Spillover effects on upstream oil and gas supply chain: a case of selected local suppliers in Tanzania.

Upstream oil and gas investment activities can have impact on local suppliers’ business. The study analysed the impact that comes as a spillover of upstream investment activities made by International Oil Companies (IOC’s) on local businesses involved in the supply of goods and services to the companies. This was a qualitative study that employed interviews conducted to twelve (12) different local suppliers, business owners and managers. Collected data was processed and analysed using interpretative analysis approach with the help of Atlas ti software to generate useful findings for the study. The study found out that the awareness of IOC’s procurement demands, the local capacity to meet IOC’s supplying demands and the linkage mechanism between IOC’s demands and local suppliers are the important factors influencing local suppliers’ involvement in the sector. Similarly, quality control practices, inventory management and marketing practices were expressed as business practices that have been influenced by supply activities to IOC’s. Eventually, the expansion of customer data base, cash flow improvement, business profile enhancement, internationalization process, new technology adoption and business multi-cultural experience are the benefits that local suppliers have apparently obtained from their involvement with IOC’s. The study recommends that there should be established collective efforts among the government through PURA, IOC’s and local suppliers for effective engagement to tap positive impact from IOC’s investment activities.