East Africa is quickly becoming the hottest hydrocarbon destination of the 21st century. But hold on! This thrilling success didn’t happen overnight; it’s the result of six decades of exploration ups and downs. Here’s how this region transformed from a forgotten frontier into a booming oil and gas hub.

A Century-Long Odyssey: The Exploration Saga

It all kicked off in 1920  when Anglo-American launched the Dudley Expedition into Abyssinia. But it wasn’t until the 1950s that serious exploration took flight, especially in Uganda and the Eritrean Red Sea, where the first whispers of oil sparked excitement.

1950s: The Hopeful Beginnings

Picture this: post-WWII optimism sweeping the globe, and East Africa bursting with potential. Sinclair Oil set its sights on Somalia and Ethiopia, hoping to uncover the next Ghawar—Saudi Arabia’s oil wonderland. They drilled **36 wells** and found some glimmers of hope, but the true treasure remained hidden.

1960s: A Rising Interest

The exploration vibe continued in the 1960s, with 40 wells drilled** and big names like BP and Shell joining the fray. Yet, the elusive oil shows kept slipping through their fingers. Despite hopeful gas flows, commercial discoveries were still just a dream.

1970s: The Giants Arrive  

With oil prices soaring, the 1970s brought a wave of oil giants—think Chevron and Total. **27 wells** were drilled, and while Tanzania celebrated the Songo Songo gas discovery, Ethiopia’s potential was stifled by political chaos.

1980s: The Oil Price Rollercoaster  

Fueled by soaring prices, exploration hit a peak. 58 wells were drilled, yielding notable gas finds in Kenya and Somalia, but many dreams ended in disappointment.

1990s: The Tough Times. 

The oil price crash rocked the industry. Somalia and Ethiopia faced local upheaval, leading to a mere **4 wildcat wells** being drilled. The promise of oil remained, but so did the challenges.

2000s: Uganda’s Awakening 

A new dawn emerged in the 2000s. As oil prices rose, Uganda’s Lake Albert Basin became a beacon of hope with the Mputa-1 discovery. Suddenly, East Africa was back on the map, and the excitement was palpable!

The Explosion of Discoveries After 2010.

Fast forward to 2010, and East Africa was buzzing with exploration, drilling **95 wells** by 2013. Major discoveries poured in from Kenya, Uganda, and Tanzania, turning the region into a hydrocarbon goldmine.

– Uganda transformed into an oil powerhouse with a series of successful discoveries.

– Kenya’s Ngamia-1 in the Lokichar Basin was a game changer, opening doors to even more finds.

– In Tanzania, deep-water discoveries hinted at untapped gas potential that could reshape the energy landscape.

The Road Ahead: A Promising Future.

Today, East Africa isn’t just a pin on the hydrocarbon map; it’s a rising star with immense potential for further discoveries. The economic benefits could be transformative, but with great excitement comes high expectations that must be managed wisely.

The exploration saga of East Africa teaches us valuable lessons: initial results can be deceiving, and the geological similarities across the region might lead to even more significant finds in the future.

As we look ahead, one thing is crystal clear: East Africa’s story is just beginning, and the world is watching! Get ready for an exhilarating ride in the emerging hydrocarbon province of the 21st century!

 

Table of Contents

1. How the Oil and Gas Supply Chain Really Works
2. Understanding Tanzania’s Downstream Petroleum Product Market
3. Top Petroleum Products in Tanzania
4. Key Activities in Tanzania’s Downstream Sector

– Importation

– Storage

– Transportation

5. Marketing Channels in the Downstream Sub-sector

– Wholesale Activities

– Retail Activities

6. Regulatory Frameworks in Tanzania’s Oil and Gas Industry
7. Investment Opportunities in Tanzania’s Petroleum Sector

– Bulk Petroleum Operations

– Hospitality Services

– Petroleum/Fuel Transportation and Logistics Services

– Wholesale Petroleum Products

– LPG Refilling Plant

– LPG Bulk Trucks/Tankers Investment

– LPG Storage Plant

– LPG Distribution Business

How the Oil and Gas Supply Chain Really Works

Most People Don’t Get It: The Oil and Gas Supply Chain Explained!  

