Tanzanian entrepreneurs urged to take advantage of gas, oil boom

Crude oil13 November 2013, Dar es Salaam – Tanzanian local entrepreneurs have been urged to take advantage of the emerging business opportunities from the oil and gas industry as they do not require huge capital.

Briefing reporters in Dar es Salaam, Swala Oil and Gas Tanzania Limited Director, Mr Abdallah Mwinyi implored entrepreneurs to tap the opportunities that range from catering services to accommodation, asking Tanzanians to buy as many shares as possible when the firm floats shares on the Dar es Salaam Stock Exchange at the end of or early next year.

“The findings of the seismic survey that was conducted show very positive signs of a presence of oil and I strongly urge people to invest. I wouldn’t advise anyone to sell their house but find smart ways of taking advantage of this unique opportunity,” he said.

Initial results of the survey indicate that the age of the sediments recorded appears to be similar to that of sediments observed in the now proved oil basins of Lokichar (Kenya) and Lake Albert (Uganda), where Africa Oil and Tullow Oil have had significant success.

Mr Mwinyi said that the oil and gas industry by nature is both very specialised and requires huge amounts of capital, meaning that it isn’t a sector for anyone but Tanzanians if well prepared can capitalise on the services surrounding the industry.

He said that looking at the costs involved and the desire among investors to keep good with the people they live with, many would prefer to employ local people than to outsource from their country of origin but many local companies fail because they lack the standards and qualities that the investor wants.

“At the moment because the industry is still so young, the government would prefer not to have stringent laws forcing the investors on who to employ and where to source it’s requirements, this will come when capacity has been firmly built,” he explained.

He said that the company has high expectations of lodging its shares at the DSE and plans on accruing 5 million US dollars during the first floating of its shares and later raise 20 million US dollars which will be spent in exploration.

Swala Oil and Gas Limited in September announced that it was registering on the DSE and would give 10 per cent of its ownership to the local communities where they operate which will be managed by an independent company and 25 per cent to be released to the general public as shares.

“I know the biggest question in people’s mind is how they will benefit after they have bought the shares, well there are two sides, one is through additional value of the shares and the second is through dividends when and if oil or gas is struck,” he elaborated.

Mr Mwinyi said that it was his conviction that Swala’s model of enabling the local community to participate is ideal if peace and tranquility is to be sustainable and that the model wasn’t limited to the oil and gas industry and that it can be replicated in other sectors as well.

– Tanzania Daily News

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