Local content policy bears fruits in natural gas value chain

10Nov 2016
Lusekelo Philemon
The Guardian
Local content policy bears fruits in natural gas value chain

A DECADE ago this sleepy, remote village was not on anyone’s radar, not even most of those living in Mtwara Region.

Of late, however, Madimba Village with a population of 3,500 has been put on the map, its popularity owing to findings of natural gas in the area which is significant to the country’s economy.

Located 60kms from Mtwara town, Madimba is among villages in Tanzania which have started benefiting from the local content policy (LCP) under the Tanzania Petroleum Act 2015, Section 219, which emphasizes on the need for residents where natural gas is discovered benefit from the discovery.

The village is now home to Maurel & Prom and the Tanzania Petroleum Development Corporation (TPDC)—the state-run company dealing with oil and gas exploration, development and production.

The two firms run gas processing plants in the area before it is transported 542km to the country’s commercial capital, Dar es Salaam, where it is used to generate power for domestic and industrial use.

Fatma Kwikunula is one of the few youth in Madimba village who have started benefiting from the natural gas produced in southern Tanzania.

She is employed by Suma JKT, the National Service economic wing, as a security guard at the Mnazi Bay Gas Field run by TPDC.

With her ordinary secondary education level, the young girl says gas has changed the lives of people in the area which is close to the Mozambique border.

Employed six months ago, she reveals that more than ten youth in the village have been employed by TPDC at the gas processing facilities, who are working in different non-technical areas including security.

She thanks TPDC for giving priority to locals like her when it comes to employment.
“I never thought of getting a job in this community where gender stereotyping is high. But with the discovery of gas, I got a job. I’m now supporting my parents and building my future,” she confidently says.

Mwajuma Abdallah is another ordinary villager who has high regards of the finding of gas. She says that they now get clean and fresh water supplied by gas companies but in the past they had to walk long distances in search of water.

“Back in the days we used to travel long distances looking for water. At some point we used to fetch water from streams in the forest which wasn’t safe but we had no choice,” she says, adding that the company has also been contributing towards education development in the area.

“They have been financing construction of classrooms,” she says in reference to TPDC and Mareal & Prom gas processing companies operating in the area.

Village chairman, Mohamed Madiza, is aware of the positive impact brought by the gas economy in the area, saying that there are a few people from the village who have been directly employed by gas companies.

“To us this means a great deal as we still believe that in the future the number of our children to be employed in the gas industry will increase,” he says.

He also notes that apart from electricity the village and neighboring villages are being supplied with clean and safe water.

“This is a huge opportunity in terms of social economic development because in the past we did not have reliable supply of water thus we were exposed to the risk of waterborne diseases,” the village leader says.

TPDC Plant Superintendent Manager, Kassim Mkombwa, admits that the villagers are supplied with about 6,000 liters of water per day.

Apart from Madimba, other villages which benefit from the water supplied by gas processors include Mitambo, Namindondi, Mayaya and Mngoji.

He says that because of the utilities supplied to villager instills a sense of ownership of the project in most of them because they directly benefit from it. Mnazi Bay Gas Field has the capacity of producing 210 million standard cubic feet of gas.

He encouraged Tanzanian youth to venture into studies related to oil and gas economy as the country is in need of more local experts in the field.

“As of now most of the experts are foreigners and that is why it is important for Tanzanian youth to see the need to seek knowledge in that area for their own benefit and that of the country at large,” says Mkombwa.

He also suggests the need for Tanzanians graduates to be practical oriented rather than theory-oriented so that they can be employed in the value chain of gas projects—upstream, midstream and downstream.

According to Raphael Mbena, Maurel & Prom Office Manager, many youths from nearby villages have been employed by the company and the plan is to ensure that people around the gas economy benefit out of the economy.

Mbena explained that though the oil and gas sector is new, the Tanzanian government has learnt from other countries to make sure that citizens get desirable benefits from the gas sector.

He attests that local communities have benefited immensely, especially in the area of health and education, by construction of classroom, clinics, maternity wards and other infrastructure.

“We’re trying to create a good rapport between us (the company) and villagers around to ensure maximum output and protection of national assets,” he says.

David Chajdronnier, a field engineer, said the company started production in 2006, adding with five wells (one offshore), it is able to more than 35 million cubic feet of gas daily.

In the 1980s more findings were made at Mnazi Bay in Mtwara Region, though its commercial production started a few years ago.

It is estimated that Tanzania has over 57 trillion cubic feet (tcf) of recoverable natural gas reserves off its southern coastline.