You don’t have to be a rocket scientist to recognize that the oil and gas have made individual wealthy, brought huge profit to companies and transformed poor countries into rich ones.

Think about Norway, which was one of the poorest countries. But what happened when the country struck oil in 1969.

They nationalized those oil resources. They allowed big international oil companies to extract resources.They received oil revenue. And  they spent the revenue generated from the oil and invest in other sectors of the economy. The rest is history. Today Norway is rich and it is in fortunate economy.

Tanzania is the only country in East Africa with enormous natural gas reserves. As at the time of this writing, Tanzania has discovered 57.25 trillion cubic feet (1.61 trillion cubic meter) of natural gas.

 

And 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.

But the fact is If we develop these gas resources, country will receive billions of dollars in tax  and resources royalties. And use the gas revenue to pay for healthcare, education and another sector of the economy.

 

Also Read.Why Kenya, Uganda and Tanzania Should Set Up Sovereign Wealth Funds

The oil and gas activities have more benefit for the economic growth, it creates employment to our youths. And bring immense business opportunities to the local services providers who in turn will pay the tax.

Oil and gas companies remain sensitive to the citizen’s needs in the area they operate. They work with employees, family, and communities to improve the quality of their life
But if we don’t develop gas resources, the government will miss out billions upon billions of dollars.And chances are, we may be a big loser.

But the stability of legal and fiscal framework is vital to reach such height. Let’s develop our resources for the betterment of the country and its people.

                                                      By Hussein Boffu

                                                     Hussein. Boffu@tanzaniapetroleum.com,

                                                       +255655376543

Oil and gas is the most rewarding sector across the globe. It has created many millionaires and billionaire than almost any other sector, Anybody who run any kind of oil and gas business is perceived as has a loaded of wealth.

But while the industry is lucrative most people are unsure where to begin and what type of business they can do and get a solid return.
So if  you  rack your brain to finding perfect business ideas, here are 15+ oil and gas business opportunities and ideas to exploit in Tanzania and East Africa.

1.Oil and Gas Exploration and Production:

This involves searching for areas where oil and gas resources might be,  extract them and sell them at a profit.
To go into this venture, you should first lease land from the host government. If you strike oil or gas, you will  have profit up to 10 times for what you invested.

Tanzania Petroleum Development Corporation (TPDC) are sole owner of all gas assets in Tanzania. You should approach them and negotiate Production sharing agreement (PSA)

The well estimated to produce gas for about 20 to 60 years. Meaning that you will be receiving the passive  income from the sales of natural gas for over 20 years.

That’s is a main reasons, executives and  investors operate gas producing firms in Tanzania such as shell, Statoil, Swala Energy  the richest guys. Because they earn billion of dollars from the natural  gas sales

But if you drill dry hole means you lose the money . That’s because  you spend years to search for something that you’re unsure whether you’ll find. This is   high risky venture, that is why such investment are by law, available only for investors with knowledge and a lot of money.

 

The preferred market for natural gas in Tanzania are the factories, government agencies like Tanzania Petroleum Development Corporation (TPDC), Tanzania Electric Supply Company Limited (TANESCO). Since the proportion of natural gas produced in Tanzania used for power generation.

The high demand of energy, create huge market for gas production in Tanzania. However, is capital-intensive , requires a lot of manpower and advanced technology, and it may take years to start seeing the return on the investment.

This might be regarded as a risk business, but if you have what I call 3 E’s (Education, experience and excess capital). I gurantee you are going to make it into this venture.

Read            .How To Start Your Own Oil and Gas Exploration Company In Tanzania.Practical Guide

2.Oil and Gas Maintenance and Servicing
This is the profitable niche in Tanzania oil and gas sector. In Tanzania we have gas facilities, pipelines, oil storage facilities, a lot of oil wells which require regular maintenances and servicing. These are reccuring activities in the oil and gas industry and bring a lot of money on the table. If you are business start off in Tanzania I suggest you go to this venture because are the recurring activities in the industry and keep you afloat

However, going to provide these services you must have years of physical experiences in the industry. Because this kind of investment requires expertise and technical know how.

3.Sell oil and gas equipment:

Oil and gas companies involved in searching for and drilling oil and gas need a broad range of equipment and machine.
So by supplying drilling bits, casing pipes, drilling string, pipes valves, just to mention a few.. you stand much chance of reaping a good profit

4: Fuel importation:
Importation of fuel is a lucrative business in Tanzania. However, a solid infrastructure, fuel depot and permit and licenses from Ewura are necessary.
Also, you must be a member of Petroleum Importation Coordinator, which is the company responsible for coordinating petroleum products in the country. Also, they prepare periodic petroleum tender to get the winner of the tender.

