Marketing in the Oil and Gas Industry: Does Your Business Employ These Three Effective Marketing Strategies?

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Marketing your technical and professional services can be a little bit frustrating if you’re unaware of the needs of and challenges facing the oil and gas industry.
This article will expose you to some strategies to market your professional services, especially the fact that deals are made through handshake and relationship.
Before we move into strategies, let’s first have a closer look at why marketing in the sector needs different approaches.
Intense Competition
It is not surprising that the oil and gas industry is one of competitive industries in the world. People understand that the stake is high, so  more people want to invest in the sector.
Consider the proposed East African Crude Oil Pipeline (EACOP) project, for example. How many people are planning to capitalize on the opportunities in the project? I guess a hundred companies. I believe that the Procurement Department at EACOP receives hundreds of emails from suppliers each month.
More importantly, buyers in the oil and gas industry are more demanding: they want you to commit to long-term relationship with them. The quality of products is not enough to guarantee you repeated contracts now but ongoing relationships after sales. This will take your business far. So, companies, like yours, are looking for better ways to connect with clients and industry’s influencers. The reason is that these buyers don’t know who you are; you are invisible to them if you don’t have a relationship with them.
Increase in Similar Products and Services
There is lack of differentiation among competing suppliers and professional service providers. Many companies have no unique competitive advantage that would give clients a reason to shift from their existing suppliers and buy from your company. I call these _*commodity products and services*_. They _differentiate_ themselves by meaningless descriptions.
The descriptions are something like: “We are a leading supplier of spare parts in Tanzania”; “We offer quality services in timely manner and at international standards.” But buyers do not care about all of that. What they care about is how you can solve their problems, and increase efficiency and productivity. Each company must have something that separate them from the competition.
Buyers in the industry have a desire to form a tighter bond with few suppliers. If your company doesn’t have uniqueness, it means that you are telling the same story that buyers have already heard from your competitors. You need to tell them a different story. If you do, you’re giving them a reason to switch from their existing suppliers.
Multiple Decision Makers
No single person is responsible for the purchasing decision in the industry. Even CEOs first consult the Board of Directors to confirm if the company has been overcharged or not. The decisions are made by multiple people who have different power and influences. Even if you are looking to supply Maintenance Repair Operation (MRO) supplies such as pumps, fittings or fuel. Many would evaluate your Request for Proposal before selecting the qualified supplier. To make matters worse, the sales cycle is too long. It ranges from one day to months. Sometimes, it could take a year. The bigger the order, the more people involved in making the decision and the longer the sales cycle.
In reality, those who can increase their visibility by deploying many marketing tools in their marketing efforts stand a greater chance at reaping substantial reward. Those who can define their company’s unique strength that separate them from their competitor would stand out from the competition.
Setting Your Mindset
Now that you understand why marketing your technical and professional services in the oil and gas industry needs different approaches, let’s discuss the main objective of marketing in the industry.
If asked, most technical and professional service providers will say the objective is selling their products and services.
No. The purpose is not to make immediate pitch or direct sale. It is to build a relationship of trust. End of story.
Your marketing efforts should aim at putting you in front of prospective clients, building a database of qualified leads, and converting those leads into appointments, so that you can have a deeper understanding of their needs and for clients to understand that you can meet their needs.
This helps to build relationships with the buyers. And guess who will be considered when they evaluate Requests for Proposal from competing suppliers? The answer is YOU. That’s because they prefer to work with people they like and trust. This solid relationship leads to a lot of multiple opportunities.
By shifting your mindset and focusing on the relationship-based culture, you are presenting your firm in a positive light.
Rather than interrupt your client by showing up in their office or use high-pressure selling tactics, marketing and branding programs help you communicate your brand’s story in a way that buyers in the industry care and are passionate about. If clients are passionate about your offer, they not only give you repeated contracts, they become raving fans who trust you and want to work with you. That makes you a BIG fish in a small pond.
Turn Your Marketing Efforts into Good Results
Strategy #1: Understand Your Marketing Program Objectives
Whether you use direct email, public relation, speech, presentation, networking or ads placement as your marketing tool, articulate what you want to accomplish with your marketing and branding campaign. These two are pointless if you are unaware of your objectives or unsure of your expectations. Are your marketing programs aimed at enhancing the reputation of your company or developing leads and inquiries?
If, for example, your marketing program is designed to generate inquiries, then your marketing efforts would produce result. Otherwise, it would be a wasteful opportunity.
Strategy #2: Deploy Different Marketing Tools
When you are marketing your technical or professional services, keep in mind that no single marketing program can produce a great result.
Let’s say you have been using a direct email as your marketing tool to approach the buyers. If you measure the result, how many orders are coming in through that channel? Even if you say it works just fine for you, unless you combine a mixture of marketing tools, you won’t see a flow of opportunities.
No marketing tool works alone. Direct marketing cannot work on its own. Cold call or telemarketing cannot work alone, as well as proposals, networking, presentation and public relations. But its mixture will produce great results.
Strategy #3: Your Marketing Program Should Focus on Specific Services
Marketing programs work well if they are concentrated on the specific services that buyers really want. For example, if your firm offers maintenance services as well as manpower to the industry. You can decide to focus on single services along in your marketing programs. This produces a good result as opposed to trying to be general.
Final Words
Remember that no marketing or branding program will sell your services. The best it can do is increase your visibility and educate clients on your company strength and capability. This helps generate leads and turn those leads into appointments. Perhaps that might result into receiving a Request for Proposal.

