angola’s rapidly growing oil and gas sector.
As part of the agreement, which received the approval of Angola’s National Agency for Private Investment (ANIP), the companies are planning a proposed initial investment of US$175 million to build a new manufacturing facility in Soyo, in the province of Zaire, that will supply subsea equipment to the oil and gas industry in Angola.
Dr. Eugenio Neto, president and CEO of GLS Holding, S.A. and vice president of the new JV, said: "GE-GLS Oil & Gas Angola Limited intends to support the development of Angola, bringing new manufacturing and industrial technologies to the country and creating hundreds of jobs directly and indirectly. The investment represents an important contribution to the country’s "Made in Angola" initiative and, consequently, for the continued growth of Angola’s oil and gas industry. It will be a great asset to Angola’s petroleum sector and the country and its first priority will be to meet domestic demand in Angola.”
The new manufacturing facility will start operating in two years.
Due largely to its offshore energy resources, Angola is undergoing rapid transformation and economic growth. The country has experienced increased exploration and development activity from the oil and gas industry over the last decade and is now one of the largest producers of crude oil in Africa.
GE has been active in Angola since the late 1950s, giving its support to the development of the national oil industry. Earlier in 2012, GE Oil & Gas also signed an agreement with Angola LNG, operator of one of the world’s most modern LNG and processing facilities, for processing liquefied natural gas (LNG). GE also is a major supplier of gas turbines and compressors for the Angolan offshore energy sector.
GLS Holding, S.A. operates in the oil and gas sector as well as in real estate, construction, insurance, heavy equipment, industry, agriculture, logistics, transport, health, mining, hospitality and tourism, culture, sports and entertainment.
"The purpose of this investment is to provide the country with new production capacities, including high-tech subsea production equipment, that will create added value and technological knowledge,” said Marco Caccavale, general manager of GE Oil & Gas for Sub-Saharan Africa. "The expectations for Angola are great. In Angola, growth is more pronounced when it comes to increased oil production, gas processing and proven reserves. GE Oil & Gas is proud to be part of developing Angola’s oil sector.”
Armindo Costa, president of GE Oil & Gas Angola and the new joint venture, said: "In the growing Angolan oil sector, we see the market favorably as the demand for quality equipment is increasing, which is driving the need for greater manufacturing capacity. Competition is strong and we are here to compete. It is important to produce quality equipment, and we have this quality product. We look forward to the opportunities that the market offers.”
Asked about the expectation of growth for GE Oil & Gas in Angola and the need for Angolan workers to develop the project, GE’s Costa added: "The dynamics of our growth also are consistent with the perspectives offered by the market. Angola today is producing about 2 million barrels of oil per day, which is why we are making this new investment in Angola’s oil industry. An investment of this size will require a large workforce. While there are difficulties in finding staff locally, we are committed to recruiting and training Angolans for the project.”