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The 4TH TANZANIAN OIL & GAS CONFERENCE

AND EXHIBITIONS (TOGaCE 2016)

The Julius Nyerere International Convention


Centre, Dar es Salaam, Tanzania

20 21 October 2016

(Including Conference Programme)

Organisers
Ministry of Energy and Minerals, Tanzania (MEM) (www.mem.go.tz)
Institution of Engineers Tanzania (IET) (www.iet.co.tz)
Tanzania Petroleum Development Corporation (TPDC) (www.tpdc-tz.com)
Energy and Water Utility Regulatory Authority (EWURA) (www.ewura.com)
University of Dar es Salaam (UDSM) (www.udsm.ac.tz)

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Foreword

FOREWORD
This Book of Abstracts contains among others the conference program,
exhibitions map and abstracts of the papers for the 4th Tanzanian Oil and Gas
Conference and Exhibitions (TOGaCE-2016). The event is co-organized by
the Ministry of Energy and Minerals, the Institution of Engineers Tanzania, the
Tanzania Petroleum Development Corporation, the Energy and Water Utilities
Regulatory Authority and the University of Dar es Salaam.

The purpose of the event is to bring together interested individuals from the
government, its institutions and the general public, private sector including
oil/gas companies, the financial institutions, the academia and other interested
stakeholders to deliberate on matters relevant and of interest to the oil and gas
industry covering the regulatory and institutional framework, investment and
expectations, corruption vulnerability of the sector, upstream, mid-stream and
downstream activities, transparency, tax and taxation, technologies for valu
addition, contracts and agreements and related issues. The event is therefore
expected to provide a platform for sharing of experiences and explore ways in
which the oil and gas industry in Tanzania can be developed more inclusively
for the benefit of the whole nation without compromising the safety and
environmental issues.

The conference and exhibitions focus is thus on the growth of the industry in
Tanzania. Specifically the conference dwells on: (1) Status of investment in
oil and gas sector in Tanzania (Upstream and Downstream) - past, present
and future. (2) Technologies for value addition of natural gas - experiences
from other countries (3) Utilization of natural gas present and future (4) Gas
Policy and Local Content Policy - opportunities and challenges for their
implementation (5) Regulatory framework, strategies and institutional
arrangement (6) and the World energy outlook the future of natural gas in
the energy mix.

The conference program has 6 invited (keynote) papers, from prominent


authorities and 26 papers from various respected institutions/companies and
authors to be presented in 7 sessions over the two days. The invited papers,
set direction and recollection of various stages and ideas in relation to growth
in oil and gas industry in Tanzania. The contributed papers which cover wide

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Foreword

spectrum of fields within the above listed topics originate from international
companies operating in and outside Tanzania as well as national institutions.

The exhibitions map shows that 13 local and international companies/


institutions will display their products/activities/services related to oil and gas
industry.

On behalf of the organizing committee, I would like to thank all the authors
and exhibitors for preparing papers/posters and for being ready to share with
the participants. I would also like to express my gratitude to all sponsors for
their cooperation and generous support which made the conference and
exhibitions possible. Lastly, I wish to thank the session chairs for accepting
the responsibility and all participants for anticipated positive contributions
and/or constructive criticisms.

Abstracts are available at the conference webpage http://www.togace.or.tz .


Full papers will be published as post-Conference Proceedings and posted at
the same webpage.

Once again thank you for participating in the TOGaCE-2016 and let me wish
you all fruitful deliberations and enjoyable stay in Dar es Salaam.

Abraham K. Temu
Chairman, TOGaCE-2016

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Contents

TABLE OF CONTENTS

FOREWORD ............................................................................................................. 2
TABLE OF CONTENTS .......................................................................................... 4
CONFERENCE PROGRAMME............................................................................. 6
SESSION A2: Theme: Status of Investment in the Oil and Gas Sector in
Tanzania (Upstream, Mid and Downstream) Past, Present and Future ......... 14
Keynote Presentation 1: Investment and Expectations in the Oil and Gas Sector 15
Paper 1: Tectono-Sedimentary Evolution of East Africa Continental Passive
Margin: A Case Study of Block 5 in deep offshore Tanzania ............ 16
Paper 2: Natural Gas Supply Infrastructure in Tanzania: Implications of
Increased Demand ............................................................................... 17
Paper 3: Competitive Advantages of Oil and Gas Sector in Tanzania: Proactive
Corporate Environmental Strategy...................................................... 19
Paper 4: Shaping A Legal Framework For A Viable LNG Development in
Tanzania .............................................................................................. 22
Paper 5: Hydrocarbon Potential for TPDC Blocks 4/1B and 4/1C Offshore .... 24
SESSION A3: Technologies for Value Addition of Natural Gas Experiences
from Other Countries.............................................................................................. 26
Keynote Presentation 2: Oil and Gas Economy: An Ambivalent Path for Tanzania
............................................................................................................ 27
Paper 6: Natural Gas Modes of Transportation for Tanzania ........................... 28
Paper 7: Upstream Concept Selection for Tanzania Deep Sea Gas .................. 29
Paper 8: The Natural Gas Market-what should be done in Tanzania? .............. 31
Paper 9: Present Oil exploration focus in the Eyasi-Wembere Block by recent
Airborne Gravity Gradiometry and aeromagnetic survey ................... 33
SESSION A4: Gas Policy, Local Content Policy Opportunities and Challenges
for Their Implementation ....................................................................................... 35
Keynote Presentation 3: Corruption in The Oil and Gas Sector: Impact.............. 36
Paper 10: Skills Gap Analysis for Oil And Gas Development In Tanzania ........ 37
Paper 11: Statoil Sustainable Capacity Building Programs in Higher Learning
Education in Tanzania......................................................................... 38
Paper 12: Gas Policy and Local Content Policy For Their Implementation ....... 39
SESSION B1: Regulatory Framework, Strategies and Institutional
Arrangements .......................................................................................................... 41
Keynote Presentation 4: Transparency in the Oil and Gas Sector: Challenges and
Opportunities....................................................................................... 42

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Contents

Paper 13: Value chain around major projects in the O&G sector ......................... 43
Paper 14: Tanzania Block 2 Subsea to Shore Development ............................. 44
Patrice Aguilera ........................................................................................................ 44
Paper 15: Analysis of the Regulatory Framework and Institutional Arrangement
in the Tanzania Petroleum Act, 2015 .................................................. 45
Paper 16: Natural Gas Pricing and Policy for Fertilizer Production; Experience
from Other Countries .......................................................................... 47
SESSION B2: Utilization of Natural Gas Present and Future / Other
Crosscutting Issues of Health, Safety Environmental and Related .................... 48
Keynote Presentation 5: Tax and Taxation in the Oil and Gas Sector .............. 49
Paper 17: Utilization of Natural Gas - Present and Future (Tanzanian
perspective) ......................................................................................... 50
Paper 18: Natural Gas Utilization in Tanzania Beyond Energy Use ............... 52
Paper 19: Utilization of Natural Gas Present and Future ................................. 54
Paper 20: Health, Safety and Environmental (HSE) Issues of Concern and
Preparedness in the Oil and Gas Industry in Tanzania ....................... 56
SESSION B3: The World Energy Outlook and the Future of Natural Gas in the
Energy Mix ............................................................................................................... 58
Keynote Presentation 6: Tanzania Petroleum Contracts and Agreements in
Broader Context .................................................................................. 59
Paper 21: The Effect of Gas to Liquid Fuel on GDP: A Case of Mozambique .. 60
Paper 22: Making Hydrocarbon Extraction Work for Tanzania: What Role can
Community Engagement Play? ........................................................... 61
Paper 23: Natural Gas Vehicles: A Review of Best Practices around the World
and Challenges Facing Tanzania......................................................... 63
Paper 24: Metrology Infrastructures in The Development of Oil and Gas
Industry in Tanzania: Perspective From The Current Natural Gas
Reserves in Tanzania .......................................................................... 65
Paper 25: Compressed Natural Gas for Dar es Salaam City Transport............... 68
R. Rwechungura1 and G.D Mrema2......................................................................... 68
Paper 26: Incidence of Medical Conditions Associated With Up/Down Stream
Oil and Gas Explorations In Tanzania; A Guide Towards Appropriate
Onsite Medical Support Setup ............................................................ 70
SESSION B4: LAYOUT OF EXHIBITION BOOTHS ....................................... 71

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Programme

CONFERENCE PROGRAMME

DAY 1: THURSDAY OCTOBER 20, 2016

SESSION A1: Opening Ceremony


Session Chair: Dr. Julliana Pallangyo, Deputy Permanent Secretary,
MEM

Time Program/Responsible

Registration
7.00-09.00
Secretariat, Organizing Committee, TOGaCE-2016
Introductory Remarks
9.00-09.05 Prof. Abraham K. Temu, Chairperson
Organizing Committee, TOGaCE-2016
Welcome Note
9.05-09.15 Prof.Rwekaza Mukandala, VC
UDSM
Opening Speech
9.15-09.35 Prof. Justin W. Ntalikwa, Permanent Secretary,
MEM
Vote of Thanks
9.35-09.40 Mr. Felix Ngamlagosi, Director General
EWURA
Presentation of Trophies and Certificates to Sponsors
9.40-9.50 Prof. Justin W. Ntalikwa, Permanent Secretary,
MEM
Presentation of Products/Services
9.50-10.05
Tanzanite, Diamond and Sapphire Sponsors only
Group Photos
10.05-10.15
The Logistics Sub-Committee, TOGaCE-2016

10.15-10.45 HEALTH BREAK/ Exhibitions

SESSION A2: Theme: Status of Investment in the Oil and Gas Sector in
Tanzania (Upstream, Mid and Downstream) Past, Present
and Future
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Programme

Session Chair: Mr Yona Killaghane, Former MD, TPDC

Keynote Presentation 1:
Investment and Expectations in the Oil and Gas Sector
10.45-11.05
Author/Presenter: Mr. Singili, C., CEO, Tanzania Investment
Bank (TIB)

11.05-11.15 Discussion

Paper 1
Tectono-Sedimentary Evolution of East Africa
11.15-11.30 Continental Passive Margin: A Case Study of Block 5
in deep offshore Tanzania
Author: Venance Emanuel Mboya, TPDC
Paper 2
Natural Gas Supply Infrastructure in Tanzania:
11.30-11.45
Implications of Increased Demand
Author: Charles Jimmy Sangweni, TPDC
Paper 3

11.45 12.00 Competitive Advantages of Oil and Gas Sector in


Tanzania: Proactive Corporate Environmental Strategy
Author: Mkama Thomas Manyama, UDSM
Paper 4
12.00 12.15 Shaping A Legal Framework For A Viable LNG
Development in Tanzania
Author: Are L. Brautaset, STATOIL
Paper 5
Hydrocarbon Potential for TPDC Blocks 4/1B and 4/1C
12.15 12.30
Offshore Southern Tanzania
Author: Asiadi R. Mrutu; TPDC

12.30 13.00 Discussions

13.00 14.00 LUNCH BREAK / EXHIBITIONS

TRACK SESSIONS

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Programme

SESSION A3: Technologies for Value Addition of Natural Gas


Experiences from Other Countries
Session Chair: Prof. Joseph Semboja, CEO, Uongozi Institute
Keynote Presentation 2
Towards Oil and Gas Economy in Tanzania
14.00 -14.20
Author/Presenter: Dr. Mmari, D, CEO, Research on Poverty
Alleviation (REPOA)

14.20-14.30 Discussion

Paper 6
14.30 14.45 Natural Gas Modes of Transportation for Tanzania
Author: Adela Syikilili and Abraham Temu; Department of
Chemical and Mining Engineering, UDSM
Paper 7
14.45 15.00 Upstream Concept Selection for Tanzania Deep Sea Gas
Author: Fellix Nanguka, TPDC
Paper 8
The Natural Gas Market-what should be done in
15.00 15.15 Tanzania?
Author: Emma S. Msaky; President's Office, Oil and Gas
Advisory Bureau (OGAB)
Paper 9
Present Oil exploration focus in the Eyasi-Wembere Block
15.15-15.30 by recent Airborne Gravity Gradiometry and
aeromagnetic survey
Author: Sindi Maduhu Gumha, TPDC

