It’s hard to predict what is going to happen next year. But one thing we all believe is that tomorrow will be different, there will be some changes or advancements as well.
My good friend, Mark LaCour has been doing this for the past four years. This year I thought I would take moment to do the same but with focus on East Africa, specifically Tanzania’s oil and gas industry
I have conducted no official survey, However, I did deep research before I craft this publication. So whether my prediction will be right or wrong. The prediction aimed you to prepare and help you make an informed career or business decisions.
Here are oil and gas trends to watch in 2019:
1.China’s Thirst For Tanzania and Mozambique LNG.
China will be the ideal buyer of East Africa liquefied natural gas (LNG).
China’s need for an alternative source of energy is much greater. Urbanization and population growth are driving China to find an alternative source of energy. Bloomberg New Energy Finance pointed out that China LNG’s import climbed up by 50% in 2017 and ranked China as the world’s largest third buyer after Japan and South Korea.
Here’s a snapshot of China’s gas needs:
What does all these mean? That means China will buy more liquefied natural gas (LNG). than Japan and South Korea in the coming years.
2.EACOP investment decisions will be made.
This is the news we’ve all been waiting for.. In January 2018 ( naturalgasworld) pointed out that UK- based oil firm Tullow Oil noted that they expect Final investment decision to be taken by end of June 2018.
Most people had intense believe that the pipeline construction would start in 2018. Technically speaking, pipeline construction is relatively quickly. But planning’s pipeline route and getting the agreement of all the people affected by it can take many years.
And that is why, the stories about this project started in 2014, but it will take only 36 months to finish the project. If you focused on media attention about the status of the project, you will notice that there some progress being made to fast track this project. These include:
- On 23rd April, the Ugandan government picked Tanzanian routes as economically and technically feasible for exporting its oil to the international market.
- An intergovernmental agreement between both countries was signed in May 2017
- Two presidents from Uganda and Tanzania lays the foundation stone.
- Gulf Interstate engineering (GIE) OF Huston has completed Front-end engineering and design (FEED) study in February 2018.
- To gather information about surface and subsurface information, geophysical and geological and other environmental studies are still on progress
We might be waiting for the completion of the host governmental agreement(HGA) following with final investment decision (FID)to be reached. With all progress being made, hopefully, the investment decision will certainly reached and project will kick off in 2019.
- Huge explorations and development decisions will be made.
East Africa is arguably THE most exciting oil exploration region in the world.But still is most untapped region.As the time of this writing explorations activities confirmed reserves of 57.54 trillion cubic feet of natural gas in Tanzania. And more than 441 trillion cubic feet of natural gas are still trapped underground, solely in the coastal region according to the US geological survey. So discoveries might be forthcoming.
This is why giants like Royal Dutch Shell, Equinor, Total and Pavilion Energy are buzzing around Tanzania like bees to honey. The big boys don’t lift a finger if there’s not a chance big profits could be made.
There are indications of massive oil and gas resources, all of them untapped, underdeveloped and crying out for exploration investment
If you follow the oil and market trends, you will know that 2014 to 2017 was hard to attract investors for exploring oil and gas resources due to slump in the international price of crude oil. The market is returning in the better days and confidence is returning
This will drive more oil companies to explore oil and gas in Tanzania. There will be an increase in exploration activity in 2019, more precisely I expect to hear some geologists and geoscientist work together to pinpoint the exact location they can drill the first well in Eyasi-Wambele basin.
- Oil companies shift to the Uber model. That’s another trend we hope to experience in 2019 and beyond. And they must do so to attract younger generations that are more willing to accept new technologies. The oil and gas industry has tons of senior member with 20 to 30 years of experiences.
And when you come in and express to them that you have new technology that will make them do their work better –more productively, efficiently and quickly, they it taken as you teach them to do things they have been done for the past 30 years. But the new generation have open mind to accept new technologies.
In addition to that, the older generations of the oil and gas industry are about to retire. This result to the talent shortage.
To infuse workforce, oil companies couldn’t only partner with local universities but they will make industry sexy for new generations. Young generations are getting into the industry because are impressed with digital technologies.
Have you asked why do people love the Uber? The answer is pretty simple because it makes them more productive and more efficient. Uber does not own Taxi.
More specifically don’t own drivers. They rely on independent drivers who own cars and actually carry people. They use mobile technology and the emergence of a smartphone to bring efficiency to its users.
The new generation comes in the industry with the expectation to find iPhone, Ipad at the workplace. To attract them to the oil field, oil companies will shift to an uber model.
5.An increase in downstream and midstream projects.
Unlike the upstream area of the oil and gas industry, midstream and downstream sections of the industry are not affected by the low oil prices. In 2019, we expect to an increase activities in these segments such as Pipeline constructions, Natural gas distribution network We shall see more downstream and midstream projects in the region such as pipeline construction, construction of Compressed natural gas (CNG)
6. The energy demand will continue to rise
Natural gas continues to grow its importance as a source of energy in Tanzania. Because its power plant relies on it. For instance, some three years back, the 150mw kinyerezi-1 facility came online, Also on April 3, 2018, 167MW Kinyerezi-2 facility was fully commissioned.
And all these are the gas-fired power plant. The demand for gas will climb within n Tanzania in 2019 and is supported by industrialization, economic growth, and electrification in the region
7.Oil and Gas Skills Deficits.
Oil companies will continue to face a skills shortage. This is the result of massive hiring in good times and downsizes when the market goes down. In addition to that senior member of the oil and gas industry are heading into retirement some of them have left the industry and result to skills shortage. This present growing opportunity for those who want to work in oil and gas industry;
The purpose of this prediction is not whether I am right or wrong, the question here has you prepared in case my predictions come true.
Gearing up for exciting 2019!