Derek Hudson, the President and Asset General Manager for BG East Africa
The investors expressed the optimism in the country’s oil and gas
economy yesterday in Dar es Salaam during the launch of a
pre-qualification system for service providers to the industry.
“With up to 55 trillion cubic feet of natural gas reserves,
Tanzania is being viewed by many operators as an exciting new territory
even at a time of depressed oil prices,” BG Tanzania and Statoil
Tanzania AS said in a statement.
As part of a proactive, long-term strategy, the two companies have
formed a consortium with Achilles – a global supplier information firm –
to design a common supplier pre-qualification system in Tanzania. The
statement said the template will be used as the preferred mechanism to
identify and select suppliers and service providers for opportunities
emerging in the country’s oil and gas economy.
Tanzania has made significant offshore gas discoveries during the
last two years. The discoveries in Tanzanian and Mozambican waters have
led to predictions the region could become the world's third-largest
exporter of natural gas.
According the IMF, annual revenue collections by the government
from the industry could reach between US$3 billion and US$6 billion at
full production. That amounts to 6.6trn/- and 13.2trn/- respectively at
the current exchange rate.
The global financial prefect says most of the fiscal revenues would
originate from upstream activities. There have been fears that the
unprecedented fall of oil prices in contemporary times would affect
investment in the emerging gas sector in the country and deter
exploration activities.
Global oil prices have fallen over 70 per cent since mid-2014,
while other commodity prices such as gold and copper have also taken a
dive. A barrel of crude oil has been sold to less than US$28 this month
with fears rising it could even go below US$20.
“Suppliers wishing to provide services to the oil and gas industry
in Tanzania are being offered a new route to market their expertise to
the world’s biggest operators, ahead of potential multi-billion dollar
project development opportunities in the country,” the joint statement
said.
According to it, the consortium has agreed a single
pre-qualification questionnaire with common standards that suppliers
must achieve to be considered for business opportunities with the
operators. In the first stage, oil and gas firms will invite existing,
in-country suppliers to provide required information on their business
position on areas such as health and safety, compliance, environment and
Local Content Development.
This will feed into an accurate, up-to-date supplier database.
With a clear picture of resourcing, skills and compliance levels in
the region, operators will be able to identify suitable suppliers,
develop supply chain capacity when needed, ensure the highest standards
in business critical areas and address requirements within Local Content
Development – sharing benefits of contracts with local communities.
Further, with a single registration, suppliers can be considered for
work with any buyer in the consortium.
Gareth Palmer, Regional Director, Middle East and Africa for
Achilles, which works on behalf of 200 oil and gas buying organisations
across the globe to manage supplier risks said: “By implementing and
using the same online system, BG and Statoil are making it as easy as
possible for local suppliers to gain a ‘shop window’ with operators
before opportunities arise.”
Derek Hudson, the President and Asset General Manager for BG East
Africa said that supporting local content makes business sense hence the
effort to provide the initial investment needed to develop and
establish the new system in Tanzania and the region.
“Through this system, we hope to identify, nurture and unleash the
potential to work with more Tanzanian producers and suppliers,” he
noted.
His counterpart at Statoil Tanzania, Øystein Michelsen said the
collaboration will support growth of local companies and contribute to
the economy in Tanzania.
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