15.30 16.00 Discussions

16.00 16.20 HEALTH BREAK/ Exhibitions

SESSION A4: Gas Policy, Local Content Policy Opportunities and


Challenges for Their Implementation
Session Chair: Dr. Donald Mmari, CEO, REPOA
Keynote Presentation 3
16.20 16.40
Corruption Vulnerability in the Oil and Gas Sector
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Programme

Author: Presenter: Mr. Mlowola, V, CEO, (PCCB)

16.40 16.50 Discussion

Paper 10
Skills Gap Analysis For Oil and Gas Development in
16.50 17.05 Tanzania
Author: Happiness N. Mgalula, Josiah A. Mwabeza,
EngOmari Athumani, Chacha Nyamuhanga, and David
Mwankenja, Planning Commission
Paper 11
17.05 17.20 Statoil Sustainable Capacity Building Programs in Higher
Learning Education in Tanzania
Author: Ghati Mwita and Richard Rwechungura, STATOIL
Paper 12
Gas Policy and Local Content Policy For Their
17.20 17.35 Implementation
Author: E. Kavana; Acacia Mining PLC, Technical Services,
Department of Geology

17.35 18.05 Discussions

18.05 20.00 COCKTAIL - ALL

DAY 2: FRIDAY OCTOBER 21, 2016

Time Program/Responsible

Registration and Morning coffee/Tea


07.30-08.30
Organizing committee
SESSION B1: Regulatory Framework, Strategies and Institutional
Arrangements
Session Chair: Prof. Florens Luoga, DVC-Academic, UDSM

8.30-08.50 Keynote Presentation 4

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Programme

Transparency in the Oil and Gas Sector: Challenges and


Opportunities
Author/Presenter: Prof. Assad, M. J., Controller and Auditor
General (CAG)

08.50-09.00 Discussion

Paper 13
Value chain around major projects in the O&G sector
9.00-09.15
Author: Maina Kigundu, East Africa Head, Oil & Gas,
Stanbic Bank
Paper 14
09.15-09.30 Tanzania Block 2 Subsea to Shore Development
Author: Patrice Aguilera, STATOIL
Paper 15
Analysis of the Regulatory Framework and Institutional
09.30 09.45
Arrangement in the Tanzania Petroleum Act, 2015
Author: John G Mgayambasa, TPDC
Paper 16
Natural Gas Pricing and Policy for Fertilizer Production;
09.45-10.00
Experience From Other Countries
Author: Diana Byonge and Lwaga Kibona, UDSM/TPDC

10.00-10.30 Discussions

10.30 11.00 HEALTH BREAK/ Exhibitions

SESSION B2: Utilization of Natural Gas Present and Future / Other


Crosscutting Issues of Health, Safety Environmental and
Related
Session Chair: Prof. Jamidu H.Y Katima, Chemical and Mining
Engineering, UDSM
Keynote 5
11.00 11.20 Tax and Taxation in the Oil and Gas Sector
Author/Presenter: Prof. Luoga, F., DVC-Academic, UDSM

11.20 11.30 Discussion

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Programme

Paper 17
11.30 11.45 Utilization of Natural Gas - Present and Future
(Tanzanian Perspective)
Author: Gabriel N. Bujulu, P. O. Box 31437 Dar es Salaam
Paper 18
11.45 12.00 Natural Gas Utilization in Tanzania Beyond Energy Use
Author: Abraham Temu and Adela Syikilili, Department of
Chemical and Mining Engineering, UDSM
Paper 19
Utilization of Natural Gas Present and Future
12.00 12.15
Author Eng. Norbert A. Kahyoza and Ebeneza P. Molle;
EWURA/MEM
Paper 20
Health, Safety and Environmental (HSE) Issues of
12.15 12.30 Concern in the Oil and Gas Industry in Tanzania
Author: Godwill D Mrema, Tumaini University, Dar es Salaam
College TUDARCo

12.30- 13.00 Discussions

13.00 14.00 LUNCH BREAK / EXHIBITIONS


SESSION B3: The World Energy Outlook and the Future of Natural Gas in
the Energy Mix
Session Chair: Mr. James Andilile, Ag. MD, PURA, Ag. Commissioner for
Energy, MEM
Keynote 6
Contracts and Agreements in the Oil and Gas Sector
14.00-14.20
Author/Presenter: Prof. Bukurura, S., Tanzania Law Reform,
(TLR)
14.20- 14.30 Discussion
Paper 21
14.30- 14.45 The Effect of Gas to Liquid Fuel On GDP A Case of
Mozambique
Author: Ismael Valigy, Maputo, Mozambique
Paper 22
14.45- 15.00 Making Hydrocarbon Extraction Work for Tanzania:
What Role Can Community Engagement Play?

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Programme

Author: Japhace Poncian and Jim Jose, Newcastle Business


School, Faculty of Business & Law, University of Newcastle,
Australia
Paper 23
Natural Gas Vehicles: A Review of Best Practices around
15.00- 15.15
the World and Challenges Facing Tanzania
Author: Dr. Hassan M Rajabu, CoET, UDSM
Paper 24
Metrology Infrastructures in the Development of Oil and
15.15 15.30 Gas Industry in Tanzania: Perspective From the Current
Natural Gas Reserves
Author: Ishigita Lucas Shunash,CBE, Legal and Industrial
Metrology Department
Paper 25
Compressed Natural Gas for Dar es Salaam City
15.30 15.45 Transport
Author: R. Rwechungura and G.D Mrema, , STATOIL/
UDSM
Paper 26
Incidence of Medical Conditions Associated With
Up/Down Stream Oil and Gas Explorations In Tanzania;
15.45 16.00 A Guide Towards Appropriate Onsite Medical Support
Setup
Author: Chakou Halfani, Tindwa Medical and Health
Services
16.00 16.30 Discussions
16.30- 17. 00 HEALTH BREAK/ Exhibitions
SESSION B4: Closing Ceremony
Session Chair: Prof. Joseph Runyoro, President IET
Conference Resolutions
17.00 17.30
Rapporteur
Closing/Closing Remarks
17.30-17.50
Eng. Kapuulya Musomba, Ag. Managing Directory, TPDC
End of the Programme

Events Manager:: Mr. Theofilo Mlaki

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Programme

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Status of Investment in the Oil and Gas Sector in Tanzania

SESSION A2: Theme: Status of Investment in the Oil


and Gas Sector in Tanzania (Upstream,
Mid and Downstream) Past, Present and
Future

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Status of Investment in the Oil and Gas Sector in Tanzania

Keynote Presentation 1: Investment and Expectations in the


Oil and Gas Sector
Mr. Singili, C.

CEO, Tanzania Investment Bank (TIB)

Introduction
My discourse focuses on investment and expectations in the oil and gas sector
centring on status of investment in middle and downstream.

Markets and experts alike in this sector are gradually coming to the
realization that the gas industry offers a number of investment prospects and
as such there is need for anyone setting up gas related businesses in Tanzania
to ensure that they are well prepared and have all investment plans,
understand the regulatory environment, negotiations and be well informed on
the risks pertaining to sector to help them manage expectations.

As one of the few growing sectors in the source of energy, raw material (i.e.
natural gas is known to be a major feedstock for the production of ammonia,
via the Haber process, for use in fertilizer) production for fertilizers and other
hydrocarbons related products and source of revenue, oil and gas sector in
Tanzania like in any other countries blessed with this resources in the world
is bound to attract a lot of attention. Tanzania is looking to its growing oil and
gas sector to make up some of the inevitable deficit in its power production
capability among other uses such as fertiliser etc.

This paper begins by setting a background on world and regional oil and gas
industry outlook to help position Tanzanias case for entry and expectations
on the gas economy, and then looks at investment and expectations.

This paper therefore undertake to consider the role that TIB Development
Bank should perhaps play in financing or arranging to fund long-term
business or projects in the oil and gas industry particularly in the middle and
downstream segments. These are especially appropriate at this time when
Tanzania organizes itself to enter into the club of nations of gas-led
economies. We understand Tanzanians expectations following gas discovery
are very high.

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Status of Investment in the Oil and Gas Sector in Tanzania

Paper 1: Tectono-Sedimentary Evolution of East Africa


Continental Passive Margin: A Case Study of
Block 5 in deep offshore Tanzania
Venance Emanuel Mboya

TPDC
Abstract
This paper is on 3D-structural-sediment modelling to unravel the evolution of
the Eastern Africa Continental Passive Margin (EACPM) based on
interpretation and analysis of 2D-seismic data set from Block 5 offshore
Tanzania, eastern Coast of Africa.
Block 5 is within the Deep water Jurassic Mafia Basin which is hydrocarbon
prolific zone known by its recently huge gas discoveries in the region (Petzet,
2012) and yet more discoveries are underway. This potential is due to its
historical structural-sediment interactions (Lambiase and Bosworth, 1995) the
consideration of which has influenced this study using 46 SEG-Y format 2D-
seismic seismic sections from deep-offshore Tanzania importantly for
analyses of the hydrocarbons prospectivity in the region.

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Status of Investment in the Oil and Gas Sector in Tanzania

Paper 2: Natural Gas Supply Infrastructure in Tanzania:


Implications of Increased Demand
Charles Jimmy Sangweni
(MSc. Gas Engineering and Management)

Directorate of Downstream Operations, Tanzania Petroleum Development


Corporation
(Mob: +255714672204, email:sangweni@tpdc-tz.com)

Abstract
The use of natural gas in Tanzania started in July 2004, after completion of
the first infrastructure consisting of 70mmscfd capacity Processing plant at
Songo Songo together with a 247km, 24 pipeline from Songo Songo gas
fields to Dar es Salaam, with a capacity of transporting up to 105mmscfd
(without compression). This infrastructure was constructed to supply gas for
power generation at Ubungo Songas power plant. In the course of supplying
gas to power project, some additional consumers which includes 39
industries, 70 households and 1 institution together with a hotel were
identified. To date about 100mmscfd of gas is supplied to different users
through this infrastructure.

The infrastructure was designed to operate up to 12 years before it gets to full


capacity, but due to rapid increase in gas demand it became fully within 4
years. Currently this infrastructure is operating at its fully capacity saving
power plants generating about 330MW, 39 industries, 70 houses, a hotel and
one institution. Also there is one compression station that supplies
compressed natural gas (CNG) to customers who are not yet connected to gas
distribution network and 50 vehicles that were converted to use natural gas.
Having rapid increase in natural gas demand within the country and in
considering recent massive natural gas discoveries that amounts to 57.27TCF,
in 2011 the Government of Tanzania through its National Oil Company
(TPDC) constructed a new natural gas infrastructure.
The new infrastructure known as National Natural Gas Infrastructure (NNGI)
comprises of Madimba processing plant with a capacity to process
210mmscfd and Songo Songo processing plant with a capacity of processing
140mmscfd together with a 542 km, 36 pipeline connecting Madimba and
Songo Songo to Dar es Salaam. This infrastructure started to operate in

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Status of Investment in the Oil and Gas Sector in Tanzania

September 2015, and gas supplied is currently used in generating power of


almost 200MW. The completion of this infrastructure attracted many other
users including new industries and independent power producers. The design
allows expansion of the processing plants to suit the pipeline capacity which
is 784mmscfd without compression and 1002mmsfcd with compression. Plan
is to supply gas through the NNGI to regions crossed by the pipeline, and also
the rest of Dar es Salaam city. In addition to Dar es Salaam city, the Ministry
of Energy and Minerals is currently in final stages of preparing the Natural
Gas Utilization Master Plan which will be a guidance for natural gas supply
to the rest of Tanzania and its cross borders.
This paper intends to provide details on how the development of downstream
natural gas infrastructure (processing, transmission and distribution facilities)
has triggered natural gas demand in Tanzania. It provides the history of
natural gas utilization in Tanzania and how it has evolved over time and
circumstances. It thus concludes that there is a need for further sustainable
investment in the natural gas infrastructure so as to cater for the increasing
demand and promote new demand for natural gas.

