Local Content: enhancing the subnational benefits of oil and gas sector

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The government of Tanzania has been advised to put in place robust mechanisms that will ensure benefits of gas extraction are maximized for local people.

Speaking at a recent Policy Forum breakfast debate, Mr. Silas Olang, the Senior Regional Associate (Africa) Revenue Watch Institute (RWI), said this would require observing three major things: high Government commitment, supportive international oil companies and a high focus on developing human resources.

Olang said that at the moment we do not have an exclusive Local Content Policy to direct us on how to maximize theuse of local expertise, procurement of goods and services from local businesses in all aspects of the oil and gas industry value chain so that there is sustained job creation for people in Tanzania.

“The local content strategy should aim at developing local capability in all aspects of the oil and gas value chain through education, skills and expertise development, transfer of technology and know-how and an active research and development portfolio,” he said.

He noted the importance of a multi-stakeholder collaboration in achieving local content enhancement. He said that the government, academia, major companies and the entire private sector needed to collaborate more closely.

Genevieve Kasanga, Head of Communication and Government Relations at Statoil, a Norwegian national oil company, also reiterated that local content enhancement required giving preference to the purchase of Tanzanian goods, services and materials provided such are of acceptable quality and the corresponding prices and delivery times are comparable to non-Tanzanian deliveries.

“We should make maximum use of Tanzanian service companies where services are of comparable standards with those obtained elsewhere and are available at competitive prices and terms. We should also also aim to employ Tanzania citizens having the appropriate qualifications to the maximum extent possible and establish training programmes,” she said.

The Acting Assistant Commissioner from the Ministry of Energy and Minerals, Mr. Mwaro Shoo, said in order to develop the capabilities of Tanzanians to participate strategically in the sector, the Government through his ministry opted to stage training programmes in three phases.

Shoo said that the Short Term Plan will involve implementation of Capacity Building Marshal Plan (2012-2016). It will involve 50 Tanzanians being offered undergraduate and masters degrees in the oil and Gas fields by 2016. The Medium Term Plan will involve empowering training institutions to deliver the required Oil and Gas skills locally and the Long Term Plan will involve establishing of Oil and Gas Centre of Excellency.

“The Government is determined to build capacity for a national company responsible for development of petroleum and to ensure Tanzanians participate strategically in the natural gas value chain,” he concluded.