Want to Start Your Business in Tanzania’s Oil and Gas Sector? Here’s How

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Have you ever wanted to start your own business in the oil and gas sector in Tanzania?

If you answer yes, then it’s a wise decision to pursue.

Tanzania’s oil and gas sector is another name for wealth. To verify my words, plan a visit to the Oyster Plaza building in Masaki, Dar es Salaam, where there are a lot of oil and gas companies’ offices. You will be shocked once you see Mercedes Benzes, BMWs, and all kinds of expensive cars in the parking areas outside the buildings.

This is a living testimony that they make huge money from the oil and gas industry.

The simple truth is that oil and gas entrepreneurs are super busy. They have only two options: either to take a flight for a meeting abroad or to deal with clients. But if you are lucky to meeting them even for 10 minutes, you will be amazed at their lifestyle.

And the reasons they make that huge money is because oil and gas products are fast-moving commodities in the world. The demand for oil and gas end-product and by-products are huge in Tanzania and across the world.

Tanzania has discovered 57.25 trillion cubic feet of natural gas. But according to the US Geological Survey, the country still has potential natural gas reserves up to 441 trillion cubic feet solely in the coastal region, so more gas discovery might be forthcoming.

My friend, oil and gas resources are wealth. The oil and gas sector has turned ordinary and poor people into extraordinary, wealthy people.

The best part of this industry is, the earlier you start, the better. Don’t wait until 2020 to enter the market, because a lot of international guys and only a few groups of Tanzanians are smiling to the bank with money coming from the industry.

I am not saying this to impress, but I want you to start benefiting from the huge gas discovery in our land.

Instead of being proud that you are in the country blessed with huge natural gas resources, now you should know how to monetize these resources and reach your mountaintop.

But don’t get me wrong, this is not a get-rich-quick scheme. To make good money in this industry, it requires a long-term commitment and building a strong relationship with clients. And just like anything worth having, it takes effort.

Are you interested in starting business In Tanzania’s oil and gas? Here are the requirements:

1. Find A Niche

Tanzania oil and gas is huge, and there are multiple routes to break into this industry. So, the first things you should identify are business activities that you have proven capabilities and capacity to do well.

I meet a lot of entrepreneurs who want to do all trades in the industry. But that’s not for you. Because you won’t succeed if you want to engage in all the trades at once.

To succeed in this sector, you have to put 100% of your energy into one business activity. And once you are doing well in that business activity, that’s when you diversify.

Finding a niche starts by identifying products or services you want to render in the industry.

Here are some of the business activities you could decide to do in Tanzania’s oil and gas sector:

  1. Become an oil operator. You will set up a company that searches and extracts oil and gas resources out of the ground. You might hear it often called Exploration and Production Company. It is capital intensive because it requires advanced technology, equipment, machinery, and highly trained manpower with expertise and experience in extracting oil and gas resources. But it yields solid profit if you manage to go on it.
  2. Offering mechanical services (e.g. welding and fabrication services.)
  3. Catering services (e.g. feeding oil and gas workers or pipeline construction crew on the campsite.)
  4. Logistics and transportation services.
  5. Offering oil and gas tools and equipment (e.g. pipes, valves fittings, drilling bits, casing pipes, etc.)
  6. Selling drilling chemicals, corrosion inhibitors and oil and gas materials (e.g. barite, bentonite, sodium chloride, uniform, coveralls, safety boots, gloves, etc.)
  7. Finance and insurance services.
  8. Legal and IT services.
  9. Supply of office materials.
  10. Engineering procurement and construction management.
  11. Wireline services, direction drilling services, well drilling services, maintenance services, etc.

And the list goes on.

2. Register With The Business Registration And Licensing Agency (BRELA)

Once you have identified the services you want to render in the industry, the next step is register with BRELA.

This is imperative because no individual is allowed to bid in the oil and gas sector. It’s only for registered companies. So, do business in Tanzania without getting into a legal trouble. You should register a business name or limited liability company with BRELA.

Registering with BRELA is fast, easy, and cheap, if you meet their qualifications. Here are the requirements to get registered with BRELA:

  1. Memorandum and article of associations.
  2. List of shareholders and directors (their names, address, and date of birth.)
  3. Share distribution.
  4. Share capital.
  5. Name of the company secretary.

3: Get Necessary Licenses And Permits

Now that you have registered your company with BRELA, and BRELA has given you a certificate of incorporation, the next requirement is getting licenses and permits.

But permits and licenses vary depending on the kind of oil and gas activity you intend to do.

If you want to be an oil operator; that is, you buy a gas block for extracting oil and gas resources, the agency responsible for such permit is Tanzania Petroleum Development Corporation (TPDC).

If you want to be a contractor (those who want to provide engineering, construction, mechanical services, and other technical jobs), you shouldyou’re your permit from the Contractor Registration Board (CRB).

For suppliers and consultant, get a permit from the Regional Trade Office.

Bonus: For entrepreneurs who want to setup a lubricant (engine oil) or petrol station business, get a license from the Energy Water and Utility Authority (EWURA).

4. Register With Oil And Gas Companies You Want To Work With

Now that you have a license to operate in Tanzania oil and gas sector, the next step is to register your name with international oil and gas companies as a vendor (contractor or supplier.)

5. Win Your First Contract

The most challenging task in the Tanzanian oil and gas industry is getting your first contract. This is because nobody wants to be the first customer. But sometimes you need only one customer to grow fast in the industry.

To grow fast in the industry, alliance, partnership, and joint venture across the country with experienced international oil and gas contractors is necessary.

Attend conference trade shows and join Tanzania oil and gas associations.

This will enable you to learn how to do business with large oil and gas companies in Tanzania and increase your contacts.

What Are You Waiting For?

Now you know the requirement to  start  the oil and gas business in Tanzania. If this interests you then it is time take all necessary steps to make this reality.  You can do this if you commit yourself to your own success.