Experts within the sector say that further investment in exploration activities to discover more gas will put Tanzania in a position to supply other lucrative markets. They say that the country has potential and capacity to satisfy both local and external demand provided proper conditions are put in place to attract the necessary capital in the industry.
Mr. John Ulanga, BG Tanzania vice president for policy and corporate affairs, stated the capacity shows how big the industry has become and the gas potential Tanzania possesses. Mr. Ulanga was speaking last Thursday at the launch of an oil and gas suppliers’ database, which the company has teamed up with Statoil Tanzania and Achilles to establish. The supplier capacity register, which meets the procurement needs of oil and gas companies working or seeking to work in the region, will trade as Achilles East Africa Oil & Gas Community.
He also said “Tanzania has been blessed with significant amount of gas resources in the deep sea to the tune of about 47 tcf, which is the amount of gas that could supply the UK for close to 20 years for all of their current gas needs.”
Achilles is one of the world’s largest service providers of global supply chain risk management solutions, which works on behalf of 860 buying organisations operating in 11 different sectors, including oil and gas. Company officials said in Dar es Salaam on Thursday that the oil and gas sector was the first industry to adopt the Achilles Community model.
Ulanga said contemporary supplier management was a key aspect in the development of the industry in Tanzania and its future robust growth. He said better exploitation of the gas resources requires not only capital investments but also modern supply chain services like the Achilles suppliers’ registration and assessment mechanism.
“As part of development of these resources, significant investment will be made in the next 10 years or so,” Ulanga told the gathering noting that the Achilles datable provides for an independent and internationally accredited mechanism to identify suppliers suited to develop the gas industry.
“The estimated investment to develop the deep sea gas fields and build the LNG plant is in the tune of US$40 to US$60 billion, which is an amount more than four to six times of the current government budget,” the BG Tanzania official added.
He also said the capital was four to five times the current foreign direct investment (FDI) stock in the country, which he put at between US$12 billion and US$13 billion.
Ulanga said BG and Statoil Tanzania have invested in the establishment of the Achilles database in Tanzania that also serves the region because the industry functions well when it is served by credible and capable local and international suppliers.
According to him, the database does not belong to the two gas firms but to Achilles that currently serves over 230 of the oil and gas sector’s buying organisations and over 17,500 supply side businesses in 19 countries across six continents. The company now operates seven communities in the sector worldwide, including the East Africa Oil and Gas Community.
Genevieve Kasanga, the head of communications at Statoil Tanzania, said Achilles East Africa Oil & Gas Community will support growth of local firms as well as the national economy. She also added that the arrangement was an opportunity for local suppliers to showcase their services and promote themselves across the board. According to her, Statoil, which currently operates in 30 countries across the world, opened for business in Tanzania in 2007. By May last year, the company had successfully drilled 14 wells to establish a gas resource base of 22 tcf, which is enough to supply the whole of the UK for nearly nine years.
“The Achilles East Africa Oil & Gas Community has been developed in partnership with BG Group and Statoil to provide a Supplier Capacity Register that meets the procurement needs of oil and gas companies working or seeking to work in the East Africa Region,” Gareth Palmer, regional director, Middle East and Africa for Achilles said in a presentation of the project and the company.The database is based on a proven supply chain management system that standardize and streamlines the way buyers and suppliers conduct business with each other. This in turn drives important efficiencies for all parties involved in the procurement process.
Achilles says for organisations operating or looking to operate in the region’s oil and gas industry should strive to get an accurate understanding of both in-country and international capacity to supply before preparing for tenders.
The company says its procurement services enables organisations to achieve the required level of transparency to support all buying decisions and activities, and to deliver against critical compliance requirements.
Achilles collects, validates and maintains essential data on more than 133,000 suppliers worldwide.
Tanzania Private Sector Foundation (TPSF) has endorsed the initiative but raised concerns over the charges to access the database by especially the “real small and medium enterprises”. Other organisations supporting it are Tanzania Chamber of Commerce, Industry and Agriculture, Tanzania Petroleum Development Company and the Contractors Registration Board.
The TPSF’s executive secretary, Godfrey Simbeye said at the launch that the database was a platform for local firms to secure business opportunities. According to him, Achilles East Africa Oil & Gas Community was also a tool for empowering SMEs, capacity building and communication. However, he said the service charges were an issue. The annual subscription fees to access the Achilles database ranges between US$240 and US$2,130. That translates to between 528,000/- and 4.68m/- at the current exchange rate.