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Paper 3: Competitive Advantages of Oil and Gas Sector in


Tanzania: Proactive Corporate Environmental
Strategy
Mkama Thomas Manyama

Department of Zoology and Wildlife Conservation,


College of Natural and Applied Sciences, University of Dar es Salaam,
P. O. Box 35064 Dar es Salaam, Tanzania.
Email for corresponding author: mkama.ma@gmail.com

Abstract
Managing the environment sustainably is a continuing leadership challenge to
industrial performance and natural capital, inclusive human resource base in an
industrial criteria setting such as that of Tanzania Oil and Gas Sector. The global and
local industrial and sectoral environmental issues policies and practices, all lies in
the hands of human resources inclusive strategy. The planning, staffing,
compensation as well as employer/employees relationship together with appraisal,
training and development policies are profoundly significance on organizational
environmental performance.

Historically, the roles and responsibilities of Environment, Health and Safety (EHS)
professionals have been solely focused on managing the wastes resulting from the
industrial performances. This model of management concentrated on wastes and
pollution preventioncontrol within the respective legislation and regulatory
certification. In contrast, proactive environmental management goes far beyond
compliance as a factor of environmental responsibility. It implements the
environmental strategy in its broader sense, inclusive its extended future impacts of
each and every challenges on organization success and continuous performance.
While corporate environmental strategy drivers are corporate culture, structure and
green innovativeness on corporate performance. The drivers for proactive corporate
environmental strategy are regulatory demands, cost factors, competitive
requirements and stakeholders forces.

Competitiveness is the manifestation of an industry to depending on long-term


productivity, which uses capital, human and natural resources to successful compete
in local and international markets while simultaneously improving the living
standards of citizens. Competitive businesses create rising incomes and jobs where it
is operating; by doing such a business trails to the competitive advantage

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Status of Investment in the Oil and Gas Sector in Tanzania

management; a condition or circumstance that puts a company in a favorable or


superior business position with respect to its rivals in the eyes of customers.
Competitive advantage is strongly attributed to superior innovation and superior
responsiveness to stakeholders inclusive employees as number source of
competitive advantage. Management of sound community projects is ascribed to
finding and nurturing a competitive advantage at local context; motivated and
committed employees who are willing to go the extra mile for firms successful
performance can better do this. The Tanzania oil and gas sector need continue
glooming and searching for such employees for the successful and sustainable
sectoral performance. A success that will in all cost at all time consider
environmental issues as a forefront agenda in it operation.

The environmental issues likely to be found in the Tanzania Oil and Gas S (O&G)
sector are aquatic impacts particularly the aqueous waste stream like produced water,
drilling fluids, cuttings and well treatment chemicals but also cooling water, spillage
and leakage are pollutants as well. The atmospheric impacts of O&G involves
flaring, venting and purging gases, combustion processes in diesel engines and
turbines, fugitive gases from loading operations and tank and losses from processes
equipment and particulate matters from soil disturbances during construction and
burning sources. The physical disturbances resulting from construction activities; the
spillage and leakage as well as waste disposal are drivers of terrestrial impacts of
O&G sector. These are likely to cause soil erosion, changes in surface hydrology and
drainage patterns, increased salination and habitat destruction, therefore plummeting
environmental capacity to support wildlife and vegetation. The sector is further
attributed to potential emergencies that are mainly due to spillage of gases, oil, fuels,
chemicals and hazardous materials. In O&G fires and explosions can likewise be
sources of emergencies; other causes are oil or gas well blowout.

The changes in an ecosystem patterns in areas where O&G are under exploration,
extraction and or transportation; the industry is responsible for changes in GHG
content in the atmosphere, changes in habitat type and size hence likely impact on
species typology and richness. The changes in migration routes, food chain and
nutrient contents, upsetting microbial activity in the soil due to salination and soil
disturbances have an impact on ecology and social-ecological systems in the area.
The operationalization of Tanzania O&G sector has come with new challenges on
social-ecological system, the urbanization processes. The rate of urbanization in
Mtwara and surrounding towns is surely not the same as it was in just few years ago.
Vegetation cover clearance is taking place for the purposes of putting modern and
enough infrastructures that will support the rural-urban migration rate, currently
happening. The investment opportunities though opened and created a number job

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Status of Investment in the Oil and Gas Sector in Tanzania

opportunities to local international communities, it has an overall impact on


ecosystems services. The poor access of water, food and energy sources amongst
others are likely to trigger opposite reaction from a group of local stakeholders.

It can be concluded that in implementing proactive corporate environmental strategy,


the Tanzania O&G sector; the human resources personnel particularly
Environmental (EHS) Manager should be a kind of employee ready to go extra miles
with knowledge on the changing roles and responsibilities of EHS. The person
should be having the ability to analyze and integrate the position of National
Environmental Management Council (NEMC), Occupational Safety and Health
Authority (OSHA) and other sectoral agencies. This should be an individual who can
offer guidance on how local and common citizens are an asset for the companys
profit while maintain effective approaches on lowering the transboundary
environmental impacts of the O&G sectoral activities. This will be competitive
advantage to the sector hence assurance of sustainable performance and profit
making for all.

Key Words: Environmental management, corporate environmental strategy,


competitive advantage

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Status of Investment in the Oil and Gas Sector in Tanzania

Paper 4: Shaping A Legal Framework For A Viable LNG


Development in Tanzania

Are L. Brautaset,

Head of Legal Affairs, Statoil Tanzania AS,


P.O. Box 713 Dar es Salaam, Tanzania. Email: arlb@statoil.com

Abstract
Statoil Tanzania AS (Statoil) and partner ExxonMobil in Block 2, which is located
about 100 km offshore South Tanzania at a water depth of approximately 2500
meters, have discovered about 22 trillion cubic feet (tcf) of natural gas. BG
Tanzania, now Shell, and its partners in Blocks 1 and 4, Ophir and Pavilion Energy,
have made discoveries in their blocks that combined are of the same magnitude.
These discoveries are sufficient to support a multi-train land based LNG project and
to provide for deliveries of substantial quantities of natural gas to the domestic
market.

At the request of the Government of Tanzania (GoT), the Block 2 and 1 & 4 partners
(the IOCs) together with TPDC are planning for a joint LNG development. If
realized, the integrated development of block specific offshore projects and a joint
onshore LNG plant Tanzania Gas & LNG Projects (TGP) would play a positive
part in the growth of the Tanzanian economy. It would represent an investment of
about USD 30 billion for the first phase, depending on the size of the LNG facilities.
TGP would offer significant long term benefits to Tanzania through direct revenues,
increase in Gross Domestic Product (GDP), domestic gas supply, local content and
capacity building as well as other more indirect effects. These benefits will vary as
the project evolves into the construction phase followed by the long term (25-40
years) production and operation phase.

The foundation for monetising the deep sea gas discoveries and enabling domestic
gas supply requires (i) robust technical development concepts at competitive costs,
(ii) stable terms and framework conditions supporting a commercial development
and (iii) positive LNG and natural gas market outlook. The presentation will focus
on the second element and discuss what is needed to create a sustainable
commercial, fiscal and legal framework for a viable gas and LNG development.

The current legal framework consists of the respective Production Sharing


Agreements with Gas Addenda (PSAs) and the Petroleum Act 2015 (PA15)
supplemented by tax and other relevant legislation. The PSAs are recognized
(grandfathered) under PA15 and provide a reasonable basis for the petroleum
activities to date. However, the PSAs do not contemplate a joint, onshore LNG
development, and they have shortcomings in the details of regulation which are
22 TOGACE - 2016
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Status of Investment in the Oil and Gas Sector in Tanzania

required for a complex and integrated gas and LNG development. It is therefore
proposed that a Host Government Agreement (HGA) between the GoT and the
sponsors (IOCs and TPDC) is established to provide for the tailor-made solutions
and the predictability required, and that certain modifications/supplements to the
PSAs are made.

The PA15 is an important milestone for Tanzania. Its provisions do, however, not
fully cater for an integrated value chain development such as TGP. Furthermore,
many provisions of PA15 are vague, inconsistent or insufficient. In order to underpin
the terms agreed in the HGA (and the PSA supplements), it is suggested that
bespoke legislation, in the form of a project law, is enacted. Where required the
project law will derogate from PA15 and other applicable legislation, including tax
laws.

The HGA, similarly to the PSAs, will be an investment agreement. The content of
the HGA will build on the PSAs but take into account the differences in the type of
activity undertaken under the agreement, for instance will the economic model for
the LNG plant be based on a tolling tariff and not on production sharing. The
purpose of the HGA will be to secure a financeable LNG project and lifetime stable
and reliable framework conditions. Key elements of the HGA will be:

LNG Project structure


Tolling and liquefaction tariff
TPDC and IOCs participation
Licences, Permits and Operational issues
Future investment and access to LNG Plant
Financing of LNG Project
Tax and fiscal regimes
Investment stability
Implementing legislation

For long term, complex and capital intensive LNG projects such as the Tanzania Gas
& LNG Project, which typically is one of a kind in a country, an investment
agreement as the proposed HGA and project specific legislation is common practice.

For the Tanzania Gas & LNG Project reaching agreement on the HGA is now on
critical path. Execution of the HGA is a pre-requisite for the sponsors for initiating
the Front End Engineering and Design (FEED) phase. The project law will then need
to be enacted before the project enters the construction phase, which will follow a
positive Final Investment Decision (FID).

23 TOGACE - 2016
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Status of Investment in the Oil and Gas Sector in Tanzania

Paper 5: Hydrocarbon Potential for TPDC Blocks 4/1B and


4/1C Offshore
Southern Tanzania

Asiadi R. Mrutu

Tanzania Petroleum Development Corporation, Directorate of Upstream


P.O. Box 2774, Dar es Salaam, TANZANIA
E-mail: amrutu@tpdc-tz.com, asiadi2001@gmail.com
Abstract
Under new Petroleum Act, 2015, TPDC is currently operating as National Oil
Company with mandate to conduct petroleum reconnaissance, exploration,
development and carrying out specialized operations in the petroleum value
chain in Tanzania. Through the Government Notice(GN 184) published on
20th May,2016, the Ministry of Energy and Mineral exclusively reserved
Blocks 4/1B and 4/1C for National Oil Company (TPDC). The two Blocks
located in Southern Tanzania bordering to the south by Mozambican Blocks
which is estimated to have total of about 200TCF natural gas discovery and to
the North and Western side bordering Blocks 1, 2, 3 and 4 with total
estimated resource of about 47.13TCF gas discovery.
Blocks 4/1B and 4/1C are covered by 2682 Line Kilometre sparse 2D seismic
data processed on both Pre-Stack Time Migration and Pre-Stack Depth
Migration. These includes 802 Line Kilometre acquired and processed by
Western- Geco and 1880 Line Kilometre Acquired and processed by GX
Technology. TPDC is planning to acquire 4058km (3km x 3km grid) infill 2D
seismic survey over the two Blocks with the objective to increase
understanding in terms of hydrocarbon potential and locate the future
drillable prospect. TPDC will then farm out some of its share interest to
strategic partner from which they will operate together to develop these two
Blocks.
Along East African margin, the existing recent discoveries are located in the
water depth less than 2000m, which gives indication that there are working
petroleum system in the region i.e. mature source rock and presence of
reservoir rocks. The detail studies conducted using 2D seismic interpretation
approach aiming to identify and map any possible areas with plays and
prospect for future hydrocarbon exploration. The literature review suggesting
that, the petroleum systems along the region are closely linked to Karoo
continental rifting phase during Permian to Early Jurassic, and to a
24 TOGACE - 2016
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Status of Investment in the Oil and Gas Sector in Tanzania

subsequent passive margin setting. The tectonic setting was closely linked to
the Gondwanaland break-up during Permo-Triassic period. Four mega-
sequences have been identified i.e. Pre-rift phase (Karoo phase), Syn-Rift
Phase, Post-Rift phase and recent East African Rift System. The sequence
boundaries were used to control the extrapolation for the reservoirs from
nearby discoveries. The extrapolation for the reservoirs is supported by the
clear evidence that, the deposition for Ruvuma Channel extends to the deeper
part offshore southern Tanzania bypassing Davie Ridge Fracture Zone.
In this study the stratigraphic and structural model were integrated with the
extrapolated reservoir rocks and used to define the sub-surface geological
model. This model was used as the bases for plays and prospects mapping
from which nine prospects were mapped followed by producing detail
structural contour map for each prospect. Initial results indicating that the two
Blocks are highly prospective with the prospect mapped with large volumes
compared to the surrounding gas field.
Keyword: TPDC Blocks 4/1B and 4/1C ,