The oil and gas industry is divided into three main sub-sectors: upstream, midstream, and downstream. Each plays a unique role in bringing energy from the ground to your gas tank.

1. Upstream: This is all about finding and extracting oil and gas. Think of them as the treasure hunters of the energy world, often called exploration and production companies.
2. Midstream: These guys handle transportation and storage. They get the oil and gas from the extraction sites to where it can be processed.
3. Downstream: This covers everything from refining to marketing and distributing the final products like gasoline, diesel, and other petroleum-based goods.

Understanding Tanzania’s Downstream Petroleum Product Market: What’s Happening in Tanzania’s Petroleum Market?

In Tanzania, the downstream market focuses on three main activities: importing, storing, and distributing petroleum products like diesel, petrol, kerosene, LPG (liquefied petroleum gas), and lubricants. This sector ensures that these products are available where and when they are needed.

 Top Petroleum Products in Tanzania: Diesel Is King! Here’s What’s Hot in Tanzania’s Petroleum Market.

Diesel tops the list as the most consumed petroleum product in Tanzania. According to EWURA, diesel consumption shot up by 7% in 2018. Lubricants and LPG are also in high demand, while kerosene and heavy fuel oil are seeing a decline due to the rise of alternative power sources like natural gas.

Key Activities in Tanzania’s Downstream Sector

Importation: Where Does Tanzania Get Its Oil?

Tanzania is rich in natural gas but doesn’t produce oil. All petroleum products are imported, primarily through the Dar es Salaam port. These imports are then distributed locally and to neighboring countries like Rwanda, Burundi, DRC Congo, and Uganda.

Storage: Keeping the Oil Safe and Ready

Storage facilities in Tanzania are owned by oil marketing companies (OMCs) and the Tanzania International Petroleum Reserves Limited (TIPER). Access to these facilities is regulated, ensuring security and efficiency in storage operations.

Transportation: Getting Petroleum Products to You

While there are various methods to transport petroleum products, road transportation is the most common in Tanzania. It’s not the safest, with risks like illegal product mixing, but it’s widely used.

Marketing Channels in the Downstream Sub-sector

Wholesale Activities: Selling in Bulk

These involve buying petroleum products in bulk and selling them to large customers like power plants, factories, and government agencies.

Retail Activities: Direct to Consumer

This includes selling products like diesel, kerosene, LPG, and lubricants directly to consumers through petrol stations and private shops.

Regulatory Frameworks in Tanzania’s Oil and Gas Industry: Who’s in Charge? Understanding the Rules?

The Energy Water and Utilities Regulatory Authority (EWURA) oversees Tanzania’s downstream sector. Companies must obtain licenses from EWURA to operate, ensuring compliance with industry standards and regulations.

Investment Opportunities in Tanzania’s Petroleum Sector

 1.Bulk Petroleum Operations: Import, Store, Distribute

Import, store, and distribute petroleum products to both commercial customers and retail stations.

2.Hospitality Services: Storage Solutions

Provide storage services for companies that need to store petroleum products but lack facilities, charging them per cubic meter.

3.Petroleum/Fuel Transportation and Logistics Services: Road Transport

Engage in the road transport of various petroleum products across Tanzania.

4.Wholesale Petroleum Products: Selling in Bulk: Sell petroleum products like diesel and petrol in bulk.

5.LPG Refilling Plant: Meeting Regional Demand: Set up small LPG filling plants in underserved regions, capitalizing on the rapid growth in LPG demand.

6. LPG Bulk Trucks/Tankers Investment: Transportation Opportunities: Invest in bulk trucks for transporting LPG, meeting the rising demand in Tanzania and neighboring countries.

7.LPG Storage Plant: Multiple Income Streams: Build a storage plant to receive, store, and distribute LPG to commercial customers and partners, including export opportunities to landlocked countries.

8.LPG Distribution Business: Reaching Households and Businesses: Sell LPG to households and commercial customers like restaurants, leveraging the growing demand.

