Ahead of this year’s Official Congress, we interviewed Eng. Charles J. Sangweni, Acting Director General, PURA on his thoughts on prospective investment opportunities in Tanzania and how PURA is working to facilitate new projects in the upstream oil and gas sector.
1. Tanzania is offering a series of opportunities along the oil and gas value chain for international and national investors. As the National Upstream Regulator, what are the main areas Tanzania is offering to investors in the upstream sector?
Activities in the Upstream sector in Tanzania started since 1952, where the first wells were drilled at Mtwara which resulted into no discovery. In 1974 the first natural gas was discovered at Songo Songo, followed by Mnazibay in 1982. In those years this sector was governed by Petroleum (Exploration and Production) Act 1980. Currently we are under Petroleum Act 2015 (PA 2015), whereby opportunities to invest in upstream especially in exploration is through tendering process. We have a petroleum activity map where areas are divided into blocks/areas with high probability of having hydrocarbon potential. During bidding round these blocks are tendered and the winners signs Production Sharing Agreements (PSA) with the Government. The last bidding round was in 2013, and since then no other round has taken place due to recent oil price trend in the world. As of now, PA 2015 provides an opportunity for investors to participate without going through bidding round, whereby an Investor have to partner with TPDC (National Oil Company) to explore in case of potential discovery. The recent earmarked blocks that investors can partner with TPDC are: Songosongo West, Block 4/1B and 4/1C, Mnazi Bay North and Eyasi Wembere.
2. The proven gas reserves for Tanzania are among the greatest in the world. With other LNG projects coming on-stream around the globe, where do you see the biggest opportunities for Tanzania’s gas and LNG?
There are still many opportunities to market Tanzania’s gas and expected LNG globally. Currently, statistics shows that there is more demand of LNG than supply. The projected demand of LNG shows tremendous growth for the next 20 years, which provides a big opportunity for Tanzania’s gas and LNG, unless new LNG production project commitments are made soon. Tanzania’s Gas and LNG can be sold to Asian markets and the Government is creating a regional market through gas pipelines to industries and domestic consumers in East Africa.
3. How is PURA working to attract more oil and gas investors to Tanzania and what are the expectations for investment in the near future?
PURA is currently preparing rules and regulations to regulate the upstream petroleum industry with the purpose of clarifying and simplify all procedures required by the investors from exploration to development of a discovered resource. Through these rules and regulations, PURA will ensure a conducive environment to investors, in parallel to the ruling party manifesto and the Government’s motives towards industrialisation. It is expected that investment will increase once the oil price rises in the near future. Moreover, PURA, as always, is more than ready to warmly welcome oil and gas investors to Tanzania.
4. Local Content is a key component of the oil and gas projects in Tanzania to ensure the maximisation of benefits for the population. How important is Local Content and which areas of business do you think will most benefit from these megaprojects?
Local Content is an aspect of paramount importance for our country’s economy and prosperity. This is due to the fact that employing locals and buying local goods and services create employment, technology transfer, skills/knowledge acquisition and value addition in the country. Whenever local content policy is well implemented and adhered to among players, it will result in a good working environment between the investors and local communities. Moreover, it brings collaboration among investors and local communities; in particular it makes the locals feel the ownership of their natural resources through their participation in providing goods and services, which they sell as well as labor they offer.
I am of the opinion that Local Content should be emphasised in the entire petroleum value chain from exploration to marketing as far as locals are capable to deliver the required standards. In addition, investors should make necessary efforts to train locals and finance them, where possible, so as to meet the required standards.
To ensure the optimum participation of locals in Petroleum value chain, the Petroleum Act, 2015 section 219 and 220 are provision which narrates on consideration of goods and services supplied by Tanzanian entrepreneurs as well as Training and employment of Tanzanians.
5. The 2nd Tanzania Oil & Gas Congress is taking place once again in Dar es Salaam, the 24th & 25th September with PURA fully supporting the event. What are your expectations for this important meeting?
The 2nd Tanzania Oil & Gas Congress is a great platform where petroleum experts and other key stakeholders meet to deliberate ideas, new technologies, and challenges facing the petroleum industry and propose solutions to counter the challenges. It is my expectations that the Congress will be fruitful and full of philosophies that will benefit the petroleum industry, particularly in Tanzania.
For more information on attending the Official Congress, please contact the Africa team on +44 20 7978 0570 or email email@example.com