25 TOGACE - 2016
25
Technologies for Value Addition of Natural Gas

SESSION A3: Technologies for Value Addition of


Natural Gas Experiences from Other
Countries

TOGACE - 2016
26 26
Technologies for Value Addition of Natural Gas

Keynote Presentation 2: Oil and Gas Economy: An


Ambivalent Path for Tanzania
Donald Mmari

REPOA, 157 Mgombani Street, Regent Estate, P.O. Box 33223, Dar es
Salaam, Tanzania, Website: www.repoa.or.tz

Abstract

The divergent development outcomes in resource rich countries raise the need
to question the scope of our understanding and translating the notion of oil
and gas economy, which appears to be very divergent too. Recent
discoveries of natural gas in Tanzania have led to a widespread belief that
Tanzania is heading towards a gas economy. There has not been consensus,
however, of what gas economy implies, and if, in this case, substance prevails
over form. Drawing on the desk review of literature and available data on the
trends in the oil and gas industry and selected indicators in six resource-rich
countries, this paper argues that the economic, social, and political outcomes
of endowments in oil and gas depends on how these resources are exploited,
utilized, and distributed. It further argues that, gas economy is not to be
viewed as an enclave economy, but rather as an integrated whole in which the
economy transforms towards a diversified and resilient economy, bringing
along it generalized social progress - reduced poverty, equitable growth in per
capita income, and stable and secure population.

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TOGACE - 2016
Technologies for Value Addition of Natural Gas

Paper 6: Natural Gas Modes of Transportation for


Tanzania
Adela Syikilili and Abraham Temu

Department of Chemical and Mining Engineering, University of Dar es


Salaam, P. O. Box 35131, Dar es Salaam, Email: amsyk2000@yahoo.com

Abstract
Tanzania is one of the countries with substantial discoveries of natural gas
reserves. As of June 2015, Tanzania had offshore fields with about 47.08 tcf
and onshore fields with about 8 tcf. Currently, there is production of about
150MMscf/day from two onshore fields of SongoSongo and Mnazi Bay. It is
planned that about 90% of the natural gas from the deep sea fields will be
exported as LNG and the remaining portion will be utilised within the
country. Although the local market for natural gas is still small it is expected
to grow very soon and fast. Currently, natural gas utilisations includes:
generation of electricity; industrial heating mainly in Dar es Salaam region
and CNG for vehicles (only one station) and hotels where piped natural gas
(PNG) is not available. The gas fired power plants produce about 50% of the
electric power produced in the country; the remaining proportion being from
hydropower (40%) and diesel fired plants (10%). There are plans to extend
natural gas utilisation within the country to supplement other used forms of
energy like charcoal and firewood which are not environmental friendly. In
doing so, a wise selection of natural gas transportation modes need to be
done.
This paper aims at describing natural gas transport modes which can be
applied within Tanzania. Factors affecting transportation modes considered
are distance, demand volume, present reserves, technology challenges,
capital, gas field location, operation costs and safety issues. It is assumed that
the natural gas will be transported from Mtwara region to other regions of
Tanzania as far as Kagera where the longest distance considered is 2000 km.
PNG, GtW, CNG, NGH, and micro LNG are considered in this discussion.
A short description of each method is presented in this paper together with
their comparisons. The discussion is based on different factors affecting each
method such as cost (initial and operational cost), payback period,
infrastructure needed, safety issues, level of employment opportunities,
market required and flexibility of delivery. Considering these factors, most
appropriate method for Tanzania situation is recommended. In addition, the
paper discusses opportunities likely to be offered by each natural gas
transportation mode.
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Technologies for Value Addition of Natural Gas

Paper 7: Upstream Concept Selection for Tanzania Deep


Sea Gas
Felix Nanguka,
Tanzania Petroleum Development Corporation, P.O. Box 2774, Dar es
Salaam, Tanzania; felix.nanguka@tpdc-tz.com

Abstract
Tanzania has made a huge discovery of Natural Gas in the deep sea
(offshore). To commercialize these resources will require a proportion of the
gas, in the form of liquefied natural gas (LNG), to be exported for sale in
international markets. Two operating companies (with their respective
partners) discovered these resource in three different licensed Blocks.The
Government of Tanzania (GoT) has meanwhile requested the companies to
cooperate in developing an onshore joint LNG plant. Each of the offshore
block (1, 2 and 4) will be developed as stand-alone projects and then to form
the onshore integrated LNG project constituted by all upstream gas
developers.
The Tanzania Gas & LNG project is planned to pass through several phases
before first gas being produced. The planned phases include: Land/Site
Acquisition; Pre- Front End Engineering Design (Pre-FEED); Front End
Engineering Design (FEED); Final Investment Decision (FID), Construction
phase and finally the first gas being produced leading to the first LNG train
takeoff.
The rationality of the project is attained by evaluating technical and
commercial viability. Technical aspect of the project has progressed to the
level that, upstream development concept for two blocks have been chosen
and further studies are going on to delineate the viable concept for the
remaining Block. The commercial aspect of the project has not progressed
much as GoT and International Oil Companies (IOCs) are yet to engage in
Host Government Agreements (HGA) negotiations. The HGA has many
agreements that IOCs and Host government have to enter with in respect to
the upstream development, construction and operation of a project to
minimize the financial and political risks posed to foreign investors as a result
of sudden changes in governing law as well as governing rights and
obligations of the parties. Once HGA is signed, the project will develop to the
Pre- FEED and subsequent phases as elaborated above.
29 TOGACE - 2016
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Technologies for Value Addition of Natural Gas

This paper will deliberate the concept selection studies for the upstream
development Blocks as done by IOCs. The Technical, Economical and other
non-technical criteria for what entails in the concept select have been
discussed subsequently the selected concept for Tanzanian LNG project was
established.

30
30 TOGACE - 2016
Technologies for Value Addition of Natural Gas

Paper 8: The Natural Gas Market-what should be done in


Tanzania?

Emma S. Msaky
President's Office, Oil and Gas Advisory Bureau (OGAB),
P. O. Box 9120, Dar es Salaam. TANZANIA
E-mail: emmaeliona2012@gmail.com

Abstract

Natural gas is important source of energy worldwide; it burns efficiently and


it is clean compared to other sources of energy such as oil and coal. Tanzania
has currently discovered significant natural gas from deep waters (offshore).
In 1974 natural gas was discovered onshore in the Songo Songo Island, in
Mnazi Bay (1982), Mkuranga (2007), Kiliwani North (2008), Ntorya (2012)
and Ruvu (2015). Production of natural gas in the Songo Songo (SS) field
(since 2004) and Mnazi Bay (MB) field (since 2006) has been generally
steady. The SS and MB fields natural gas is used mainly for generating
electricity. Currently investors of the SS field have done work-over of three
wells (SS 5, 7 and 9) successfully and drilled SS-12. Also investors of MB
field have drilled MB-4 successfully. Such operations increased gas supplies
from these fields. Supposedly, such increase in gas supplies has to be utilized
in the natural gas market locally or regionally. Hence, Tanzania should
conduct strategic natural gas market research in order to underpin and capture
the potential customers locally and regionally.

With the economy becoming more and more competitive, having right
knowledge about the concerns and preference of natural gas customers in
Tanzania and regionally is critical. Unequivocally, strategic natural gas
market research in Tanzania will help in identifying new business
opportunities, target the interest of current potential customers and thus
increase sales of the Tanzanian natural gas. This will result into increase in
revenues and thus economic growth. Also, strategic natural gas market
research in Tanzania is the best way to reveal new potential customers,
increase current potential customers satisfaction, capture the available local
and regional market, understand the factors that affect the natural gas
business and elevate natural gas business performance in the country. More
importantly, strategic natural gas market research in Tanzania will stimulate
establishment of new industries (locally) which will utilize natural gas as a
31 TOGACE - 2016
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Technologies for Value Addition of Natural Gas

feedstock and thus contribute to Tanzanias ambition of becoming an


industrialized country by 2025.

This paper discusses the significance of natural gas market research in


Tanzania and its consequence to the natural gas business locally and
regionally.

Keyword: Natural gas market research, Natural gas business

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32 TOGACE - 2016
Technologies for Value Addition of Natural Gas

Paper 9: Present Oil exploration focus in the Eyasi-


Wembere Block by recent Airborne Gravity
Gradiometry and aeromagnetic survey

Sindi Maduhu Gumha

Tanzania Petroleum Development Corporation,


Directorate of Upstream
P.O. Box 2774, Dar es Salaam, TANZANIA
E-mail: smaduhu@tpdc-tz.com, smaduhu80@gmail.com

Abstract

East African Rift System is a focal point for Oil exploration in East Africa.
Following discovery of Oil at Albertine basin in Uganda and Turkana in
Kenya, Tanzania is currently focusing on the Eyasi-wembere Basin which
have nearly similar Characteristics/formation.The study of basin architectures
in the rift is of great important due to Hydrocarbon discovery in other rift
areas which contributes up to 30% of hydrocarbon global discovery.

Progress has been made to understand the evolution of the rift system and
Sediment accumulation. The Eyasi-Wembere basin is among the
asymmetrical, extensional rift basins that have developed along the eastern
arm of the East African Rift System (EARS). Little was known on the intra-
basin structures and faults bounding the basin. Stratigraphy of the
sedimentary deposits in the rift basin still unknown due to lack of exposure of
rocks. A thick volcanoclastic sediments and fluvial-lacustrine sediment may
be overlying potential reservoir and source rocks in the area.

The Eyasi-Wembere basin is an open Block that has approximate area of


1800km2 and has no seismic coverage or wells. Legacy aeromagnetic and
limited ground gravity data suggest the presence of suitably thick sediments
in places. In order to target and optimize future seismic surveys an airborne
gravity gradiometry (AGG) and magnetic survey was conducted over the
entire block. The same exploration strategy was successfully employed, for
example, for the N. Turkana basin (Kenya) and Lake Albert (Uganda).

Integrated interpretation of the survey results has mapped and modelledthe


maindepocentres, key boundary structures and internal basin faulting.
Combination of structural/stratigraphic trap at pinch-outs and facies changes

33 TOGACE - 2016
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Technologies for Value Addition of Natural Gas

are expected to be the Plays/traps in the area. Priority areas with deep
sediments for further exploration/detailed follow-up and seismic surveys are
clearly defined. The depth of sediments in the identified areas are deeper
enough for oil generation and accumulationand thats why this basin is
ranked high for investment in oil exploration.

