Risk Management in Upstream Oil and Gas Businesses in Tanzania

Abstract

This study gives an account of major risks faced by Tanzania's upstream oil and gas businesses and how they are managed. The study employs the agency and risk management theories coupled with a triangulation data collection. The data was collected from eight businesses using questionnaires, complemented by interviews and was analyzed using descriptive and content analyses. The study observed regulatory changes, fluctuation in global oil prices, government bureaucracy, corruption and government interference as high risks facing upstream oil and gas businesses. Expert consultation, experience, workshops, stakeholder analysis and brainstorming are the most used risk identification techniques. To manage these risks, businesses familiarise themselves with government guidelines, invest to understand government bureaucracy and cut down some operations. For efficient risk management, the study recommends that oil and gas businesses use techniques that are more relevant to the local environment. The results support the agency and risk management theories.