5.Oil storage Facility/ Depot
Once the oil is imported, must be kept in the oil farms or storage tanks. The simple truth most of the oil marketers do not own storage facilities now is where they store fuel products to others oil tank farm if you have large operation capital you can build your own oil storage facility and rent it to oil marketing companies.

6.Start a petrol station:

This is a worthwhile investment in Tanzania that ensures a solid return. But it’s capital intensive. The profit margin for this business is mouth-watering. A
profit is not less than Tzs 210 per liter. If you sell 5,000 liters a day, you’ll be making a profit of Tzs210×5000liters= 1,050,000. And that is the lowest profit
you can make after all expenses. But if you land a wonderful major supplier who sells products at a reasonable price you’ll
earn beyond.This is lucrative venture that is why those who import fuel and deport owner they also own petrol stations to maximize profit.

Read also.[eBook] The Complete Guide to Starting a Petrol Station in Tanzania

7.Start petroleum product transportation:

Your job is transporting diesel, petrol, kerosene to various petrol stations, factories and firms across the country.
All you need to go into this business are trucks and drivers.You get petroleum products from the depots.You supply to the retailers on demand. You cash money.
And smile to the bank. Depending on the location product will be taken and the capacity of the tanker. But at the depot today, they will pay you Tzus 100 per liter from Dar es salaam to Mtwara.

For starters with a tank of 18,000 liters, he will get Tzs 1,800,000. And after all expenses, you’ll have a net profit of Tzs 1,000,000. If you get 4 trips in a month, you’ll make a profit of Tish 1,000,000×4 = Tzsh4,000,000. For those who have capitals to buy trucks,

8.Cooking gas wholesale and retail:

It’s a good business for a smart entrepreneur like you to venture into. Why? because we’re no longer in the Stone Age where people cook with logs of wood.
Now simply people buy cooking gas to prepare meals. You may feel the market is already saturated, but you can come in and give it a go. Because the demand increases as the more people become aware that cooking gas is cheap and do not pollute households.

9.Distribution of Lubricants:

The market for this business is huge as the vehicle owners and factories are seriously interested in it. To help their equipment and operation run smoothly, engine oil, automatic transmission fluid, brake fluid, and greases are top selling products in the lubricant market. The preferred market for this business in Tanzania are mechanics and petrol stations. Once you build a strong network of petrol station owners, you will be amazed at the high volume of sales you make.

10.Kerosene retail.

If you still wondering how to make money in the oil and gas you start selling kerosene to the end users. This business has high demand because of the high population of low income earners in Tanzania.
11. Equipment Leasing:
If you have large financial muscles and network, then leasing equipment used in the oil and gas activities are the way to go. Some oil and gas projects involve many construction wokr like pipeline construction. So you lease contruction equipment such as eacacvators,

12.Petrol Station Building And Construction:
You can break into oil and gas via building petrol stations to the people who want to start petrol station business.

13.Start recruitment agency:

On receipt of job orders, and sending oil clients several candidates, oil firms pay you a percentage of individual annual salary based on your agreement. It’s a lucrative business in the petroleum sector, as you serve millions to get into oil and gas companies.

14.Oil and gas consultancy and advisory services:

Do you like to meet new people? Have good communication skills? And oil and gas training? Then you ought to consider helping people in key issue related oil and gas sector. You can offer advisory services to the people who want to break into oil and gas business. Pick an area of your expertise and start consultation business. Also, oil firms want to improve sales too.

15.Run petroleum radio/tv show:

To raise awareness, we must inform Tanzanians about oil and gas industry. Launch your radio/tv show that addresses a key issue in Tanzanian gas. And you make money from oil and gas players who want to advertise their products and services.

16.Oil and gas magazines
If you have some experience in oil and gas and have a writing skills, you can start a magazine to cover the opportunities, projection , trend and out look of the industry and make a living through selling ads space to your magazine

17.Oil and Gas Blog
You can make money on the internet. Once you set up your blog and publish informative articles about the oil and gas sectors, you increase your reputation and position yourself as an oil and gas consultant.
18.Developing Oil and Gas software and application:

The rapid growth of technology industry has led to creating immense opportunities in the oil industry. Fortunately for you, in the petroleum industry, there’s room for improvement. You can either make the operation run safer or save time in operation. If you love computer programming (coding), start building and selling software that best fit the oil business. Are you capable of building software that helps oil and gas operation run safer? If yes, act now and make millions from gas the market.