Keywords: AGG, Eyasi-Wembere, EARS, Basin

34
34 TOGACE - 2016
Gas Policy, Local Content Policy

SESSION A4: Gas Policy, Local Content Policy


Opportunities and Challenges for Their
Implementation 

35 35
TOGACE - 2016
Gas Policy, Local Content Policy

Keynote Presentation 3: Corruption in The Oil and Gas


Sector: Impact
Mr. Mlowola, V,

CEO, (PCCB)

36
36 TOGACE - 2016
Gas Policy, Local Content Policy

Paper 10: Skills Gap Analysis for Oil And Gas Development
In Tanzania
Happiness N. Mgalula, Josiah A. Mwabeza, Eng Omari Athumani, Chacha
Nyamuhanga, and David Mwankenja
10 Kivukoni Front, PO.BOX 9242, 11405 Dar es Salaam, Tanzania.
hmgalula@gmail.com, mwabeza@gmail.com, oathumani@yahoo.com,
cnyamuhanga@gmail.com, nkenja1@yahoo.co.uk,

Abstract
Despite the potential for massive socio-economic transformation associated
with significant natural gas discoveries, these discoveries on the other hand
pose more challenges on effective and efficient management of the industry
in order to maximize countrys benefit. Amongst these challenges is the
shortage of skills needed for Tanzanians to participate effectively in the oil
and gas industry. This situation poses a serious concern on the extent to
which these discoveries can results into significant and long lasting socio-
economic benefits to the large segment of the population. This paper
therefore intends to analyze skills gap in the Tanzania oil and gas subsector
along with oil and gas skills development initiatives and advise the
Government and other key stakeholders on the appropriate interventions to
address the impending skills gap and promote local content.
Study findings unveiled existence of skills gap in the oil and gas industry in
Tanzania; absence of nation-wide Skills Needs Assessment (SNA) in the oil
and gas industry; limited coherence and complementarities between oil and
gas skills development interventions undertaken and absence of nation-wide
natural gas human resources and skills development strategy. To address the
skills gap, the paper recommends for: carrying out nation-wide oil and gas
Skills Needs Assessment (SNA); developing national strategy for oil and gas
skills development; and reviewing and upgrading academic and technical
curriculum to cater for oil and gas industrys skills needs.

Keywords: Oil and Gas, Skill Gap, Local Content Skills Needs Assessment
(SNA)

37 37
TOGACE - 2016
Gas Policy, Local Content Policy

Paper 11: Statoil Sustainable Capacity Building Programs in


Higher Learning Education in Tanzania
Ghati Mwita1 and Richard Rwechungura2
1
Statoil Tanzania AS, P.O BOX 713 Dar Es Salaam, gmw@statoil.com
2
Statoil Tanzania AS, P.O. Box 713 Dar Es Salaam, rrw@statoil.com

Abstract
Statoil approach towards institutional capacity building in Tanzania is
modeled on supporting collaboration and technology transfer between
Tanzanian universities and more experienced international universities in the
sector so as to enable local institutions to offer quality petroleum related
programs. Up-to-date, Statoil has initiated and supported collaboration
between University of Dar Es Salaam College of Engineering and
Technology (COET) and the Norwegian University of Technology (NTNU),
University of Dodoma (UDOM) and University of Barcelona, University of
Dar Es Salaam Business School (UDBS) with University of Stavanger,
University of Dar Es Salaam Geology Department and University Oslo.
Through these collaborations, Statoil also provides scholarships to Tanzanian
students in areas of oil and gas, exchange programs for University lecturers,
supports field courses, guest lecturing and Training of Trainers programs. In
addition, Statoil donates laboratory equipments and experimental cores to
UDOM and UDSM.
The results of these programs include new bachelors and masters programs in
areas of oil and gas, quality research papers/theses and increased number of
oil and gas professionals. The programs are Master Program of Finance and
Accounting in Oil and Gas (MFA-OG) at UDBS, Master of Petroleum
Geology at UDOM. The number of students benefited from these
scholarships as of September 2016 is 80. Graduates from respective programs
have been employed by Tanzanian universities to sustain the above programs;
while other graduates have been absorbed in both the public and the private
sector locally and abroad.
There are various operational challenges experienced with the university to
university collaboration model, nevertheless it has so far proven to be more
sustainable to build institutional capacity locally as opposed to building
capacity through international scholarships alone. It is hoped that this model
will continue to lay a foundation in capacity building at the tertiary education
level.
38 TOGACE - 2016
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Gas Policy, Local Content Policy

Paper 12: Gas Policy and Local Content Policy For Their
Implementation

E. Kavana

Acacia Mining PLC, Technical Services, Department of Geology,


Mine Production Geologist in Alimak raise, Sill Pillar, Drift and Fill and
Long Hole

P. O. Box 75864, Dar es Salaam, Tanzania, East Africa


Email: ezrakavana2@gmail.com
+255785328212
Abstract
Many communities in East Africa are facing challenges that come with oil
and gas development, as development can have both negative and positive
environmental, economic and social impacts on communities. Establishment
of a working relationship with industry can help to both address and resolve
issues stemming from development, and lay the foundation for an ongoing
dialogue between community stakeholders and industry. This study is
intended to provide communities with the resources they need for successful
planning, coordination with industry, and navigation of regulations that apply
to oil and gas operations. Constructive Engagement is an approach that brings
communities, local governments, environmental groups and oil and gas
companies together to address social and
environmental issues through cooperative and partnerships. Though many
communities may only require open lines of communication and a good
working relationship with industry, a more formal collaborative process can
be a useful approach in finding solutions. Plans and Agreements address
natural gas development in identified geo- graphic areas. The areas may vary
in size, but all address development on a scale larger than a single well permit
site. Two of the plans are established in statute or regulations; the other plans
and agreements are processes independently initiated between communities
and industry. Community Development Plan Is a plan made between the
communities being affected by oil and gas development and the operator the
goal of this is to initiate a relation- ship between community and operators
that will promote transparency, reduce conflict, and give the community an
opportunity to participate in decision making regarding oil and gas
development in their area. Community Resources in addition to leadership
and cooperation amongst stakeholders, community planning requires
information about projected population growth, infrastructure, service
39 TOGACE - 2016
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Gas Policy, Local Content Policy

provision, costs and more. Regulatory Bodies Oil and gas development in a
community may be regulated by state and local law as well as all levels of
government agencies.

Keywords: Communities, Oil and Gas, Environmental

40
40 TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements

SESSION B1: Regulatory Framework, Strategies and


Institutional Arrangements

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TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements

Keynote Presentation 4: Transparency in the Oil and Gas


Sector: Challenges and Opportunities
Prof. Assad, M. J.,

Controller and Auditor General (CAG)

Introduction

Oil and gas is a source of wealth, a source of social-economic development,


and so it is a blessing to the society in which the deposit is discovered1. This
is the belief and perception that will be in the minds of almost every
individual in the community where resource deposit is discovered. People
would happily receive the information and expect the sudden changes of their
social statuses. It is disappointing to note that often and specifically in
emerging economies, things are not moving in that direction. Before oil and
gas reserves turn into wealth, there is a long value chain that prevails and that
chain consumes a substantial of capital investment2.

Tanzania discovered gas in the year 1974 through the discovery well, Songo
Songo-1, which was drilled in l974 by AGIP, followed by a discovery well
drilled by AGIP, Mnazi Bay-1, in l982 but more deposits discovered in years
2010 after start of off shore exploration3. The earlier years of gas discovery
placed the gas on the least important resource and nothing happened to
process it for about 20 years where the Government decided to use the gas for
power production through Songas Thermal Power Station of 2004 4. During
this time, most of people would not bother on what was happening with gas
because the gas itself was not that important resource and a source of social
economic development. This was because the price of the gas was relatively
less and so not that important. The years from 2010 witnessed more
exploration going offshore where they came up with huge discoveries and
during this time, the product became important and with good price and uses
in the market. This is where peoples interest, institutional interventions and
need of appropriate legal regime and institutional set up became relevant.
With such pressure of every stakeholders attention, transparency becomes an
important tool in managing the pressure of stakeholders interests.

1
Tony Wood (2007)
2
World Bank (2009)
3
http://www.tpdc-tz.com/songosongo.php
4
https://en.wikipedia.org/wiki/List_of_power_stations_in_Tanzania
42 TOGACE - 2016
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Regulatory Framework, Strategies and Institutional Arrangements

Paper 13: Value chain around major projects in the O&G


sector
Maina Kigundu,

East Africa Head, Oil & Gas, Stanbic Bank

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TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements

Paper 14: Tanzania Block 2 Subsea to Shore Development


Patrice Aguilera

Statoil Tanzania AS, P.O BOX 713 Dar Es Salaam, paagu@statoil.com

Abstract
Statoil was awarded Block 2 in 2007, and in 2010 ExxonMobil farmed in as
Co-venture with 35%. The first 3D seismic data was acquired in 2009
covering the area around the Sea gap strike slip fault and its associated pop
up structures and pull apart basins. 14 wells have been drilled in total in the
block (ten wildcats and four appraisals wells) have been drilled in the block
from 2012 to 2015. During 2013 the 3D data coverage was extended to 6000
km2 including the West side, Davie-Ridge and Sea Gap extension surveys.
The total drilling success rate has been outstanding; eight out of ten wildcat
wells have proven gas, at several stratigraphic levels.
The discoveries in Tanzania Block 2 are located some 100 km offshore
Tanzania at a water depth of approximately 2500 meters.
The resource base of the block will likely be the foundation for a mega gas
development project, including all the development phases from exploration
to production. The full value chain development project will comprise
reservoir extraction through subsea wells and a subsea production system,
pipelines to an onshore LNG plant as a well as subsequent gas distribution to
the domestic and international gas markets. The project will be technically
challenging and demanding, the Contractor Group with Statoil (Operator
65%) and ExxonMobil (partner 35%) is presently preparing technical
solutions for this challenging development.
The presentation will give a description of the potential offshore development
concepts including the Subsea Production Systems and field Layouts for
transportation of the well stream to the LNG plant onshore

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44 TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements

Paper 15: Analysis of the Regulatory Framework and


Institutional Arrangement in the Tanzania
Petroleum Act, 2015

John G Mgayambasa
Tanzania Petroleum Development Corporation, Benjamini W. Mkapa
Towers, Azikiwe Str., P. O. Box 2774 Dar es Salaam, Tanzania
jmgayambasa@tpdc-tz.com, +255682150994

Abstract
Tanzania has recently passed a new Petroleum Act, 2015 (the Act) which
repeal the Petroleum (Exploration and Production) Act, 1980 (PEPA) and
the Petroleum Act, 2008. The Act, provides a new legal framework and
institutional arrangements in the oil and gas subsector which differs from
the old regime.
The Act provides for the regulation of petroleum activities from upstream
to downstream. The Act introduces two new institutions; the Petroleum
Upstream Regulatory Authority (PURA) and Oil and Gas Advisory
Bureau (OGAB) and reforms the powers and functions of the Ministry of
Energy and Minerals (MEM), Tanzania Petroleum Development
Corporation (TPDC) and Energy and Water Utilities Regulatory Authority
(EWURA). It also designates TPDC as the National Oil Company.
The Act divides the oil and gas legal framework into twelve parts covering
various issues ranging from application of the new legal framework,
powers of Revolutionary Government of Zanzibar in relation to petroleum
located in Zanzibar, institutions involved and regulation of the upstream
and downstream petroleum activities. Other major issues covered by the
Act includes:-health and safety, environmental principles, Government
participation in petroleum affairs, local content, corporate social
responsibility, integrity pledge by oil company and fiscal regime
applicable to petroleum industry.
This paper provides an analysis of the legal framework introduced by this
Act by looking at how various changes introduced in this Act will help to
regulate the petroleum industry in Tanzania. It analyzes the extent to
which the new legal framework differs with the old regime.

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Regulatory Framework, Strategies and Institutional Arrangements

Moreover, the paper makes an analysis of the institutional arrangement


introduced by the Act and the relationship between one institution and
another.
In conclusion it suffices to say that, the Petroleum Act, 2015 transforms the
petroleum institutional arrangements by introducing two new institutions
(OGAB and PURA) and reforming the powers and functions of the old
institutions (MEM, TPDC and EWURA). The Act strengthens provisions
relating to local content, capacity building, environment, health, and safety
issues and legislate some of the terms and conditions that are provided for in
the Model Production Sharing Agreement 2013. The Act also introduces
provisions that govern downstream gas activities which was not provided for
in the old regime.

