Opportunities for Local Entrepreneurs along the Oil and Gas Value Chain in Tanzania: A Local content analysis
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Date
2017-11-16
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University of Dar es Salaam Business School
Abstract
This paper explores the opportunities available for local entrepreneurs along the upstream oil and gas value chain in Tanzania. It focuses on the aspirations of value chain stakeholders in this industry regarding the participation of local entrepreneurs for enhancement of local content. The study used the qualitative approaches in order to capture the stakeholders’ experiences and opinions. Various purposive sampling techniques were used to select the participants. The study identified the International Oil Companies which are currently at exploration and appraisal stage. The snowballing sampling were used to get different stakeholders such as local suppliers, supporting organizations, and other local authorities which are interested with the oil and gas industry. The interviews were done in Dar Es Salaam, Mtwara and Arusha. Data analysis, such as coding, interpretation, and categorisation of data was done on the basis of the collected data. The experience of stakeholders shows that the opportunities available for local entrepreneurs includes supply of goods and services direct to the International Oil Companies. Suppliers who deals with the supply function includes various companies most of which resides in Dar es Salaam and Arusha, and supply their products to Mtwara. These are Tanzanian registered companies which are proactively seek for the information and bid the tenders. Another category includes suppliers who resides in Dar Es Salaam and Mtwara, they supply direct but without biding tenders. Most of the suppliers resides in Mtwara and they continue to provide their services to the residents and by doing so they supply to the oil and gas industry indirectly. Almost all the suppliers continues with their daily business routines, but the presence of the oil and gas activities enable them to increase sales and profits. However, the opinions of stakeholders shows that some of the suppliers, especially who resides in Mtwara get less benefit compared to Dar es Salaam and Arusha based organization. By these results, the study has found out that the opportunities available for the local entrepreneurs are influenced by the proactiveness of the entrepreneurs and the context which entrepreneurs resides. The group of entrepreneurs resides in Dar es Salaam believe in the it is their competitiveness that enable them to join in the oil and gas value chain, while most of the entrepreneurs resides in Mtwara believe in policy support. At the same time, The International Oil Companies believe in the quality of goods and services. Therefore, the study found out the opportunities available for the local people can be explained through the stakeholders’ perception of the local content.
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Keywords
Stakeholders perception, suppliers, upstream, value chain, trickle-down effect