Oil and Gas Hot of the Week (OGHOTW) -Story From Mark LaCour

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In our new campaign called OGHOTW, we post stories and quotes about the oil and gas industry that will give you new insight and take your career and business to the next level.
The good news is that the stories come from people who have passion to make positive contributions to the lives of others. They use platforms in the industry as a vehicle for that. All of them are recognized as industry leaders.
This week, we are learning from my good friend Mark LaCour. Let’s all face it:
“This is an industry of people doing business with people [as opposed to people with corporations or corporations with corporations]. People in oil and gas business prefer to do business with people they like and know,” Mark LaCour is quoted as saying.
Excerpt
Now, you understand the relationship-based culture of the oil and gas industry, that people sell to people who talk and think like them. Any other factor is unproven and risky.
So, if you put yourself in front of prospects, shift your mindset from making immediate pitch and focus on building relationships based on trust.
Do that and you will stand out from the crowd.
Click the link below to learn more about Mark LaCour

Marketing for Oil and Gas: Defining Your Unique Competitive Advantage

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As the oil and gas industry mature in Tanzania and East Africa, the competition continues to increase. So,oil and gas buyers have more choices.

Buyers in oil and gas industry have two options:

1.To buy from your company.

2.To buy from your competitors.

To stand out in this competitive industry, you should define your unique competitive advantage.

Competitive advantage is the set of your company’s capabilities that give the reason why buyers should choose your company over the hundreds of others that exist. It is also called distinctive competence or unique selling preposition.

Identifying your distinctive advantages will help you build solid relationship with client, charge good price and attract more business opportunities.

Lack of differentiation among competing products and services in the industry force oil and gas buyer to make purchasing decision based primarily on price.

The buyers in oil and gas industry have tough times evaluating Request for Proposal (RFP) among suppliers who lack the differentiation.

So,they do what they think is easier for them.They evaluate them based on price.

No matter how low you quote your goods and service there will be someone else who has priced their products or services lower than you have.

So if your competitive advantage is lowest price, quality products and services, or delivery time and availability, I can confidently tell you that you are limiting your competitive growth across the industry.

The Biggest Issue

The sad reality is that most technical and professional service companies selling goods and offering services to the oil and gas industry lack (ort hey do not define their) distinctive competence.

When suppliers sell to buyers in the industry, they often focus on features of their products or services rather than the benefit they offer to client.

They look at what their competitors do, and they imitate.There is nothing bad in modeling what is already working. But that makes you look like just another company who competes based on lowest price,quality, reliability and delivery time.

