1. LPG: THE FORGOTTEN ENERGY
NOT AN OFFICIAL UNCTAD RECORD
Mr. Vaughan GIBSON
Managing Director, Oryx Oil Company Ltd, Tanzania
9th Africa Oil & Gas, Trade & Finance Conference
Maputo, 2nd June 2005

2. AOG AN EXAMPLE OF LOCAL INTEGRATION
PART I
AOG AN EXAMPLE OF LOCAL
INTEGRATION

3. OUR PROFILE (1) An integrated mining and petroleum company in
rapid growth
A solid African presence: > 15 countries
> 1000 persons and more than 30 nationalities
3 brand names: ORYX, ASCOT and ADDAX
Turnover: > USD 5 billions
4 strategic divisions

4. OUR PROFILE (2)

5. DOWNSTREAM FOCUS (1) A growing infrastructure for ORYX OIL & GAS
Senegal: 1 terminal
Ivory Coast: 1 export/bunkering jetty
2 LPG storage and filling plants
Sierra Leone: 1 terminal
Benin: 1 terminal
1 storage and filling plant
Tanzania: 2 terminals
3 inland depots
1 Lube blending plant
3 LPG storage and filling plants
Service stations Mauritania, Senegal, Ivory Coast,
network in: Nigeria and Tanzania

6. DOWNSTREAM FOCUS (2)

7. DOWNSTREAM FOCUS (3) A unique approach Betting on Africa
we move in when others move out
Betting on African
500 employees: only 2 non African expatriates
Local integration – Local partners
Moving down the value chain – Full service envelope
LPG: strategic emphasis / growth potential

8. LPG: THE ENERGY FOR AFRICA
PART II
LPG: THE ENERGY FOR AFRICA

9. THE BENEFIT OF LPG (1) What is LPG ?
A mixture of gaseous hydrocarbons, very rich in energy content, easy to store in liquid form at low pressure (contrary to natural gas)
It originates from the refining process of crude oil or comes as associated gas in natural gas or crude oil wells
Why is it so little known ?
Table 1: the weight of LPG in world energy consumption

10. THE BENEFIT OF LPG (2)
Table 2: Africa versus rest of the world

11. THE BENEFIT OF LPG (3) Main benefits environment friendly
portable and powerful
versatile

12. THE BENEFIT OF LPG (4) “Tailored” for Africa Desertification
Lack of infrastructure
Rural
Employment and growth

13. CONDITIONS FOR SUCCESS
PART III
CONDITIONS FOR SUCCESS

14. BARRIERS TO DEVELOPMENT (1)
The structural barriers:
Lack of supply and/or infrastructure
terminals and plants
Inadequate regulations
Cylinder property right
Cylinder exchanges and cross-filling practices
Lack of standards (cylinders, appliances and filling plants)

15. BARRIERS TO DEVELOPMENT (2)
Limited access to poorer classes
- cost of cylinder and appliances
- cost of gas itself
Inappropriate taxation
- import taxes
- indirect subsidies to “traditional fuels”
Lack of awareness
- from government authorities
- from the public in general

16. LIFTING THE BARRIERS (1)
Supply and infrastructure
role of private sector
support from international institutions
Regulations
developing adequate framework using experience from well established and structured market
opting for a cylinder deposit system
banning cross-filling
establishing a licensing system

17. LIFTING THE BARRIERS (2)
Access to poorer classes and implication of taxes
developing an efficient network
financing solutions such as micro-credit
eliminate taxation of LPG and cylinders (import duties and VAT)
harmonizing the tax system
(in case partial taxation is maintained)
Awareness
education campaigns (schools, associations, role of village heads)
- safety
- applications
advertising campaigns by marketers
government focus

18. ORYX’S APPROACH: MAKING IT WORK
PART IV
ORYX’S APPROACH: MAKING IT WORK

19. MAKING IT WORK (1) The case of ORYX BENIN:
3’200 m3 terminal and filling plant in 2001
 Regional role ( Burkina, Niger, Mali )
Creation of 700 sales point network
Lobbying for subsidies to put LPG prices in line with wood, charcoal and kerosene
Market grew from 1,000 mT to 9,000 mT in 2005
Giving access to low and middle classes
“minigaz” campaign
Credit sales through companies

20. MAKING IT WORK (2) The case of ORYX TANZANIA: 2’200 m3 import terminal
3 filling plants (Dar Es Salaam, Moshi and Mwanza)
lobbying campaign for new standards and elimination of taxes
“blending” into the culture: TV advertising

21. CONCLUSION L.P.G. = Long-term Progress Generator
Access to modern energy is a pre-requisite to economic and social development.
Africa with its increasing production of LPG and weak infrastructure has a solution within easy reach.
It is only by combining the efforts of all stakeholders (private sector, government bodies, international institutions and public in general) that we will be able to grasp this historic opportunity.
L.P.G. = Long-term Progress Generator