What To Do Next
Pick one idea that make sense to your situation and personality and go out there make it happen.

Dear reader  I would love to hear your thought on 15+ Lucrative Oil and Gas Business Opportunities and Ideas In Tanzania and East Africa. Let me know your thought by leaving your comment below.

Hussein.boffu@tanzaniapetroleum.com

+255655376543

Tanzania is blessed with various types of minerals ranging from Gold, gemstones, Tanzanite, Ruby, Diamond, Tanzanite, copper Iron just to mention a few.
Tanzania mining industry has contributed 8.5% to its GDP with US$ 960mn in 2017 compared to only 3.09% and a value of US$ 880m in 2016. This rapid markert growth indicates investment is required so can come in and give it a go.

The demand for this mineral is huge and they can be sold to the different places across the globe. Forexample the large quantities of gold produced in Tanzania is exported to South Africa and India India, Switzerland and Australia,

Business Opportunities For Mineral Export In Tanzania
Now, we have seen the market of mineral export in Tanzania, let’s discuss the opportunities in mineral export
1.Metallic minerals. Include gold, iron ore, nickel, copper, cobalt, and silver

2.Gemstone Include Diamond, Tanzanite, ruby, sapphire, married, spinel, alexandrite, tourmaline, zircon, aquamarine, tsavorite, spessartite, rhodolite, demantoid, garnet etc.

3.Industry minerals. Include limestones, soda ash, gypsum, sal;t and phosphates

4.Fuel Minerals  that are coals and uranium

5.Construction minerals include aggregates, gravel, sand and dimension stones

Set Up Your Mineral Export Business In Tanzania- Step by step guide

1.Company formation
To start your mineral export business you should first register a limited liability company with business registration and license agency (BRELA). This is an agency empowered by the government to register all business in Tanzania. Afterwards, you will register with tax authority.

Read.  How To Register Your Business in Tanzania – 5 Steps

2.Get Your Export Permit
Once you have registered you a limited company with BRELA, the next step is to a get a permit for mineral export from the ministry of minerals. The export permit vary on the type of mineral you want to export
Here is the government fee for export dealer license based on different kind of minerals you intend to export.

• Gemstone USD 2000
• Metallic mineral license usd 500′
• Industrial mineral license usd 500
• Broker license $ Tzsh 200,000

3.Give your business professional feel.
Once you have got an export permit based on your demand, then you should set a reputable website for your business. Your register internet domain name and get professional emails that go like this alan@gemstone.com.

Some customers do not want to deal with business that looks untidy or those use emails associated with “Gmail” or “ yahoo” because they looks are unprofessional.But set up an international standard website give the customers confidence that you are the right person to do business with.

Also Read.How To Become A Contractor In Tanzania

4.Export Your Products.
Once you have sign the sales and purchasing agreement with your buyer the next step is to export your materials to buyers

          Risk Associated With Mineral Export Business
Every good business its setback must be the potential risks in minerals export business are:

• Meeting with buyers who have insufficient fund for the business.
• Lack of experiences in the market lead to overquote or underprice and in most cases, dealers can buy the wrong specification of the minerals.
• A large number of untrustworthy exporter this make difficult for buyers to trust you.
• Wastage of time making too long conversation with the customers who do not. have money to buy or they just researching the business.

Dear reader  Iwould love to hear your thought on How To Start Minerals Export From Tanzania To International Buyers. Let me know your thought by leaving your comment below.

To reap substantial reward from the many prestigious projects emerge in Tanzania, becoming a contractor is the wise decision to pursue. No wonder
If you have expertise and some physical experience, the set up your contractor business would help you make the most of the opportunity in Tanzania

Who Is A Contractor?
A contractor is any person/ business with the capability to perform contract work such as fixing electrical system, construction of roads, building, welding the pipelines and so on.

Decide Kind of Contract work you want to be involved
There are five contractor specializations in Tanzania. So the first thing first is to figure out the type of contract work you want to perform. For example in Tanzania, you can choose from these types contractor specializations:

1.Building Contractors
2.Civil Works Contractors
3.Mechanical Contractors
4.Electrical Contractors
5.Specialist Contractors

Determine the type of license Classes
The next step is to determine the kind of classes you want to involve. Pick the classes should be done with careful handling because these classes are the restricted to the specific project. For a class one contractor is allowed to perform all contractors work in their specializations. But the person who picks class three or four is limited to a specific project. Also, the tax rates are higher as you take a high class. If you are someone starts out I suggest you go for lower classes such as six or five classes
Foreign contractors are restricted only to opt class one and two. Here are the classes for a contractor in Tanzania.
Class one Class two, Class Three Class four, Class Five, Class 6, Class Seven

