The document outlines plans for the Mthombo Competitive Supplier Development Programme (CSDP) to support local suppliers in South Africa to participate in the construction of a 360,000 barrel per day crude oil refinery in Coega. The objectives are to develop local suppliers to increase competitiveness and meet a 30% expenditure target. The presentation covers CSDP objectives, opportunities for local suppliers, constraints, a schedule, and requests for support from stakeholders in funding, databases, lessons learned, and communication.

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 Element
Item 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 Schedule
Preparatory Actions
CSDP Team
Key Stakeholder Engagement
MOU Agreements Draft
Road shows
Rules 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