For example, a lot of suppliers try to differentiate on quality or price.

When I read marketing materials or company profiles and brochure of a company in the industry, I discover the following meaningless differentiators:

  1. “We are a leading provider of quality goods or services in the industry or region.”

  1. “We offer goods and services in timely manner.”

  1. “We offer goods and services at competitive prices.”

  1. “We render our services with high quality and safety of international standards.”

In fact,offering quality goods or delivering them on time is not unique. But that is the best practice of doing business in the oil and gas industry.

Again, delivering the services at safety and international standard is not unique—it’s just the industry requirement.

Even worse, every company promotes her products and service that way in the industry.

Related:Five Stupid Marketing Strategies to Avoid When Marketing in the Oil and Gas Industry

Define Your Unique Competitive Advantage

People believe that there is no uniqueness if what you offer is technical or professional services.

Whether you offer maintenance, repair and operation supplies (MRO) or consulting services, or even construction services such design and fabrication,you must have something unique that distinguishes you from the competition in line with what is desired by buyers in the oil and gas industry.

The first step to uncovering your uniqueness is to find out what buyers want and need in the oil and gas sector.Ask questions such as,“why should they buy from me rather than my competitor? Why should I win this contract?” Once you answer those questions, you will find your unique selling proposition (USP).

Here are characteristics of good competitive advantages:

It might offer strong value to the clients/it might be of perceived value to clients.

Competitors can’t easily copy it.

Are you confused? Let’s discuss a way to define your distinctive competence.

Internal Strength

You can find your unique competitive advantages in your internal capability. Find out what your capability is in every area of your company operation,from R&D, engineering, production, marketing to distribution.

What area of your company operation are you good at and that clients desire?What are the skills or knowledge that you think can product good result to clients?

Also,craft a marketing message that communicate your distinctive competence and put it in all your marketing materials such as websites, company profile and presentation.

Your Turn

What is unique about your company’s product or services? Why should clients do business with you rather than your next-door competitor? If you can’t answer this question, you are losing huge opportunities in the industry.

How Oil and Gas Companies Can Turn Stakeholders into Raving Fans

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Many oil and gas companies spend thousands of dollars in building and managing their brand value.

But in many oil and gas companies, branding is often the most misused and least effective marketing activity.

Technically speaking, there is one major reason for ineffective branding in the oil and gas industry, and the reason boils down to the tendency of the branding strategies to focus solely on increasing investors outreach,boosting recruiting efforts and creating a positive image in the community.

A huge amount of time and energy is devoted into attracting stakeholders rather than creating raving fans.

Instead of focusing on delivering amazing customer experiences, these companies use branding and communication activities to push and pitch their corporate message.

Your brand is more than just a company name, logo or website.

It is the perception of your company or its reputation. It is what people say and feel about your company and what they expect to achieve by working with you.

If your brand has a good reputation but not have high visibility in the industry, then it would be hard to build a solid brand.

A solid brand has both reputation and high visibility. That means that the brand is well known to target audience in the industry.

And the cost effective way to having a highly visible and well-known brand in the industry is focusing on creating raving fans rather than stakeholders.

The best benefit of creating raving fans is that they amplify your brand’s messages and they take it to the height you would never reach on your own with paid advertising.

Here are some strategies which oil companies can capitalize on to turn their stakeholders into ravings fans who will talk positively about their brand and spread their company’s story to their friends or even colleagues. This will have noticeable impact on their brand.

Show Them Your Efforts and Achievements

Investors who will like to fund your next drilling program want to be invest their money in a visible and strong brand. They also want to be educated about your performance and activities.

By telling them all the efforts that goes into your operations in extracting oil and gas resources, it gives them assurance in your company.

Do this by producing a special report that demonstrates how you overcame a unique challenge and take smart risks, or even share your brand success stories.

Related: Five Stupid Marketing Strategies to Avoid When Marketing in the Oil and Gas Industry

Once this report is published to reputable industry publications and distributed to delegates at major industry events, your brand stories will reach more people that you would never reach on your own with normal annual report.