Identify the Category of Contractor
Once you have determined your contractor specializations, you should identify the categories of contractors in Tanzania. Here are the categories
1. Local contractor
2. Foreign Contractor

Local contractors – Are the kind of contractors in which Tanzanian citizens have the biggest stake in the company. Otherwise will be regarded as foreign contractor

Requirements To Become A Contractor In Tanzania
Any person with a desire to perform contract works in Tanzania must register with contractor registration board (http://crb.go.tz) This is an agency empowered by the government to register all types contractors in Tanzania
• Such a person has a Certificate of Registration from the Registrar of Companies either as a Limited Company, partnership or sole proprietorship.
• In the case of Limited Liability Company, the Certificate must be accompanied with a certified copy of Memorandum and Articles of Association.
• Partnership and sole proprietorship firms must submit certified copy of Extract from the Registrar of Companies
• At least one of the shareholders or partners must have the minimum technical qualifications stipulated in Schedule and should not be employed elsewhere.
• The Board will review the curriculum vitae of each shareholder or partner as the case may be to ensure that they are persons of the good profession and general conduct.
• The registration of Partnership and Sole Proprietorship are limited up to class six only.
• Procedure for Registration or Upgrading of Contractors
Conclusion
Those are the basic requirement to become a contractor in Tanzania. However, to complete all the process need dedication and patience as it is little time-consuming. Depending on the classes you will choose Before you granted a license, the official from contractor registration board (CRB) they will visit your offices to inspect whether you have the equipment required to perform that type of contracts
http://crb.go.tz

 

What are your thoughts on how to become a contractor in Tanzania? Let me know by leaving a comment below.

A lot has been done. The host countries have signed the Inter-government agreement (IGA). And the USA based firm, Gulf Interstate Engineering (GIE) has finished the Front-End Engineering Design (FEED) study for the East African pipeline project.

The EACOP construction work will begin shortly once the final Investment decision (FID) is reached. The key question is who benefits from this prestigious project? Here are the beneficiaries of the proposed East African pipeline project.

1.Companies
The East Africa Crude Oil pipeline provide enormous opportunities for international and indigenous s service providers seeking to offer services and goods in the project. Service provider will benefit by getting business that will increase profit margin to the companies as the project provides vast opportunities across different sector of economy.

Read.Seven Reasons To Start A Petrol Station Business In Tanzania

2.Individuals
The individual will benefit from the job opportunities emerge in East African crude oil pipeline project. The EACOP will hire approximately 10,000 during the construction phase. This includes skilled workers, semi-skilled workers, and casual workers.

During the construction phase of the proposed EACOP project, indigenous casual workers will be employed from each district the pipeline passes. So this will improve the development of local capacity through technology transfer. Also, the proposed EACOP will create short-term employment of about 2- 3 years. Example of jobs that will be created are welders, heavy equipment operators, truck drivers, mechanics, site engineers, construction manager, construction laborers and more.

Also Read.New Opportunities In The East African Crude Oil Pipeline(EACOP)

3.Host Countries
The proposed EACOP project will have long-term economic benefit for Uganda and Tanzania specifically during construction phase include:

•  Improvement of Infrastructure through the construction of new access roads, bridge and also upgrading existing ones
• The 3.5 USD investment of the EACOP construction will be the major source to increase direct foreign investment in both countries by 60 percent
• Improving GDP for both countries through taxes
• Also, the EACOP project will attract more investors for the exploring oil and gas resources in the countries.
• The increase of logistic activities in Tanga port in Tanzania. Also, the Tanga port will experience more US 600 million direct investments in establishing new jetty, storage tanks, and supporting facilities.

4. Communities
The local communities along the EACOP route will benefit from various training and education program such as road safety, welder training. Also, the small towns along the pipeline’s path are likely to experience the local business boom as those working on the pipeline will stay, in the construction camps, local hotels, drink in local bars. And spend money on the entertainment.

 

Will You Gain Or Lose Once The EACOP Project Go Forward?

Opportunities are abundant in the proposed East Africa crude oil pipeline (EACOP) project that you can venture into your irrespective profession. But power goes to those who can uncover and monetize those key opportunities at a rapid pace. The sad reality is that you are going to be left behind if you would not utilize key opportunities emerge in the project.

By Hussein Boffu

 Hussein. Boffu@tanzaniapetroleum.com

 +255655376543/ +255768183677