Türkiye and Somalia solidified their close relations with the signing of a significant energy agreement in Istanbul on Thursday. The accord was inked by Türkiye’s Energy and Natural Resources Minister Alparslan Bayraktar and Somalia’s Petroleum and Mineral Resources Minister Abdirizak Omar Mohamed.

Minister Bayraktar announced that Türkiye would dispatch its research vessel, Oruç Reis, for seismic studies off the Somali coast later this year, marking a pivotal step in bilateral cooperation.

Highlighting Türkiye’s advancements in the energy sector over the past eight years, Bayraktar noted the country’s achievements in natural gas exploration, including major discoveries in the Mediterranean and the Black Sea, and the increasing production from the Sakarya Gas Field and the Gabar oil field in southeastern Türkiye.

“Our country’s needs are expanding, necessitating more active engagement in both domestic and international exploration,” Bayraktar said, as quoted by public broadcaster TRT Haber. He emphasized Türkiye’s strategy to partner with other nations in oil and gas exploration through its national companies.

The latest agreement builds on a deal signed in March for offshore oil and natural gas cooperation, following a defense pact earlier this year. This new Hydrocarbon Exploration and Production Agreement between the Turkish Petroleum Corporation (TPAO) and the Somali Petroleum Authority will see TPAO undertake exploration activities in three blocks within Somali maritime territories.

Bayraktar detailed that two of these blocks are approximately 50 kilometers offshore, with the third located 100 kilometers out. The initial phase will involve 3D seismic activities, slated to begin with the deployment of Oruç Reis and support ships by late September or early October. These operations will involve drilling activities up to 7 kilometers from the sea’s surface, requiring a specialized team of around 50 personnel and five support vessels, accompanied by naval forces.

The Turkish minister expressed optimism about potential discoveries resulting from these studies, stating, “We hope that this work will result in a discovery after drilling.”

Earlier this year, Türkiye and Somalia also signed a defense and economic cooperation agreement, with Türkiye committing to bolster maritime security for Somalia. Türkiye has been a key ally to Somalia, investing in various sectors including education, infrastructure, and health, along with providing substantial humanitarian aid.

The strategic energy partnership marks another chapter in the deepening relations between Türkiye and Somalia, promising mutual benefits and enhanced cooperation in the hydrocarbon sector.

 

Uganda has discovered over 1.4 billion barrels of oil (Bbo) in recent years, with multiple giant fields contributing to this wealth. This article traces the history of hydrocarbon exploration in Uganda and its advancement toward first oil.

Exploring the East Africa Rift System.

Tullow Oil’s exploration efforts have made the East African Rift System a focal point since significant discoveries in the Lake Albert Rift Basin began in 2006. This success has led many explorationists to ponder the location of the next major find. The Lokichar Basin in Kenya’s East Africa Rift System emerged in 2012, but that is a different narrative.

Oil seeps around Lake Albert and Lake Tanganyika have been known for over a century, first sampled by early geologists. The 1930s and 1940s saw shallow wells testing these Tertiary rifts, but interest dwindled until Chevron’s success in Sudan’s Cretaceous rift basins reignited interest in the 1980s and ’90s.

Pioneers like Amoco and Shell drilled several wildcats, including Loperot-1 and Eliye Springs-1, with limited success. However, the early 21st century marked renewed interest, particularly around Lake Albert, spearheaded by Tullow Oil alongside Heritage Oil, Energy Africa, and Hardman, later acquired by Tullow and sold partially to Total and CNOOC.

Significant Discoveries in the Lake Albert Basin.

Lake Albert features numerous natural oil seeps onshore and offshore, the latter identified by Synthetic Aperture Radar (SAR). Over 20 separate discoveries have been made, primarily syn-rift in nature. Key discoveries include Mputa, Waraga, Nzizi, and Kingfisher, with the remaining finds located in the Victoria Nile Delta play.

The basin’s success hinges on a prolific Miocene-age Type I/II lacustrine source rock. The rapid and recent hydrocarbon migration has been facilitated by excellent Pliocene-Miocene reservoir sequences and frequent extensional faults. Initial seismic data, recorded by Heritage Oil and Energy Africa in 1998, paved the way for subsequent discoveries. Wells such as Waraga-1, Mputa-1, and Kingfisher-1 marked the first significant flows of oil, demonstrating the potential of Uganda’s oil reserves.

Seismic Data and Drilling Success.

Early seismic surveys, particularly 2D data, were crucial in identifying promising structures such as Ngassa and Kingfisher. The light rig Eagle Drill, mobilized in 2005, led to significant discoveries, including Mputa-1 and Waraga-1. By 2007, Tullow Oil had commenced appraising these fields, acquiring more seismic data and making further discoveries like Ngassa.

The Victoria Nile Petroleum Play.

The northern Lake Albert Basin, near the ‘Paraa’ oil seep in Murchison Falls National Park, revealed a new play type similar to the Brent province of the Northern North Sea. This area, characterized by tilted fault blocks and high-amplitude seismic anomalies, proved fruitful with discoveries such as Kasamene-1, Ngege, and Kigogole.

Key Discoveries and Commercialization.

Kasamene-1 confirmed the existence of high-quality reservoirs with excellent porosities and permeabilities, de-risking multiple discoveries in Blocks 1 and 2. Subsequent finds at Ngiri-1 and Jobi-1, among others, cemented the commercial viability of Uganda’s oil. By 2009, over a billion barrels had been discovered, setting the stage for commercial production.

The pioneering efforts by entities like Uganda’s Petroleum Exploration and Production Department (PEPD), independents such as Hardman, Energy Africa, Heritage, and Tullow Oil, and major oil companies like CNOOC and Total, are poised to bring Ugandan crude to the global market. This will drive substantial investment and positively impact the lives of Ugandans.

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.