Don’t let your efforts go unnoticed: tell them your challenges and ways you combated it, and make sure it’s distributed to the delegates at major industry events.

Make Smart Use of Technology

The reality is that the oil and gas industry is one of the slowest industries to adopt new things, especially new technologies. Also the industry is struggling to attract very talented people. For instance, your current workforce will retire in the next 10 years. Guess what? Your company will need to hire young people and students to fill the positions after the current workers retire. And the best way to do so is by making smart use of the new media and digital technology as well.

Creating amazing content on the social media on the way your company deploys new technology to extract oil and gas resources in harsh and dangerous environments, such as the deep water will help develop deep connection with young people and help give them the taste of how is it like to work for your company.

By doing that, you build an image as an educator or trusted advisor for your brand in the industry.This raises their self-esteem and they begin to think that your company is an amazing place to grow their career.

Make It Easy and Fun to Deal with Host Communities

Host communities support brand that care for them. When you demonstrate your care about a community, the community will in turn care about your brand and have positive perception about your brand.

The communities do not care about your company name or logo, but they care how your operations benefit them. The era of pushing your corporate message has ended.To build your brand,your marketing strategies should deliver amazing experience and, if done well,these communities will become evangelists for your brand.

Final Word

When your company has raving fans, you attract investors easily, and the best employees will want to work for you. So, it will make recruiting the best talents easier.

Five Stupid Marketing Strategies to Avoid When Marketing in the Oil and Gas Industry

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Whether you market directly to oil and gas companies or you approach their prime contractor, some marketing blunders will waste your time and money.

In this article, I will outline a list of common marketing mistakes made by companies trying to market to the oil and gas industry.

  1. Not Understanding the Goal of Marketing in the Industry

If you ask many suppliers and service providers what the purpose of their marketing is, they will say that it is to sell their products and services to companies in the industry.

But the goal of marketing and branding in the oil and gas industry is not to make quick sales.

The ultimate purpose is to find people who are interested in your offer and to put them into your follow-up database, so that you can offer them value and create long-term relationships built on trust.

After making a first sale comes the consequences. You need to accept the fact that people in the oil and gas industry do not buy right after being offered a product or service. However, you can immediately make sales once you have developed a solid relationship with clients.

  1. No Differentiator

 

I spend time reading marketing materials and company profiles of many technical suppliers and professional service companies. You can summarize the structure of their company profiles and marketing materials for most of these companies as follow:

-Company logo.

-Company name.

-List of products and services.

-A meaningless slogan claiming to be leading suppliers in the region or providers of quality goods and services.

In fact, most of the equipment and professional service providers have no unique selling proposition that sets them apart from their competitors.

Their marketing materials have been designed to be all about their brand rather than the benefits they offer to a prospect. These are the brochures they send to prospects.

Claiming that you offer good services at international standards isn’t what differentiates you from your competitors because every company claim to be the provider of quality services.

Also, offering quality services is not unique; it’s just the best practice of doing business in the industry.

Related:   A Toolbox For Marketing In Oil, Gas& Energy Sector

Your company profile, website and marketing materials are the most powerful lead generation tools you have. Because they give clients a sneak peek into how it is like working with you. When you write marketing materials, ask yourself why clients should buy from you rather than your competitors. Then write a material communicating your answer: that is, the benefits and values you would offer the client.

  1. Forgetting Online Branding

Digital marketing and branding are questionable strategies to most technical and service companies in the oil and gas industry. But today, buyers look for a better result at competitive rates.

They also want to be better informed before they make a purchasing decision. So, they do their homework online first before deciding to buy. They also research for specification and prices as well.

So, if you use your website and create contents that educate your clients on your experiences, or if you share something valuable on what you do, your company would generate new leads or even be considered at the time of RFP evaluation.

  1. Not Realizing the Power of Brand Building

Most companies in the industry have not yet realized the full potential of building their brand.

Your brand is not just a logo, company name or website. Your brand is your reputation and visibility in the marketplace. A well-known brand easily secure new business ventures, attract strong partners and recruit the best talents.

