Tanzania’s oil and gas industry might see the country reap US$ 20m in insurance premiums in the next few years, but this will only happen if the industries apply the right policy and law.
The Commissioner of Insurance Mr. Israel Kamuzora revealed the reports and said Tanzania can learn a lot from oil and gas producing countries like Nigeria, which have clauses and provisions expressly directing insurance services to be provided locally. He pointed out that 30 insurance firms operating in Nigeria in 2010 cooperatively underwrote over US$ 200m premiums from companies involved in oil and gas activities.
It is evident so far that East Africa has become one of the world’s most desired oil and gas regions after a string of huge discoveries attracted foreign companies seeking new gas sources. Tanzania estimates it has about 48 trillion cubic feet (tcf) gas following big finds off the country’s southern coast.
From the records, Tanzania has been involved in agreements with major companies like BG Group, Ophir Energy, Exxon Mobil and Statoil. Among other things, the private sector demands that the policy should ensure that the domestic market is given first priority over the export market in gas supply and that local interests must be taken aboard.
The oil industry is an important sector for Tanzania’s economy, attracting an average 55% of the country’s foreign exchange earnings. Government policies are directed at petroleum product substitution by exploiting indigenous resources. Extensive gas fields have been identified off the coast at Songo Songo and Mnazi Bay.
