In recent days people were reaching out to me to discuss my views and opinions on the oil and gas sector in Tanzania and East Africa more broadly.
Since I set to achieve my purpose by connecting professionals with the best industry knowledge, expertise, and resources they need. So to help them make the best decisions or driving projects forward.
I thought, today I would take some moment to explore trends I am anticipating in the oil and gas industry in Tanzania and East Africa.
Let’s get started
Number1.Localizations of the oil and gas industry.
There is a strong drive in maximizing local participation in the oil and gas projects in East Africa.
What I have learned is that the region needs long-term dedicated investors that will invest not only in the commodity. But also, in great people of Tanzania and East Africa. This might be in terms of maximizing local hiring, training of the local workforce, local services procurements, local suppliers development. And promoting joint ventures.
With the recent low oil price and COVID-19 outbreak. The local content approach makes business sense.
The more you localize your supply chain the less exposed your operation to the risk related to customs delays, exchange rate fluctuation, and import taxes.
In addition to the Covid-19 outbreak relying on your procurement needs internally, expose you to high risk.
So if you are a company working in the oil and gas sector in East Africa. Localization of your supply chains is key to lower your operational costs.
Number 2:Downstream is going to be a huge market for everyone.
To enrich your background downstream is the sub-sector of the oil and gas industry. It involves processing, distribution, and marketing of oil and gas-related products including, natural gas, diesel, petrol, lubricants, LPG gas, fertilizers, etc.
The downstream market It’s going to be huge. Because the population of these countries is growing at fast rates. And hence the demand for the products is growing.
Look what is happening in Tanzania. Downstream facilities are increasing. Exploration and production companies are building petrol stations and selling fuel.
Multinationals are setting up CNG pump stations and inviting people to invest and natural gas distribution networks.
If you are a new entrant coming to our industry. I would strongly advise keeping your eyes and ears open in the midstream storage and transportation to downstream utilization. Opportunities in the downstream sector, involve building retail petrol stations, Lp Gas plants, lubricant blending plants ,oil terminal and storage facilities, and fertilizer processing plants.
I hope this helps.