  1. Positioning Yourself as a Supplier Rather than a Partner

Buyers in the oil, gas and energy sector look for partners who will have a long-term collaboration in a win-win situation with them.

Don’t be seen as a vendor on the supplier’s list. Position your company as a partner who offers value for mutual benefits.

A Toolbox For Marketing In Oil, Gas& Energy Sector

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People believe that the oil and gas industry in East Africa is relatively new, and so it generates few opportunities.

I totally agree that Tanzania and Uganda are in the early stages of developing their oil and gas resources. But that does not mean that the industry presents limited opportunities in the region.

Opportunities are numerous in the oil and gas sector in East Africa.

If you look deep into the oil and gas sector in Tanzania, you will notice three things:

First, we have a lot of oil and gas facilities, such as natural gas plants, power plants, and oil depots. And they need recurring services such as maintenance and equipment supply that would keep the facilitiesrunning.

Secondly, oil and gas companies are still producing oil and gas resources.

Thirdly, major projects are coming on stream. There is the East African Crude Oil Pipeline (EACOP) project. We shall soonwitness the Tilenga and Kingfisher project in Uganda.

The good news is that, each day, these projects are in need of goods and services that your company can provide and thereby benefiting from the significant natural gas and oil discovery in the region.

Your Brand is Your Most Important Asset

Opportunities in the oil and gas sector in Tanzania and East Africa are numerous.

But marketing for the oil and gas industry needs a different approach. This is an industry where deals are made through handshakes and relationship.

Brand building is the key to developing industry relationship with clients, generating new business leads, and attracting talented employees.

The purpose of marketing and branding in the oil and gas sector is not to make quick sales but to find people who are interested in your offer and put them into your follow up database so that you can build a strong relationship with them.

If your company understands the relationship-based culture of the oil and gas industry and starts implementingmarketing solutions that build your brand value, then you will start to experience an amazing result. The contract will come naturally.

The oil and gas business is a very competitive industry. More companies like yours are looking for better ways to connect and create a solid relationship with clients. A strong brand presents you with numerous opportunities. It helps you build a relationship with clients, stand out from the competition, and win more jobs.

The Biggest Obstacle Facing Service Providers inthe Oil and Gas Sector in Tanzania and East Africa

The common belief among many people is that lack of finance is the biggest obstacle holding back the service sector in growing their business the oil and gas sector.

To me, funding is not a big issue for service providers in Tanzania. Most of the companies providing technical, consulting and professional services have a good reputation in offering amazing products and services.

But they often lack industry brand awareness that gets them considered for sourcing finance, attracting the best talent, and securing new business.

Your company’s brand might have an excellent reputation, but it should have high visibility in the oil and gas marketplace, too.

You can’t underestimate the impact of a visible brand in the energy sector. A strong brand has an easier time attracting new clients and securing funds, and the best employees will want to work with that company.

And once you win a contract or oil companies gives you a purchasing order, the bank can easilyfinance your working capital.

Five Things Public Relations and Marketing Communication Can Help Your New Brands Achieve in the Oil, Gas and Energy Sector in Tanzania and East Africa

