Emerging economies with rising populations like Tanzania and East Africa demand more energy.

Increasing international investments is also essential for oil and gas drilling projects in Tanzania and East Africa. Causing oil and gas companies to seek expansion of their access to resources.

Currently, there is a lot of hype surrounding the idea of alternative forms of energy. Although it may lessen the demand, oil and gas products will remain the primary energy source in Tanzania and East Africa. And thereby creating strong demand for drilling in the region.

Oil and Gas Drilling Opportunities,
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1. Deep Water Drilling. Following the massive natural discovery offshore Tanzania in 2010, deepwater drilling is beneficial and more profitable to oil and gas companies than drilling in shallow water. The target customers for this service are the largest oil and gas companies with high revenue and can afford high day rates. With superior equipment, capabilities, and specialization in deep water drilling, this can be a lucrative opportunity in Tanzania and East Africa.

2. Inland and Shallow Water Drilling. Several independent small oil and gas companies have discovered oil and natural gas on land. These smaller oil and gas companies with less revenue generally focus on production on the jack-up rigs in shallow water and Inland.

3. Equipment: Other lucrative opportunities is the provision of equipment, including drillships, jacks ups, submersible rigs,

4. Offering complimentary Services: You can take opportunities to become a provider by providing seismic survey services or geologists to evaluate the results of these survey
data to clients. Most oil and gas companies in Tanzania value efficiency. So by offering additional services, it helps you grow revenue and help clients get more things done by contacting fewer agencies

Currently, there is a lot of hype surrounding the idea of alternative energy transportation technology like electric cars and compressed natural gas vehicles (CNG).

But they will not displace the demand for diesel and petrol stations.

Although it may lessen the demand to some extent, in the foreseeable future, petroleum products will continue to be the primary energy sources in Tanzania and Africa. The need for diesel and petrol stations will always be there.’

In recent years and as predicted for the future, the demand for petroleum products in Tanzania and East Africa has been higher than ever. The region requires a high level of investment for suppliers to keep up.

Three events in the last few months indicate the start of a new international oil and gas rush to East Africa.

In April 2021, TotalEnergies, CNOOC, Tanzania, and Uganda signed agreements to develop Ugandan Kingfisher, Tilenga projects and the cross-country East African Crude Oil Pipeline (EACOP)project. This agreement includes Host Government Agreement, the Share Holding Agreement, and the Tariff and Transportation Agreement for the EACOP.

In February 2022. TotalEnergies, China National Offshore Oil Corporation (CNOOC), Uganda National Oil Corporation (UNOC), and state-owned Tanzania Petroleum Development Corporation (TPDC) announced FID, which indicates a giant stride for Uganda’s path towards first oil, which is expected in 2025.

In June 2022, Anglo-Dutch Shell,Norway’s Equinor, and Tanzania signed a framework agreement to implement a $30bn LNG export project, signaling a significant achievement in Tanzania’s path to reach the final investment decision on the project, which is expected in 2025.

For quite some years, many investors and companies have been aware of East Africa’s potential. But the rest of the world realizes immense opportunities exist in Tanzania’s oil and gas plays.

1.EACOP: The EACOP will require a USD 3.5-billion investment for a 1,440-kilometre, 216,000-bopd capacity pipeline that will export crude oil from Kabaale in western Uganda to the port of Tanga. The EACOP will be the world’s longest electrically heated crude oil pipeline, allowing the transportation of Uganda’s high-viscosity oil. The pipeline will be managed by the EACOP Company, formed by operator TotalEnergies (62%), UNOC (15%), TPDC (15%) and CNOOC (8%).

In May 2022, Bolloré Logistics announced it had been selected as the main logistics contractor services for the EACOP. The project’s materials and equipment will be discharged in Dar es Salaam, Tanzania, and transported to different locations in Tanzania and Uganda. Works involve end-to-end receiving, storage, handling, and transportation of hundreds of thousands of cubic meters of cargo, including over 80,000 joints of 18-meter line-pipe, multiple heavy-lift operations, break-bulk, and containerized cargo transportation.

Other contractors for the project include China Petroleum Pipeline Engineering for the construction of the pipeline, feeder line, and aboveground installations; the Daqing Oilfield Construction Group for the construction of the terminal and tanks; SNEF-Schneider for electrical instrumentation and control of telecom security; BBN for construction of the jetty; and ISOAF Tanzania for provision of the thermal insulation of the pipeline. Engineering firm Worley is in charge of the engineering, procurement, construction management and commissioning.

In July 2022, the operating company submitted a request to the government of Uganda to begin pipeline construction activities. According to Uganda’s Ministry of Energy and Mineral Development officials, the submitted application was to be approved before the end of 2022.

