Total Seeks Tanzania Downstream Business Exit After 50 years?

France oil giant Total has shown signs of exit from East Africa’s second largest economy with a recent with its latest advertisement that it indicates the company is selling its properties in the country.

Total Tanzania in the advertisement has requested for suitable bids for purchase of its plots, depots and service stations in the various regions in the country. According to the President of Total Africa Marketing and Services, Mr. Stanislas Mittleman in last year’s 50 years celebrations said the company has contributed to industrialization development in Tanzania by investing more than Two Hundred Million USD in the last three years through acquisition of GAPCO Tanzania Limited. The acquisition increased Total’s network to 100 service stations and launched a blending plant to serve customers in the country and East Africa region at large.

In July this year Tanzania arrested oil executives including Total Tanzania’s Managing Director Jean-Francois Schoepp for questioning and taken into custody while attending a consultative meeting between oil marketers and the Energy and Water Regulatory Authority (Ewura) in Dar es Salaam.

The African Energy Chamber then called for a quick resolution to the disagreement between oil marketers and the Tanzanian government.

“The African Energy Chamber is calling for the respect of the rule of law, and asking that they be afforded all due processes as required by Tanzanian law. Given how critical these times are the ongoing economic crisis across the continent because of the Covid-19 pandemic, the Chamber is hoping for a quick and amicable resolution to such disagreements that are detrimental to Tanzanian citizens,” it said in a statement.

Earlier today the President of the energy chamber termed the turn of events as “sad” saying this would likely lead to job losses.

It is unclear what this divorce between the French oil giant and Tanzania holds for the East Africa crude oil pipeline with Total the main proponent in rerouting the pipeline away from Kenya which has also discovered oil in the South lokichar basin. Since then the French giant has invested a 25% stake in the Kenyan oil blocks which has surely increased the company’s interest. It is also very likely Total could take operatorship of the Kenyan blocks with the current operator Tullow Oil having indicated it was looking to offload part or its entire stake in Kenya.

This is however not the first fallout between energy companies with Tanzania since the rule of President John Pombe Maghufuli. Investors have delayed the countries LNG projects despite vast amount of gas having been discovered (more than 57 trillion cubic feet) in what pundits have termed as a watch and see attitude. Statoil now Equinor, Exxon Mobil, Royal Dutch Shell  and Ophir Energy have continued to delay its final investment decision  on Tanzania’s $30 billion onshore liquefied natural gas (LNG) export terminal as negotiations with the government continue to move at a snail pace. In the neighbouring Mozambique the projects further south investors have already reached FID  and have had billions of dollars committed by various financiers in support.