The Business Year

Nick McAleer

TANZANIA - Energy & Mining

Energy Matters

Country Director, Oryx Energies

Bio

Nick McAleer was appointed Country Director for Tanzania in 2014. In 2006, he moved to Oryx Energies as Managing Director Oryx Oil Company Limited. He earlier held numerous roles in BP in retail marketing in the UK, the US, and Africa. McAleer joined the downstream oil industry with Mobil Oil UK after graduating from King’s College London in 1989.

TBY talks to Nick McAleer, Country Director of Oryx Energies, on the company's investments in the sector, the industry's regulations, and his outlook on the sector's development.

What strategies do you use to sustain the company’s development?

Oryx Energies has been investing in Tanzania since 1999, providing oil products and services. We have dramatically increased our level of investment in the country over the past three years, and have made investments of over TZS100 billion in our different product and service areas: fuels, LPG, and lubricants. The introduction of franchised Oryx Energies stores, which sell LPG or lubricants, are part of our contribution to reducing counterfeit and illegal products and practices, by creating outlets where customers can be assured that they are buying genuine products. Together, these investments aim to ensure a reliable supply of quality products to consumers across the country, in both urban and rural areas. We see massive potential in Tanzania for fuel and lubricants as the economy grows, as well as using Dar es Salaam as a transit hub to supply neighbouring countries. LPG is a key focus area and Oryx Energies has been promoting LPG as a clean, safe, efficient, and ecological energy alternative to charcoal and firewood in Sub-Saharan Africa for over 15 years. At the end of 2016, we will complete the largest single LPG storage sphere in Tanzania. In 2016, we also built the first LPG cylinder revalidation plant in Tanzania.

How do you view the role played by the government in regulating the industry?

When greater control equates greater efficiency, it is possible to reduce prices, improve standards, and reduce examples of poor business practices in the interests of consumers. The government in Tanzania has had some success in all these areas. In 2006, it set up the Energy Water Utilities Regulatory Authority (EWURA); one of its roles is to regulate the petroleum industry in terms of setting industry standards, rules, and regulations, and developing a level playing field for all oil-marketing companies. At the end of 2011, EWURA took the important step of introducing a Bulk Procurement System for fuel products. This resulted in a drop in import premiums, as well as a massive improvement in vessel waiting times. As a result, demurrage costs dropped dramatically, lowering fuel prices at the pump. One concrete result is that fuel pump prices in Tanzania are cheaper today than in neighbouring countries.

What is your outlook for the energy sector’s development and the role that Oryx Energies will play in it?

Tanzania will continue to see economic growth, and when we talk about growth, we are inevitably talking about the need for power and energy. As a result, we expect energy requirements in Tanzania to grow significantly over the coming years. The country is blessed with many mineral deposits and natural gas. It also has the desire to build industry and agriculture, and improve the lives and livelihoods of its population. The current government will develop more economical energy through Tanzania Electric Supply Company (TANESCO), as well as developing wind, solar, geothermal, and LNG sources. However, fossil fuels will remain important for a number of years to come in view of the continued growth in energy demand and the insufficient availability of alternatives.

What are your goals and expectations for Oryx Energies in 2017?

In 2017, we expect to leverage our latest cycle of investments, which position us particularly well to make fuels, LPG, and lubricants easily available to users all over the country. The quality and accessibility of products and services are essential to development, and we are capable of ensuring both. We also hope to benefit from the government’s commitment to create a fair business environment and to encourage private sector investment. In terms of LPG, we will contribute to efforts in reducing the use of firewood and charcoal, helping to stop de-forestation and reduce greenhouse gas emissions. Oryx Energies stands ready to serve the energy needs of new industries and the population at large. We will continue to invest in the future of Tanzania, creating jobs and promoting entrepreneurship along the way.

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