Ready to Invest? Tanzania’s Downstream Petroleum Market Awaits

From bulk operations to small LPG plants, the opportunities are vast and lucrative. With the right investment and strategic planning, you can tap into this growing market and reap substantial rewards.

Energy fuels our world, driving economies and improving lives. Yet, when it comes to cooking energy—a basic human need—many East African countries are still heavily reliant on traditional sources like fuelwood, charcoal, and kerosene. These methods are not just outdated but harmful, contributing to deforestation, respiratory diseases, and climate change.

The Case for LPG

Liquefied Petroleum Gas (LPG) is the clean, efficient alternative that East Africa desperately needs. According to Eng. Amos Jackson Mwansumbule, Executive Director of Tanzania LPG Association, LPG stands out for its lower pollutant emissions and higher energy content compared to biomass. It also offers convenience: no more soot, quicker cooking times, and portable cylinders that reach even the most remote areas.

The Current State.

Despite these benefits, LPG adoption in rural East Africa is lagging. Research from the African Insight Advisor Organization (AIAO) in 2022 reveals that only 1% of rural households use LPG, compared to 54% in urban areas. Why the disparity? Limited accessibility, low awareness, and affordability issues are major barriers.

A Growing Trend.

LPG consumption is on the rise in East Africa, especially in Kenya, Tanzania, and Rwanda, with annual growth rates around 15%. However, the per capita consumption in the region still pales compared to North Africa, where it’s over 20 kg per person annually. Kenya leads with about 6 kg per person, while Tanzania and Rwanda hover around 2.5 kg, and Uganda and Burundi are below 2 kg.

Overcoming the Challenges.

The roadblocks to higher LPG usage include inadequate infrastructure, low consumer awareness, and high import costs. Governments, private sectors, and stakeholders must unite to overcome these hurdles. Eng. Mwansumbule emphasizes that governments need to implement effective policies, remove taxes, and invest in infrastructure to boost LPG adoption.

A Call to Action.

Governments should also consider the long-term cost benefits of subsidizing LPG prices versus the expense of treating air pollution-related illnesses and managing environmental damage caused by biomass. If it costs less to subsidize LPG than to address the fallout from dirty fuels, then the choice is clear.

The Bottom Line.

For East Africa, the time to embrace LPG is now. With the right policies and investments, LPG can replace harmful biomass sources, improving health, protecting the environment, and making cooking safer and more convenient for millions.

Meet Jackson Bennedicto Nyamussa, a Tanzanian entrepreneur who transformed a massive setback into a booming business success. After losing Tzs 80 million in a failed poultry venture—thanks to a slew of disease-riddled birds—Jackson was on the lookout for a fresh start. And guess what? He found it in the world of petrol stations.

“I was devastated after losing everything in poultry,” Jackson recalls. “But when I stumbled upon insights about starting a petrol station, I knew this was my chance.”

 

Armed with knowledge from industry publications, Jackson launched Otto Oil, his very own petrol station. And it’s not just surviving—it’s thriving. Jackson’s station now sells between 2,500 and 3,000 liters of fuel every single day. How did he pull it off on a tight budget? Here’s how:

1. DIY Construction: Jackson and his team took a hands-on approach, building parts of the station themselves, like the canopy and storage tanks. This DIY attitude saved them a ton of cash.

 

2. Affordable Equipment: Instead of splurging on high-cost equipment, they sourced their gear from China, cutting costs significantly without compromising on quality.

Of course, the road hasn’t been entirely smooth. Jackson’s station is in close proximity to big multinational companies with deep pockets and extensive experience. But that hasn’t stopped him. “The competition is fierce,” Jackson admits. “But we’re getting better every day.”

 

What drives Jackson? It’s a blend of ambition and a desire to give back. “I want to be independent, create jobs, and contribute to our growing youth population,” he says.

Looking to the future, Jackson has big dreams. “I’m aiming to build a nationwide chain of petrol stations and expand into LPG distribution,” he reveals.

From a financial disaster to a thriving enterprise, Jackson’s story is a testament to resilience and vision. Who knows what the future holds, but one thing’s for sure—Jackson Bennedicto Nyamussa is on the path to greatness.