OIL AND GAS SECTOR IN TANZANIA

Introduction
The oil and gas industry in Tanzania is an important sector of the country’s economy, absorbing on average 55% of the country’s foreign exchange earnings, mainly in the downstream operations.
The two key government entities involved in the upstream industry are the Ministry of Energy and Minerals and the Tanzania Petroleum Development Corporation (TPDC).
In addition to upstream activities, the Ministry of Energy and Minerals is also responsible for downstream, the electricity sector and mining.
TPDC was set up in 1969 and its responsibilities include oversight of the upstream sector, as well as commercial participation as formal holder of exploration and production licenses and direct participant in Production Sharing Agreements (PSAs).

Market Trend
The government is currently encouraging upstream operation in order to develop the country into an oil and gas producer. Tanzania, with its oil seeps, seismic and other data, shows strong hydrocarbon potential in its upstream oil industry sector. As only 20 wildcat exploration and 8 development wells have been drilled in a 222,000 sq km area, Tanzania can be classified as underexplored.
In terms of gas, Tanzania has in a short period of time became the main focus of attention as a source of new global gas supply. The country has a huge proven natural gas reserves estimated to be 2.7 trillion cubic feet (tcf).  With this amount of discovered natural gas, the Government of Tanzania and other International Oil Companies have started the construction of Liquefied Natural Gas (LNG) plant to facilitate the export of natural gas by 2025.

Among the opportunities to explore in Tanzania oil and gas sector are:
(i) Construction of oil and gas pipeline.
(ii) Supply of materials such as pipes and tubes.
(iii) Supply of specialty chemicals such as corrosion inhibitors additives and chemicals that reduce paraffin build up.
(iv) Supply of equipment for manufacturing oil and gas. These includes drill bits, drilling pipe, drilling motors, derricks, valves, portable rigs, well monitoring instruments, tubing, wellheads, blowout preventers, wireline systems, and oil and gas separators.
(v) Studies and surveys to provide geophysical data. This data is crucial in the oil and gas sector and requires experts in this field so as to produce good results. This involve information gathering, data interpretation and analyses, mapping and collection of both surface and subsurface information
(vi) Pipe inspection and testing services. After the installation of pipes is completed, there is a need to undertake inspection on whole projects to ascertain if its satisfactorily completed.
(vii) Transportation and storage tanks. Oil and gas are highly flammable and requires special transport vehicles and special storage tanks.
(viii) Supply of domestic manufacturing of LPG cylinders, valves and regulators, installation of filling plants, retail distribution and development of simple, flexible and less expensive gas burners.

Conclusion
Tanzania’s vision is to become an industrialized middle-income economy by 2025. The government is banking on gas as the main source of energy for electricity generation, which is part of its national vision 2025. Therefore, there will be a lot of opportunities in the gas related projects for Malaysia’s upstream and downstream players to explore and get involved.

For more information, please contact MATRADE Nairobi at nairobi@matrade.gov.my