By Anaclet Rwegayura
Uganda has just embarked on the development phase of its budding oil industry, with production planned to start in 2020. The country has so far discovered 6.5 billion barrels of oil resources in 40 percent of the explored area in the Albertine Graben.
Construction of the proposed 1,445 kilometer (897 miles) long pipeline is due to commence early next year. From Hoima in western Uganda to the Tanga sea port in Tanzania, it is designed to carry 216,000 barrels of crude oil to the international market daily. Along this trailblazing project, Tanzania could lay another pipeline to ferry its gas to Uganda and other adjacent countries in the future.
Every day the African landscape tells a new story through constant activities to increase energy security. But two-thirds of all people in sub-Saharan Africa still face an energy crisis.
According to the World Energy Council, natural gas is the third largest fuel source in the global primary energy mix and the second largest source in power generation, contributing 24 percent and 22 percent to those markets respectively.
Production of natural gas and oil in the East African Community (EAC) partner states should open the window for implementation of other regional integration projects that have been on hold for years. These countries need to step up their collaboration, not just in improving energy security, but also in communication, transport and other areas to help contribute to the transformation of their economies.
Gas-rich Tanzania hosts a two-day congress beginning September 11, aimed at bringing together policymakers and experts in the oil and gas industry. But the country needs to pick its strategic partners carefully.
For ages, Tanzania’s rich underground wealth was unknown. That has kept it safe for the present generation, which needs it to eradicate poverty.
Many prospectors and investors have crisscrossed the country after the government opened the door to mineral extractors, and it seems that many thought the country’s wealth was up for grabs.
Did it ever come to their minds that Tanzania was hoping to capitalize on its resource endowments in order to kick-start its industrialization?
Given the country’s healthy economic turnaround with a roughly seven percent annual growth rate, the Tanzanian government is keen to see productive investments taking place. Extractive investors, who cannot enable the country to create wealth and free the local society from the shackles of poverty, are not welcome.
Developments and opportunities
For two days beginning on September 11, representatives of international oil companies, indigenous producers, international and national service providers, financiers and consultants will meet in Dar es Salaam with Tanzanian policymakers and experts in the oil and gas industry to discuss, among many other issues, the implementation of the country’s gas master plan.
According to congress organizers, the UK-based CWC Group, this will also be the opportunity to discuss business opportunities in the Tanzanian energy market.
On the road to an industry-led development, Tanzania should by all means avoid stepping into the unknown. That’s why it requires strategic partnerships to promote its natural gas sector.
With proven natural gas reserves of 57 trillion cubic feet, at least 49.5 trillion cubic feet of which are far offshore in the Indian Ocean, the country has already entered the world of energy giants.
However, Tanzania faces major challenges in terms of investment, skilled manpower, infrastructure and processing technologies, as well as environmental, occupational health and safety rules required for the industry.
Gas explorers in the country believe that the resource base discovered so far will keep growing with continued drilling offshore and on the mainland.
Hopefully, this inaugural congress on Tanzania’s gas industry will not just discuss opportunities and suggest solutions for the major challenges the industry faces, but also intensify genuine partnerships for the country to stay ahead of the game.
Participants in the congress should be well informed about Tanzania’s newly promulgated laws that many analysts say have altered the mining investment landscape. Historically, the country has been a preferred investment destination, as one observer remarked, “owing to its geological endowment and predictability.”
At the congress, Tanzania’s Ministry of Industries, Trade and Investment is set to explain fiscal incentives and guarantees for investment as well as priorities in the energy sector.
Organizers say the event will offer participants invaluable networking opportunities with government representatives and industry stakeholders from neighboring countries including Uganda, Mozambique, Kenya and Democratic Republic of Congo.
The writer is a veteran Tanzanian journalist.