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Regulatory Framework, Strategies and Institutional Arrangements

Paper 16: Natural Gas Pricing and Policy for Fertilizer


Production; Experience from Other Countries

Diana Byonge1, and Lwaga Kibona2


1
UDSM; 2Tanzania Petroleum Development Corporation

Abstract

Natural gas is the primary feedstock for fertilizer (ammonium production)


and accounts for up to 80% of the total production cost of ammonia. On
average, ammonia producers require 36 mmBTU of natural to produce one
MT of ammonia. This means the price of natural gas to be used in fertilizer
plant contributes to high extent on the price of the final product. Based on this
fact, Tanzania is in amid of developing ammonia fertilizer plant and the cost
of natural gas cant be ignored to make the project feasible.

There has been different policies and pricing methodologies in countries


which have been succeeded in developing fertilizer industries. In most cases,
the government provides favorable policies, subsidizes the input prices and
sometimes the output prices for the fertilizers produced and consumed in the
country. This paper will survey policies and pricing mechanism around the
World for those countries that have developed fertilizer plants. The paper will
also recommend on the policies and natural gas pricing methodology that will
nurture fertilizer industry development in Tanzania.

47 47
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Utilization of Natural Gas

SESSION B2: Utilization of Natural Gas Present and


Future / Other Crosscutting Issues of
Health, Safety Environmental and Related


48
48 TOGACE - 2016
Utilization of Natural Gas

Keynote Presentation 5: Tax and Taxation in the Oil and Gas


Sector
Prof. Luoga, F.,

DVC-Academic, UDSM

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Utilization of Natural Gas

Paper 17: Utilization of Natural Gas - Present and Future


(Tanzanian perspective)
Gabriel N. Bujulu

P. O. Box 31437 Dar es Salaam, Tanzania; gbujulu@gmail.com;


bujulu2011@yahoo.com

Abstract
This paper presents and discusses various uses of natural gas in Tanzania
with emphasis in power generation now and in the future. In the process it
also looks at how natural gas is used worldwide.
Natural gas is a fossil fuel which is naturally occurring gaseous mixture of
light hydrocarbon, which is found underground in sedimentary rocks. The
main constituents of natural gas are methane, ethane, propane, butanes and
pentanes. Other compounds include carbon dioxide, hydrogen sulphide and
nitrogen and other rare gases. Other fossil fuels include coal and liquid
petroleum (oil).
The origin of natural gas like other fossil fuels has many theories but the
generally accepted one is that the fossil fuels are formed when organic matter
(such as the remains of plants and animals) buried at great depth is
compressed under the earth, at very high pressure and temperature for a long
time.
Normally natural gas is found in areas where oil is also found, and may be
associated (gas from oil reservoirs) or non- associated gas (gas found in gas
reservoirs). The largest gas reserves are found in the Middle East followed by
Europe and Eurasia, Asia and Pacific, Africa, North America, South and
Central America. As of December 31, 2015 total proved gas reserves stood at
6,599.4 trillion cubic ft (186.9 trillion cubic meters).
The main uses of natural gas are:-
(i) Power generation as turbine fuel
(ii) Industrial uses as process heat to replace heavy fuel oil
(iii) Residential and commercial for heating and cooking
(iv) Manufacture of fertilisers (urea and ammonia)
(v) Petrochemical manufacturing as feedstock.
(vi) In transportation as compressed natural gas (CNG)
(vii) Gas to liquid conversion (GTL)

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Utilization of Natural Gas

In Tanzania natural gas is mainly used for power generation (almost 80%)
and in industries, prison barracks, homes and hotels and as compressed
natural gas for vehicle fuel.
In Tanzania there are onshore and offshore gas discoveries. The onshore
discoveries at Songo Songo (1974) and Mnazi Bay (1982) are already put
into use, Kiliwani production is also starting up but with other discoveries
still to be developed (Mkuranga, Ntorya, and a newer discovery in the Ruvu
basin). The offshore discoveries which forms the bulk of gas reserves in the
country (reserves approximate to 48.7TCF) is currently at development stage.

This paper will discuss in details gas utilization in the power sector in
Tanzania that consumes more than 80% of current gas production in the
country. Gas-based power generation by use of gas turbine or gas engine has
several benefits among them:
(i) It uses natural resource found in the country so saving in generation
fuel cost and foreign exchange
(ii) It is relatively quicker to build and commission compared to
alternative sources.
(iii) It is a clean burning fuel thus protecting the environment.

In conclusion Tanzania electricity power generation level is still very low


while consumption is on the raise. Tanzania needs a fast means to generate
more power for the national grid and where possible even to export power to
neighbouring countries. This can rapidly be achieved by use of gas based
power generation which is faster to construct and commission than other
alternatives like coal or even new hydro. The country's long term strategy for
base load power generation should focus on the use of relatively cheaper
sources like coal, hydro, wind, geothermal etc. Natural gas use in power
should remain for peaking reasons otherwise the gas be used in value addition
areas like as feedstock in petrochemical industries, fertilizer manufacturing,
petrochemical plants and for household energy.
Key words: What is natural gas, where major gas field are located worldwide,
uses of natural gas in power generation

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Utilization of Natural Gas

Paper 18: Natural Gas Utilization in Tanzania Beyond


Energy Use
Abraham Temu and Adela Syikilili

Department of Chemical and Mining Engineering, University of Dar es Salaam,


P. O. Box 35131, Dar es Salaam Email: amsyk2000@yahoo.com

Abstract

Natural gas reserves worldwide are increasing as the rate of new discovery is
greater than the rate of consumption. This increased production has made
natural gas more affordable. From 2004 to 2008, natural gas price averaged
around $7/MMBtu, with a peak of more than $12/MMBtu. Today it is
hovering at around $2/MMBtu whereas crude oil is around $48/bbl. For the
same amount of energy content, natural gas costs one seventh that of crude
oil.
The fast growth of natural gas production is creating a need to develop
technologies for its efficient use which include reduction of amounts of
underutilized gas that is still flared or vented. Enhanced gas conversion into
other uses may play a key role in this respect.
The most efficient use of natural gas is direct conversion to electric power or
use as a fuel for domestic needs, such as cooking. Based on the fact that most
of the urban areas in Tanzania are unplanned, the latter use of natural gas will
take a long time and substantial financial resources to fulfil. With the
anticipated offshore natural gas production in the 2020s, electricity needs and
other industrial energy needs will be met and there will be excess gas.
Besides, 90% of the offshore gas is meant for export to the Far East (China
and Japan) with little value addition (liquefaction). Alternative uses of
natural gas are thus worth thinking about. This calls for production coupled
with use and export of more value added products which are more profitable
than direct combustion of the natural gas to energy/electricity or exporting it
as liquefied natural gas (LNG).
Tanzania has been spending substantial amount of money to import methanol,
ammonia (anhydrous or in aqueous solution), ammonia based fertilizers
(ammonium sulphate and ammonium nitrate) and plastic beads (polyethylene
and polypropylene). All these are natural gas based products. Increased
demand is dictated by increase in population, increase in purchasing power of
the people and growth in industrialisation. Local production of these
chemicals not only will serve some foreign currency required to import such
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Utilization of Natural Gas

chemicals, but will increase availability and accessibility of the same as well
as creating employment for Tanzanians thus reducing poverty.
This paper provides highlight of the current and future demand for different
natural gas based chemicals in Tanzania and associated costs. In addition, the
paper discusses existing and required policies and legal framework together
with the required skills for implementation and success of the anticipated
industries.

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Utilization of Natural Gas

Paper 19: Utilization of Natural Gas Present and Future


Eng. Norbert A. Kahyoza1 & Ebeneza P. Mollel2
1
Assistant Commissioner for Natural Gas at the Ministry of Energy and
Minerals
E-mail: nortbert.kahyoza@mem.go.tz
2
Geologist at the Ministry of Energy and Minerals
E-mail: ebenezamollel@yahoo.com

Ministry of Energy and Minerals,Department of Energy and Petroleum


Affairs, Natural Gas Section,
P.O.Box 2000, Dar es Salaam, TANZANIA

Abstract

Natural gas is a vitally important source of energy for all sectors of the
economy. Natural gas is utilized in various areas such as in power generation,
transportation, petrochemical industries, manufacturing industries and
domestic. Utilization of natural gas usually requires investments in gas field
development, gas processing facilities and gas transportation means to end
users. Most of the facilities employed in gas utilization and particularly gas
transportation pipelines are capital intensive and cannot be readily expanded
once the initial
capacity has been established.

Utilization of natural gas at whichever level comes as a result of a


combination of factors including the natural gas price, demand and
supply, existence of infrastructure, national initiatives and strategies, as
well as availability and convenience of alternative sources of energy which
are cost effective.

The main challenge in the utilization of natural gas is whether gas can be
made available at prices that are affordable to all consumers while
simultaneously assuring profit to the capital- intensive investments in gas
supply. The key target of any gas system is the rapid development of a large
enough market to justify the capital-intensive installations required. This is
particularly true for off-shore gas developments whose costs can be several
hundred percent higher than those of on-shore lines, depending on water
depth, sea bed conditions, and actual locations. Natural gas, if its economic
value is low enough, can serve as a substitute for petroleum products.
54
54 TOGACE - 2016
Utilization of Natural Gas

substitute for petroleum products. Utilization of Natural Gas

substitute
Since 2014,forthepetroleum products.
global demand for natural gas has grown by more than half.
This growth is the fastest among the fossil fuels. With the increasing global
Since 2014,
trade in the global
liquefied demand
natural for natural
gas (LNG), gasofhas
the risk growndisruptions
supply by more than half.
has been
This growth
greatly is the fastest
minimized. Among among the that
regions fossil fuels.
push With
global gasthedemand
increasing global
higher are
trade
Far East, with China and Japan being the biggest consumer of natural been
in liquefied natural gas (LNG), the risk of supply disruptions has gas.
greatly minimized.
Despite the higher Among
demandregions that push
of natural gas global gas demand
at global higher gas
level, natural are
Far East, with
production as ofChina
June and
2015Japan
seemedbeing the biggest
to decrease consumer
slightly belowofaverage
naturalingas.
all
Despite the higher demand of natural
regions with the exception of North America. gas at global level, natural gas
production as of June 2015 seemed to decrease slightly below average in all
regions
For the with
casethe
of exception
Tanzania,ofnatural
North America.
gas consumption started in 2004 when
Songo Songo production commenced. The gas produced is utilized in
For the areas
various case ofsuch
Tanzania,
as in natural gas consumption
power generation, started
industries, in 2004
hotels, when
institutions
Songo Songo production
and households. commenced.
In magnitude The gas produced
of consumption, is utilized
power generation is thein
various areas such as in power generation, industries,
leading accounting for about 80% of all natural gas produced annually hotels, institutions
and households.
amounting 35 BCF. In As
magnitude of consumption,
of June 2015, the installed powercapacitygeneration
of the gasisfired
the
leading accounting for about 80% of all natural gas
power plants was 586.5 MW. Industries consume natural gas mainly as a fuel produced annually
amountingindustrial
replacing 35 BCF.diesel
As ofoil June
and2015,
heavythe fuelinstalled capacity
oil for steam of the gas
generation, fired
furnace
power plants
heating etc. Awastotal
586.5ofMW. Industries consume
37 industries are currently natural gas mainly
connected to as
thea fuel
gas
replacing industrial diesel oil and heavy fuel oil for steam
distribution network in Dar es Salaam consuming about 19.8% of all natural generation, furnace
heating etc. Aannually.
gas produced total ofThe37 rest
industries are currently
of natural connected
gas is consumed to the gas
by households
distribution network in Dar es Salaam consuming about
(70), commercial and public institutions (3), fuel for vehicles (60 CNG 19.8% of all natural
cars),
gas produced annually. The rest of natural gas is consumed
which in combination, consumes less than 0.2% of all natural gas produced by households
(70), commercial
annually. Natural and
gas public institutions
utilization in Tanzania(3), fuel for at
is still vehicles
marginal(60level
CNGdue cars),
to,
which in combination, consumes less than
among other factors, lack of adequate infrastructure. 0.2% of all natural gas produced
annually. Natural gas utilization in Tanzania is still at marginal level due to,
among
However, other
in factors,
order tolack of adequate
foster infrastructure.
development and utilization of natural gas in
Tanzania, the Government has put a clear policy, legal and regulatory
However,
frameworkinthatorder to exploration
guides foster development and utilization
and development of natural
and utilization gas in
of natural
Tanzania, the Government
gas. A strategic has put sources
plan that identifies a clear and
policy, legaltoand
projects regulatory
stimulate and
framework that guides exploration and development and utilization
guide investments in natural gas from 2015 - 2045, the Natural Gas of natural
gas. A strategic
Utilization Masterplan
Planthat identifies
(NGUMP) sources
is still underand projects to stimulate and
preparation.
guide investments in natural gas from 2015 - 2045, the Natural Gas
Utilization
This paper Master Plan (NGUMP)
will provide the details is
of still under preparation.
the Natural Gas Utilization Master Plan
(NGUMP) and opportunities arising from its implementation for Tanzanians
This paper will provide the details of the Natural Gas Utilization Master Plan
to participate
(NGUMP) and opportunities arising from its implementation for Tanzanians
to participate