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New oil and gas discoveries are being made in East Africa and the opportunities available for oil and gas exploration are awarded to the highest bidder every year. The East African region presents enormous business opportunities for companies who are willing to take new risk especially in Tanzania and East Africa’s oil and gas sector. Your company can capitalize on the opportunities in the industry through a public relations marketing program.
Among other things, the following are the five things public relations can do for your new brand in the oil, gas and energy sector:
1. Building Industry Presence
As you enter the new oil and gas market, nobody knows about your company, your products or even your services.
PR can play important roles in increasing industry presence as well as raise awareness for your products and services in the market.
2. Finding Local Partners
Tanzanian companies love to work with reputable and credible brands that have positive image. The good publicity can be worth many thousands of dollars in free advertising and, most importantly, can attract local companies that seek joint venture opportunities or seeking business-development opportunities with your company.
3. Attracting the Right Talent
To achieve your operation goals, your brand needs local competent workforce. A good PR can be play great role to convince the prospective employees that your company is a good place to grow their career.
For example, by creating a press release that promotes your branch in the region and contracting a public relation specialist to help publish your press release and earn media placement, this would increase your brand awareness and can attract competent workforce for your firm.
4. Generate Consumer Interest
Consumers want to order services and buy products from brands that have a positive image and a record of accomplishment in terms of delivery time.
Public relations can help you demonstrate your past achievements and completed projects. The practice generates the end-user interest, which is the ultimate goal.
5. Increase Your Brand Value
People love an established brand. This is why they search for reviews on your company services, ask for their relatives and colleagues’ opinion on your company, and call your customer care unit to see if the story tallies. Public relations give you the power and privilege to demonstrate what you are offering and how it can benefit the clients. This increases brand recognition and makes people value your brand. In essence, people will not need to ask their relatives or call your customer care unit, because you will have succeeded in creating a household name.
New brands seeking to enter the Tanzanian oil and gas market can do this by working with public relation specialists and producing a special report that tells the story of the company, and demonstrate the core value of the company and its track record. The public relations specialist would then send the report to major oil and gas companies in East Africa and distribute it to delegates at major industry events across East Africa. The practice helps prospective clients to keep in touch, which enhances relationship. This could attract investments to the company.

How East African Nations Can Maintain Control of their Oil and Gas Sector while Attracting Huge Foreign Direct Investments

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The proliferation of new oil and gas discoveries and major oil projects coming on the stream create a huge demand for skilled workforce in Tanzania and Africa at large.
To make the business of extracting oil and gas resources better for nationals, East African nations should think about solving the workforce challenges in the region. That can be done by developing the structure of education and training of nationals to work in the oil and gas industry.
Challenges
From the first day an exploratory well is drilled, many emergent nations have one clear vision: to start extracting oil or natural gas from the ground quickly and to start making a lot of money.
I call this “short term thinking” and it intends to reap instant results, which has led the local industry to where it is today in many new oil and gas economies. The goal here is to rush into money-making opportunities.
So what do they do?
They invite international oil and gas companies to bid for available concessions. With a lot of political pressures, most of these nations would rush into introducing local content rules (that is, through national economic and national security policies, they restrict business activities in the sector, believing that this will increase the local participation.)
Instead of training people locally, these nations would offer scholarship to those who have high grades and send them overseas, and then local colleges and universities will have to train those whom are left behind.
This makes international educational institutions a lucrative market with a good number of African candidates.
Some of these graduates would never return home, worrying about the high rate of unemployment in the region and the missed-out people who could conduct R&D.
But here is a one-million dollar question?
How on earth can international oil firms and state oil firms hire people when they do not possess the relevant skills and knowledge to do the oil job?
From the first day I entered into the oil and gas industry, I have been told that the industry needs competency. It is an industry in which safety and productivity is absolutely paramount.
I totally agree that increasing local participation has a purpose, but local participation has little meaning without internal or local capability.
What are needed are not rules but local capability to execute the complex and challenging task in the oil and gas operations.
So what would happened in the next 20 years to the country with  “short term thinking” vision? The answer is pretty simple.
The local community will be unhappy as they will perceive this as “a foreign industry” and has little economic benefit in their lives.
Local supply chain businesses will have no business to compete with in the industry, because they will lack capacity and capability, which that competition will make them possess.
Oil companies will hire on a short-term basis, based on their needs. The local oil industry will necessarily rely on foreign expertise.
In addition, international oil firms will lose interest in investing in the opportunities in the region as there are few skilled employees and workers with experience and capacity to do the oil jobs.
The educational systems of these nations will remain the least efficient in the world and continue to produce graduates who do not meet the standards of the industry.
That’s dangerous because that is what leads to underutilization of resources in many emerging oil and gas producing countries.
Solutions
Imagine an industry that is dominated by locally trained nationals at every level, from entry-level position to managerial position.
The local supply chain should be competent enough to win business opportunities in the industry. And the nation’s educational system should meet the needs of the industry and be well respected across the world.
Imagine a country with people who have skills and experience to compete for employment and contractor opportunities both at home and overseas.
I strongly believe this can be achieved in emerging oil and gas countries. Maybe not today, maybe not tomorrow. It will be a gradual process. But with the right strategies used for over 20 years, these nations would have bridged the local workforce challenges.
The right approach in growing oil and gas resources in emerging economies is to focus on building a new economy in connection with the right skills. That should be the primary objective from the moment the first oil and gas exploratory well is drilled.
Conclusion
Collaboration and partnership among international oil companies, relevant government department, private training providers and international institution could bridge the skills gap in African hydrocarbon countries.
The time has come to solve the challenge we have. Together, we can take the African upstream oil business both in 2019 and beyond higher. Cheers.

