Local Content in Mid- and Downstream Petroleum Industry of Tanzania
Local Content is the development of local skills, oil and gas technology transfer, and use of local manpower and local manufacturing. In Tanzania, it is defined as the quantum of composite value added to, or created in the economy of Tanzania through deliberate utilization of Tanzanian human and material resources and services in the petroleum operations in order to stimulate the development of capabilities of Tanzanians and to encourage local investment and participation.
The Petroleum Act, 2015 explains on how the Government could participate in petroleum activities (Section 218 through 224), defines the Local Content, puts the obligation to promote Local Content under the Petroleum Upstream Regulatory Authority (PURA); the Energy and Water Utilities Regulatory Authority (EWURA) and Tanzania Petroleum Development Corporation (TPDC); puts the obligation on licensees to prepare and file the Local Content Plan to either PURA or EWURA.
The Petroleum (Local Content) Regulations, 2017 prescribes how the information on Common Qualification System (CQS) in the petroleum industry could be made available. For a more practical definition, one could say that Local Content is the philosophy of building a workforce that is skilled and building a competitive supplier base. It has become a very important issue due to the fact that in this day and age, every country would like its citizens to capture the commanding heights of its economy and thus assist to keep its wealth within its borders, as well as providing jobs to the ever increasing population.
Petroleum means any naturally occurring hydrocarbon, whether in gaseous, liquid, solid states or any naturally occurring mixture of hydrocarbons, but shall not include coal or any substance that may be extracted from coal or other rock. It is worth noting, however, that this process is not intended to replace the establishment and objectives of CQS in the petroleum industry as a requirement under Regulation 36 of the Petroleum (Local Content) Regulations, 2017. EWURA is currently working on the establishment of the CQS, the petroleum industry stakeholders shall be consulted when the draft CQS is ready for comments.
This is achieved through capacity building, creating Small and Medium-sized Enterprises (SMEs) and businesses which employ fewer than 250 persons as well as offering products and services locally. Pursuant to Regulation 38 of the Petroleum (Local Content) Regulations, 2017 EWURA is mandated to maintain a database containing details of local suppliers, service providers and other entities that meet the requirements of the petroleum industry of Tanzania.
Prequalification is a preliminary stage in a bidding process which determines whether an interested firm has the requisite qualifications for execution of a particular work or provision of goods or services. Unless otherwise justified, the database shall act as the sole medium for qualification to work or render goods and services in the oil and gas industry of Tanzania. The following are details to be worked on by the petroleum stakeholders-