55 TOGACE - 2016

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Utilization of Natural Gas

Paper 20: Health, Safety and Environmental (HSE) Issues of


Concern and Preparedness in the Oil and Gas
Industry in Tanzania
Godwill Mrema
Tumaini University, Dar es Salaam College TUDARCo; P. O. Box 77588, Dar es
Salaam; Website:www.tudarco.ac.tz; Email: gdmrema@yahoo.com; Fax +255-22-
2760432

Abstract

The discovery of huge natural gas in Tanzania is expected to boost economic


opportunities for Tanzania and enhance its chance for graduation into the
gas economy and improve prosperity and prospects for poverty eradication
among Tanzanians. Until June 2016 a total of 55.24 trillion cubic feet (tcf)
(about 47.07 tcf from offshore and 8.11 tcf from onshore fields) had been
reported. The figures further indicate that more than 80% of the reported
discoveries is from the offshore (deep water and far away from the shore).
About 90% of the deep water fields will be processed into LNG for export
while the rest will be utilised locally at the import substitution industries to
make products like chemicals, fertilisers, plastics and other related
petrochemicals according to the Gas Policy (2013) and the Local Content
Policy (2015).

The growing national economy catalysed by huge gas discoveries is on the


other hand unveiling challenges that were not thought before. For example,
the entire natural gas production chain (from discovery through production,
processing, transportation to utilization of the gas) involves heavy
engineering and large-scale investments, complex projects, and risky
technologies and activities which will are associated with increased and
varied health, safety and environmental challenges. In addition the long
transport routes and high depths involved in reaching the resources expose
the facilities to high health, safety and environmental risks, hazards and other
challenges that require measures be considered for ensuring that handling
facilities are properly and adequately designed and managed to ensure that
benefits are accrued without causing undue accidents and other major harms
to the public, workers involved, facilities and, or the built and natural
environments.
Due to the fact that as economic activities of a country grow and expand,
health, safety and environmental (HSE) challenges, increase as well, there

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Utilization of Natural Gas

will be a need to monitor and control the activities in the gas sector in order
to mitigate life, economic and, or related loses previously reported by the oil
and gas industry.
HSE principles, liabilities and mandate in the oil and gas industry in
Tanzania, is provided for in sections (VI) and (VII) of the Petroleum Act, No.
21, 2015) the Environmental Management Act (EMA), 2005 and the
Occupation Safety and Health Act (OSHA), 2003 which complement each
other and with the Standards Act (SA) No. 2, 2009. Petroleum Upstream
Regulatory Authority (PURA) and Water and Utilities Regulatory Authority
(EWURA) have respectively been vested with regulatory mandates for the
upstream, midstream and downstream oil and gas sector activities in Tanzania
respectively and the Oil and Gas Advisory Bureau (OGAB) is supportive and
advisory organ while the respective ministries deal with strategic and policy
issues. Within this complex multi-sectorial relationship that has been defined
only very recently, it is necessary and important for stakeholders (internal and
external) to be aware so as to enhance efficiency and effectiveness of their
participation in HSE issues during development, growth and consolidation of
the oil and gas industry
Best practices to address HSE concerns in the oil and gas industry involve
partnership between public regulators and industry, engagement of
labor/stakeholders, support role for research and belief that mutual trust will
prevail and continuously be improved.

This paper focusses on natural gas production chain with regard to


application of high skills, knowledge and complex and high technology while
avoiding and, or minimize negative health, safety and environmental
consequences.

The paper ends with some conclusions and recommendations worth


consideration including the need support Government commitment by
providing necessary equipment and human-power with relevant experience as
well as providing necessary training at various levels. In this regard it is
recommended.to review the EMA, OSHA and Fires Acts to accommodate
current and emerging HSE issues pertaining to the oil and gas industry. It is
also recommended to introduce safety courses in oil and gas at various levels
in relevant education and training institutions.
Keywords: Health, safety and environment, awareness, lost time incident
(LTI)

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SESSION B3: The World Energy Outlook and the


Future of Natural Gas in the Energy Mix 


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Keynote Presentation 6: Tanzania Petroleum Contracts and


Agreements in Broader Context

Sufian Hemed Bukurura

Law Reform Commission of Tanzania.


E-mail: shbukurura@gmail.com

Abstract

Tanzania has consciously chosen, from a range of options, Production


Sharing Agreements (PSAs) as its preferred fiscal arrangement for oil and
gas. Very little, though, is known among sections of practitioners and the
general public as to what really production sharing agreements are, how they
came about, what they contain and how they enable the United Republic of
Tanzania, and other resource owners, to benefit from oil and gas investments.

The paper seeks to outline briefly different generations of PSAs around the
world to demonstrate the context in which the Tanzanian Model Production
Sharing Agreement (MPSA) 2014 should be located. It will also examine the
general thrust of other oil and gas agreements. In addition, an explanation, in
general terms, of what the MPSA 2014 contains will be shown. To achieve
this the following categories of MPSA provisions will be highlighted:
namely, financial and taxation arrangements, cost recovery formulae, profit
sharing mechanism, national equity through the participation of the national
oil company and dispute resolution arrangements. Furthermore, social issues
of health, safety, security and environment (HSSE) will be highlighted as
well as the role of TPDC, the national oil company, in the oil and gas value
chain. A comparative review of other petroleum contracts and agreements
will be conducted. From this analysis a conclusion drawn is that there are
multiple contracts and agreements involved in the petroleum sector and
MPSA 2014 is only a part of broader arrangements in the exploration,
development, transportation and commercialization of petroleum resources in
general.

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The World Energy Outlook

Paper 21: The Effect of Gas to Liquid Fuel on GDP: A Case


of Mozambique

Ismael Valigy

Rua de Kassuende Nr 50, 7 left. Polana,


Maputo - MOZAMBIQUE
E-mail: Ismael.fmp@gmail.com

Abstract
Natural gas (NG) has turned into a vitality energy source around the globe
and Gas to Liquid (GTL) is a refinery process or system that changes NG to
liquid fuels which represents one among three alternatives to monetize it.
With the huge proved reserved of NG in Mozambique, the study aims to
identify the effect on local economy when the country substitutes imported
refined fuel derived from crude oil to local GTL. The production cost of GTL
fuels per barrel of oil equivalent (BOE) was proven less than traditional
refined fuels. Local petroleum law stated, 25% of hydrocarbons explored in
the country will be used in the domestic economy. The results of data
analysis of fuels consumption shows in regression analysis that the amount
spent to import fuels is 15.11% of GDP. Distillate fuel (diesel) represents
67%, gasoline 18% and jet fuel 9%. Was proved and concluded that local
projected GTL fuels production plant with 96.000 of BOE/day and the quote
for using in Mozambique exceed in 167.5% under actual economic factors,
that means an extra of 3.53 million BOE/year for export or reserve. Due to
country policies implications and GTL plant is unfixed also the
recently volatility in crude oil prices, further study may need for better
perception on domestic economy implications of Mozambique.

Keyword: Mozambique GTL, Mozambique Gas to Liquid Fuel, Natural Gas


Mozambique

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Paper 22: Making Hydrocarbon Extraction Work for


Tanzania: What Role can Community Engagement
Play?

Japhace Poncian and Jim Jose*


Newcastle Business School, Faculty of Business & Law, University of
Newcastle, Australia
E-mail: jponcian@muce.ac.tz/Japhace.Poncian@uon.edu.au
* jim.jose@newcastle.edu.au

Abstract
Recent discoveries of natural gas in Tanzania have not only put Tanzania on
the global map of hydrocarbon resource rich countries but it has also
generated some optimism and great hopes of using them for the countrys
socio-economic transformation. While exploration is ongoing and no
companies have yet announced investment decisions, the government has
anticipated future activities by putting in place institutional, policy and legal
frameworks to ensure that there is a stable basis for the development of the
subsector. This has included changes to strengthen the Tanzania Petroleum
Development Corporation (TPDC), a government company overseeing the
development of the oil and gas sector. Several other key policies have been
put in place such as a national Natural Gas Policy, the Tanzania Extractive
Industry (Transparency and Accountability) Act, 2015, the Oil and Gas
Revenue Management Act, 2015, and the Petroleum Act, 2015. In addition,
the natural gas transmission pipeline from Mtwara through Lindi to Dar es
Salaam has been completed. Considerable effort has been made to attract
investors in a number of areas such as cement factories, transport,
construction, and so on.
While these measures are well-intentioned and likely to ensure a vibrant level
of industrial development, it is not clear whether they will be sufficient to
enable Tanzania to avoid the fate that has befallen some other resource rich
African countries, namely the resource curse. Hence it is imperative that
Tanzania finds a way to prevent potential adverse effects from becoming
realities that eventually turn into a resource curse. One key way to achieve
this is through meaningful and active community engagement in resource
governance. In many past instances of the development of energy resources
elsewhere in Africa, especially where oil and natural gas is concerned,
community participation was not very high on the development agenda. To

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some extent the Tanzanian government has recognised the importance of


community engagement/participation as witnessed in its recent legislative
measures. Incorporation of some level of community
engagement/participation ensures that such participation is at least part of the
discussions in the future.
Yet more needs to be done to explore the role of community participation and
how it might contribute to enabling Tanzania to benefit positively from its
natural endowments. In particular, we need to understand what role
community participation can actually play in the implementation of the
natural gas policies. What is the governments vision for community
participation/engagement? How does it see community participation
contributing to both the governance of the sector as well as to the
management of local issues affected by resource activities? How can
communities work with corporations to ensure the best outcomes for all
concerned? What opportunities might need to be created to ensure that
community engagement can make a positive contribution on natural gas
governance?
This paper seeks to address these questions in the context of the state-of-the-
art debates in the literature on resource governance and community
engagement. It situates this discussion in the context of an emerging gas
sector that presents a number of governance opportunities and challenges for
the Tanzanian government and the local communities directly affected by
these developments. Hence the paper also considers how best to ensure that
local communities are able to have a meaningful role.