A New Business Model for the Oil and Gas Companies in Tanzania and East Africa

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The price of crude oil is recovering gradually after going through a major slump in 2014–2017.
This has profound effect to everyone engaging in any aspect of the oil and gas business: from oil and gas professionals to oil companies that extracts oil and gas resources to those who providing supportive services.
For the service providers, efficiency is vital to surviving in the current oil and gas market. International oil companies are looking for better result at competitive prices and within a short period of time.
On the other hand, international oil companies are forced to adjust their business model to cope with these uncertain times.
In the oil and gas industry, two business models get most of the attention:
MODEL NUMBER ONE: Old School
An international oil company would hire a highly experienced expatriate from any part of the world and bring them to work in East Africa.
They could also buy goods and services from any part of the world, if that will get them the price and quality they want.
This model is outdated and not economically viable.
The cost of hiring an international oil and gas professional and bringing them to work in Tanzania outweighs the cost of training and employing local workforce. Also, relying on oversea workforce and suppliers can give the oil companies the following addition cost:
  • Foreign exchange rates
  • Extra paper work and documentation such as work permit, resident permit etc.
  • Import duties
  • Agent brokers and middlemen expenses.
  • Import and customs fees*
This makes this model less effective and not commercially viable as most oil firms are seeking to cut cost to cope with the current environment.
MODEL NUMBER TWO: NATIONALIZATION MODEL
Model number two is an investment-driving model, which is typically focused on reducing cost, increasing local government revenue, generating value to government, communities and citizens, and improving the locally based economy.
This is a profitable model for international oil and gas companies that are searching, developing and extracting oil and gas resources in Tanzania and East Africa.
I hope this helps. If you find this article useful, share with friends.

Skilled Labor Shortage: What the Oil Industry in East Africa Need to Do

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What do you think the oil and gas industry in Tanzania and East Africa at large need?
The industry needs many skilled and competent people at every level to work in the industry. It is obvious that there is shortage in the current local workforce in Africa. The industry is “crying” for many skilled, competent and committed  individuals to explore oil and gas resources.
The workforce shortage challenge in East Africa can be addressed by creating an education and training system that meet the standards of the oil and gas industry.
So, educating and training people who would capitalize on the new found oil and gas wealth is vital for the local industry development.
By training local people, the East African industry will be dominated by local workers and this will promote the locally based economy.
Oil industry  presents many technological challenges in the exploration and production of natural gas offshore.
The country has to decide: East African companies either invest in technical capability or leave it to international competitors.
When you educate and train the local workforce, the industry will be localized after a certain period thereby promoting the local economy.
The Right Approach to Competency Development in East African Oil and Gas Sector.
The shortest route to meeting this challenge is through partnership and collaboration at the local level.
Private training providers have an opportunity to grow their business by training learners at national universities and colleges rather than relying on training staff at major oil companies –which is a “tiny” market.
On the other hand, local colleagues could provide access to training facilities and classrooms to private training providers. This is a cost-effective method and it will help them train local people quickly than they will if they build a new training center.
Final Words
The challenges of building local workforce can be met through collaboration between international workforce and training providers as well as between government departments and international oil firm.
Time has come to solve the challenge we have. Together we can take Africa upstream business both in 2019 and beyond. Cheers.