2.TILENGA: The Tilenga Project, operated by TotalEnergies EP Uganda, covers three production licenses in Contract Area 1 – Jobi-Rii, Gunya, and Ngiri – and three in License Area 2 North: Kasamene-Wahrindi, Kigogole-Ngara, and Nsoga. The total expected production of these fields is 190,000 bopd.

The project will comprise more than 426 wells with more than 160 kilometers of flowlines connecting the fields to the central processing facility (CPF). The CPF will have a capacity of 190,000 bopd, and will be connected via a 24-inch, 95-kilometer pipeline to the Kabaale refinery.

Major contracts were announced after the February 2022 FID announcement, and contractors were mobilized. Tier 1 contractors include McDermott, Sinopec, ZPEB, Vallourec, and Mota-Engil Uganda. Drilling rigs are currently under construction in China and the first is expected to arrive in the second half of 2022 so that drilling can kick start in December 2022.

In January 2022, GCC Services signed a six-year contract with international engineering and construction company McDermott to provide camp services for the upstream facilities at the Tilenga Project beginning the following month. Works include camp management, catering, and camp support services for the workforce on the project, which is estimated to consist of up to 3,500 international and local workers.

Immediately after the FID was announced, Mota-Engil Uganda was awarded three contracts worth USD 261 million for works on the Tilenga Project. These include two contracts from TotalEnergies for preparing good pads and related infrastructure. McDermott awarded the third contract in consortium with Sinopec for general civil works.

3.KINGFISHER: The Kingfisher project is operated by CNOOC. The Kingfisher Development Area (KFDA) covers the Kingfisher field in the area formerly known as Block 3A, located in the Kikuube district, and there are plans for tie-ins of the Mputa-Nzizi-Waraga fields in the Hoima district. The total production expected from these fields will be 40,000 bopd.

CNOOC obtained the production license for the KFDA in September 2013, and the Environmental and Social Impact Assessment certificate in February 2020. The upstream development will comprise 31 wells to be drilled in four well pads, as well as a 40,000-bopd CPF fed by 19 kilometers of flowlines. Midstream-wise, a 46-kilometer pipeline will connect the CPF to Kabaale.

After the announcement of the FID, Uganda’s Excel Construction kicked off the construction phase at the Kingfisher project involving building well pads, access roads, and water intake points.

The Tilenga and Kingfisher developments, whose combined output is expected to reach 230,000 bopd, will be connected via feeder lines to the UNOC-managed Kabaale Industrial Park near Hoima. The Kabaale Industrial Park will comprise an international airport, expected to be operational during 2023; Uganda’s crude export hub, from which EACOP will start; a 60,000-bpd refinery, whose FID is expected in 2023 and its completion in 2027; and an industrial park.

Due to the economic recovery efforts and increased population, East Africa has recently registered significant demand growth for energy. But how do you invest, and where do you start? This article will help you to know just that.

How do you invest.?

1.Develop business planning and forecasting.
The dangers of making uni-informed business decisions outweigh the cost of collecting market data, researching, and planning. Planning helps you spend time, effort, and money where you have the best chance of success. Also, it will help you understand the viability of the market and opportunities, competitive threats, and trends in the market places; it can also help you convince bankers, partners, and investors that your marketing strategy is viable.

2.Comply with local regulations and standards.
Once you have confidence that your project or opportunity is viable, the next step is acquiring all necessary permits and licenses.

The energy industry is highly regulated in Tanzania and East Africa. So complying with rules and standards is critical to successfully operating your company and project.

First, you must register your company with a government agency responsible for business registration in the country. You employ the service of a consultant or a lawyer to help you prepare a memorandum and article of associations and help you get a certificate of incorporation.

You have to obtain a trade license as well. Based on your nature of business, you should apply for construction permits, get operational licenses from the energy regulatory authority, or even register for national suppliers’ data.

3.Acquire Resources.
The final step is to secure financing,  find competent talents and suppliers and build networks and relationships with customers, suppliers, distributors, consultants, and regulators across the energy industry value chain.

4.Opportunities in the Energy Sector in Tanzania and East Africa

Opportunities in the energy sector are immense, spanning from building smart petrol stations, starting LPG refilling plants, and blending, marketing, and distributing lubricants(motor oil).

Furthermore, there are opportunities in the oil and gas equipment and service sector to support upcoming EACOP pipeline projects, liquefied natural gas(LNG) projects, and ongoing gas productions in Mnazibay and Songo Songo gas fields in the southern part of Tanzania.

I hope this helps.