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Paper 23: Natural Gas Vehicles: A Review of Best Practices


around the World and Challenges Facing Tanzania
Dr. Hassan M Rajabu,

Department of Mechanical and Industrial Engineering. University of


Dar es Salaam. P.O. Box.35131, Dar es Salaam. Tanzania,
hmrajabu@gmail.com

Abstract

Adoption of natural gas technologies in Tanzania have been promoted in


recent years in the sectors of power generation, industries, institution and
residential heating and cooking, and in transportation. The Government main
motives for promoting the use of natural gas are to lessen foreign oil imports,
to reduce fuel costs, deforestation, local air pollution, and greenhouse gas
emissions. By the end of 2015, electricity generation using natural gas
accounted for at least 35% of the total installed electricity generation capacity
(MW) in Tanzania, and about 40 industries, 3 institutions, and 70 residential
households in Dar es Salaam are using natural gas for thermal applications. In
the transportation sector, only 52 vehicles have been converted to use natural
gas since the inception of the pilot NGV project in 2009. For consumers in all
these sectors the primary incentive to switch to natural gas is the potential
savings in fuel costs.
The successes in the increase of using natural gas in the power sector is
mainly attributed to the drop in hydro-electric power generation , locally
availability of this clean and relatively cheap fuel and the country rapid
growth in electricity demand which is estimated at 10%. Furthermore, proven
natural gas technologies in power generation and process heat applications in
industries eliminate technological barriers in these two sectors which are both
big consumers of gas and are commercial-based.
Despite the favorable attributes, Natural Gas Vehicles (NGV) growth in
Tanzania has been very slow. Unlike power generation and industrial sectors,
adoption of natural gas in the transportation sector provides many challenges.
Among the challenges include: High initial cost of vehicle conversion, high
cost of Original Equipment Manufacturer (OEM) of NGV vehicles, high
infrastructure cost for gas supply network, high cost of refueling stations,
limited refueling stations, and lack of awareness to consumers on the safety

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aspects of NGVs and economic and environment benefits of NGVs.


Furthermore, the legal framework and codes and regulations to govern a safe
NGV program have not been fully established by the Government.
A review of best practices around the world reveals that countries with
natural gas resource use several policy instruments including tax exemptions
and mandates to increase the market penetration of natural gas technologies
including NGVs in order to attract private entities to invest in refueling
infrastructure. The most effective policies are those which provide a direct
financial benefit to the end users but still ensure widespread use of natural
gas, and policies that provide long-term certainty for vehicle owners, NGV
equipment manufacturers and investors in infrastructure. Example of policy
instruments that have been used in countries with successful NGV programs
and which can be applicable to Tanzania include: mandates to certain fleets
such as taxis to use NGVs; favourable tax for natural gas, NGVs and
refueling infrastructure; funding assistance; technology transfer; and
preferential benefits to NGVs such as reduced road license fees and
exempting parking charges in the city.
It is recommended that the Government should take initiatives to increase the
market of NGVs this includes part of the government fleet to use NGVs in
order to increase the visibility of NGVs in the roads. Furthermore, the
government should impose mandates to certain private fleets in the city and
create incentives to NGVs; formulate legal frameworks and establish codes of
practice for inspection of vehicles, NGV conversion facilities, refueling
stations and qualifications of personnel working in the conversion and
inspection of NGVs. Lastly, the government should take more initiatives to
create PPPs in downstream projects such as vehicle conversion, gas
distribution networks, and refueling stations. The government has to also
maintain attractive natural gas price to attract more NGVs in fleet operators
and individuals.

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Paper 24: Metrology Infrastructures in The Development of


Oil and Gas Industry in Tanzania: Perspective
From The Current Natural Gas Reserves in
Tanzania

Ishigita Lucas Shunashu

College of Business Education (CBE) Dar es Salaam, Department of


Legal and Industrial Metrology

Abstract
This paper describes the proposed metrology infrastructures in suppoting the
implementation of natural gas policy and the national governments
economic plan to achieve competitiveness in the national and international
LNG markets. Tanzania need to undertake improved metrology
infastructures so that to establish complete confidence in LNG measurement,
to ensures the integrity in the calculation of royalty and other taxes to be paid
by concessionaires to the government, fare trade and consumer protection.
The measurement of LNG for trading purpose is regulated and heavily
influenced by the directives, standards and guidance of the legal metrology
community, ISO, and the industrial association GIIGNL (International Group
of Liquefied Gas Importers). Upon this background, it is imperative to have
assessment tool to gauge the need of metrology infrastructures in
development of energy sector in Tanzania.

Consistant and reliable measurement of natural gas is the key issue for
ecomomic development, consumer protection and fair trade. In its turn,
reliable measurement depend upon a national metrology system organized in
such a way that it can provide national measurement standards and
international equivalence of measured values is essential to the desired
reliability.The transfer of LNG from buyer to seller (custody transfer)
involves significant financial risk due to lack of accurate information on
measurement uncertainties in the transferred energy. This translates to
financial risk for both the buyer and seller. For example, clear view on the
total measurement uncertainty for the delivered energy of LNG has been
lacking with estimates ranging between 0.5 - 1.0% and even higher (JPR
Report 2013, V1). This called for efforts to improve national metrology
infrastructure in natural gas sector.

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The study aims to elicit the immense roles of metrology infrastructures in


midstream and downstream natural gas measurement. The specific objectives
addressed include, (i) national metrology regulation framework and policy,
(ii) to integrate metrology infrastructure and legislations in natural gas sector,
(iii) to ascertain relevance and roles of metrology actor in energy sector, (iv)
to develop traceability framework of LNG flow meter as per international
recommendations to insure accuracy of meters, (v) improving testing and
LNG quantity measuring systems and LNG composition measuring system
for both exported and domestically consumed energy and (vi) developed
guideline, standards and legal metrology
The study focuses on metrology for utilities and takes the natural gas sector
as premier example, where number of method employed to develop this
study. This involves, explicitly literature review of metrology international
recommendations, documents, guides, bulletin and publications in LNG and
CNG measurement, as provided by OIML, ISO, BIPM and SADMET.
However, the study employs metrology journals review and explorative
research.
The current paper presents the result in abstract, for objective (i), (ii) and (iii).
The study defines national metrology infrastructure and it roles in fare trade
and economic development (OIML D1, 2012 p.8, 18). It also analyses the
Tanzanians metrology policy, National Metrology Institutes (NMIs) that
maintain and develop the national standards of measurement, the calibration
laboratories that maintain the traceability path, the pattern approval testing
laboratories, the measurement legislation and the enforcement of these
measurement regulations, the scientific and technical committee that develop
measurement standards and recommendation. Therefore, it proposes national
metrology infrastructure framework in energy sector.
Integration of metrology infrastructure and legislations in natural gas sector
being an objective, the study analyses the role of both legal metrology and
industrial metrology. For example, legal-metrology in gas sector generally
encompasses the practices and process of applying regulatory structure and
enforcement to regulate units of measurement, measuring instrument or
systems and methods of measurement, these activities being performed by or
on behalf of government authorities, (gas-meters specifications and technical
requirements must be international regulated, see OIML R-137 and OIML R-
140). Also industrial-metrology helps to enable the companies to accurately
determine the values of gas transported between different entities at custody
transfer points and thus leads to a fair competition in a sector. It is self-
interest of these companies being able to measure accurate as possible so that
there usually no regulatory requirement.

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Moreover, this study suggests the involvement of the national metrology


actors and institutes (in place of NMIs) to ensure proper frameworks and
executions of metrology control that guarantee fare trade, technological
innovation and economic development in energy industry. National
Metrology Institutes (NMIs) in Tanzania includes Weights and Measures
Agency (WMA), and Tanzania Bureau of Standard (TBS), which both
holistically offer the following (i) provision of primary standards in all the
area incorporated (gas flow, pressure, temperature and calorific content) to
ensure traceability, (ii) ability to execute type approvals e.g. for natural gas
dispenser, (iii) Provide services such as initial and periodic verification of
dispensers (iv) calibration of metering equipment (v) verification of
compliance to standards or norms e.g. ISO 5167 for Orifice Plate. Some
improvements on NMIs framework are proposed in this paper as per OIML,
BIPM and ILAC recommendations (OIML D1, 2012.p.24).
In conclusion, metrology infrastructures are adopted by many countries as a
significant aspect for the development of oil and gas industry which is hand
to hand with improved international trade. The impact of metrology in the
natural gas sector is internationally experience, and its benefit includes
consumer protection, effective stock control, full collection of government
excise and taxes based on measurement, full national benefit for LPG/CNG
and support fare trade (see the Birch Report 2003). However, it requires
integration of metrology actors and metrology legislations in Gas sector as
well improving national metrology policy, doing this would enhance
development of oil and gas industry.

Keywords: Metrology Infrastructure, Natural gas and Policy

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Paper 25: Compressed Natural Gas for Dar es Salaam City


Transport
R. Rwechungura1 and G.D Mrema2
1
Norwegian University of Science and Technology-NTNU,
richard.rwechungura@ntnu.no
2
Tumaini University, Dar es Salaam College-TUDARCo,
gdmrema@yahoo.com

Abstract
The benefits of using compressed natural gas (CNG) as the fuel for city buses
and taxis are presented. The amount of petrol and diesel currently used and
the CNG required to replace the traditional fuels have been determined and
the reduction on the emissions after conversion to CNG established. A
forecasted amount of natural gas demand for the next 50 years have been
established and compared with available proven reserves. Also, adoption of
CNG would save the foreign currency used to import petrol and diesel as
natural gas is available locally.
It was found that the use of petrol and diesel produces approximately Mt 2.0
CO2e (Million tons of Carbon dioxide equivalents) per year; and that if all
Dar es Salaam city buses were converted into CNG the reduction in these
emissions would be approx. Mt 1.0 CO2e per year. It was also found that if all
Dar es Salaam city buses including the new rapid buses were converted into
CNG the reduction in these emissions would be 60% of CO, 40% of CO2,
35% of NOx, 93.5 % of PMs and up to 100% of SO2. The country will save
millions of dollars on foreign exchange. Compressed Natural Gas Vehicle
(CNGV) technology is advantageous and suitable for use in Tanzania
especially for big cities like Dar es Salaam.
Established under the Kyoto Protocol, the Clean Development Mechanism
(CDM) scheme is an incentive for companies in industrialized countries to
invest in eligible emissions reduction projects in developing countries. The
Clean Development Mechanism (CDM) allows a company in industrialized
country to reduce greenhouse gas emissions in a cost-efficient manner. Its
active contribution to sustainable development is awarded with emission
credits that can fulfil its own commitments or be traded on the Greenhouse
Gas (GHG) market and therefore CNG can also be considered as an option.

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The study therefore concludes that Tanzania have enough natural gas to
engage in CNG for Dar es Salaam city transport considering proven reserves
and current exploration activities. For a country like Tanzania CNG stands to
be the best option economically and environmentally, with reduction in
production of the harmful exhaust emissions.

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Paper 26: Incidence of Medical Conditions Associated With


Up/Down Stream Oil and Gas Explorations In
Tanzania; A Guide Towards Appropriate Onsite
Medical Support Setup

Dr. Chakou Halfani (MD, MMed, MBA)

Tindwa Medical and Health Services

Abstract
Tanzania is blessed to have abundant gas resources discovered in several
places including Lindi, Mtwara and Coastal Regions. Due to hard to reach
proximity of discovery areas and the need of high technology as well as
expertizes, gas operations is associated with gathering experts from different
parts of the world in remote areas with limited access of quality healthcare
system. This necessitates the need of dedicated medical facilities to cater for
workers in these isolated operations. The purpose of this study is to describe
injuries and illnesses occurring in these operations so as to enable oil and gas
companies cost-effectively prepare customized medical facilities.

Retrospective descriptive study using TMHS medical records system. Data


were retrieved from records and collected by well-structured questionnaires.
Total of 791 medical incidences were reported in 8 onsite clinics associated
with oil and gas operations executed by TMHS. Data entry and analysis were
done using SPSS 16.0.

The medical incidences were as follows 16.8% had GIT infections,


Respiratory 8.75%, ENT 9.4%, Eye 3.2%, UTI 2.2%, Allergy 3.8%, Malaria
5.6%, Trauma 17.8% and Skin 12.1%. Only 4 patients (0.5%) required
medical evacuations to advanced facilities in Dar es Salaam, 75% of them
were due to trauma. None of cases required overseas evacuation.

The medical illness incidences data is relatively similar with general


populations with exception of increased trauma incidence in oil and gas
operations. The data shows 99.5% cases stabilized at site, which emphasize
the need of comprehensive onsite clinic setup contrary to most companies
that focus mainly on emergence evacuations setup leaving behind onsite
outpatient medical care. Oil and Gas companies shall invest more on onsite
outpatient care as distribution found in this study.

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Exhibition Layout

SESSION B4: LAYOUT OF EXHIBITION BOOTHS

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