The Government has expressed its interest in acquiring BP Tanzania Limited shares from its partner, BP Africa which has announced its decision to pull out of the deal.

The minister for Energy and Minerals, Mr William Ngeleja, told The Citizen exclusively yesterday that they were waiting for offer from their partner before making firm decision.

"We have been formally informed by our partner of his intention to shade of his 50 percent of the stake in the company," Mr Ngeleja told this paper.

The major oil marketing company that has operated in the country for about a century has decided to pull out of Tanzania and several other African countries for business reasons.

BP Africa's Chief Executive Sipho Maseko announced on Tuesday that decision to quit the Tanzanian market followed a strategy review that would see the company concentrate all its efforts in strategic countries such as Angola, Mozambique, South Africa, Algeria, Egypt and Libya. Except South Africa, the rest are oil and/or gas producing countries. BP has also ceased operations in Namibia, Malawi, Zambia and Botswana.

Except South Africa, the rest are oil and/or gas producing countries. BP has also ceased operations in Namibia, Malawi, Zambia and Botswana.

Mr Ngeleja said yesterday that buying the BP Africa stake would be one of Government options depending on the offer.

He also said that even if BP find another strategic investor, he (new investor) could not buy the shares without government approval.

"No new investor will come aboard without our (Government) approval. This is according to the partnership deal that we have sealed," he said.

But Mr Ngeleja said that the decision by BP Africa to sale part of its stake in the venture would not affect the activities of the company as speculated by some people.

"BP Africa has communicated with the government on their intention to sale its shares aim to sell its shares but this does not mean that the business will be closed down as it has been speculated," the Minister said.

He assured BP Tanzania limited customers of continued quality services from the company even as one of the partners is pulling out.

He said in their letter to Government BP officials have said the company has no capacity to meet the high demand in South Africa while serving in Tanzania and several other African countries.

"So they opted to sale their shares here and concentrate in a market when they think there is great potential for them to grow," said Mr Ngeleja.

And Mr Maseko appeared upbeat on the company activities and commitment despite the move.

"I would like to stress that BP is and will stay committed to Africa," he said in a statement released on Tuesday. "We have significant operations in Angola, Mozambique and South Africa and in Algeria, Egypt and Libya. We will continue to grow and invest in those markets, especially in the value chain infrastructure," he had added.

Mr Ngeleja's assurance notwithstanding, the decision is likely to affect Tanzania's petroleum marketing industry as the company has often played a significant and pioneering role.

But to what extent that effect will play itself out cannot be established at this moment. Until recently, BP Tanzania has had a 35 per cent market share in both the retail and service stations and about 70 per cent in aviation. In Zanzibar it has been controlling the aviation fuel market by about 100 per cent.

BP Tanzania is among some 40 oil marketing and trading companies in Tanzania with Addax, Mobil, Total, Oryx, Engen, GAPCO, GAPOIL and Oilcom Tanzania Limited being the market leaders.

In the seven southern African countries of Namibia, Botswana, Mozambique, South Africa, Tanzania, Malawi and Zambia, BP's downstream infrastructure includes some 29 depots and terminals, and more than 800 retail sites. Apart from fuel and lubricants, BP Tanzania has also been selling liquefied petroleum gas (LPG) for over forty years. It used to monopolise the market until the entry of Agip after the construction of a refinery, Tipper, in 1964.

To date BP and Agip Tanzania Limited (which has since been sold to ADDAX and operates as Oryx Tanzania Limited) are the leading players. BP Tanzania has also an organisation that deals in solar energy under a project that covers upcountry regions. BP has also had a large stake in the transit petroleum business through the port of Dar es Salaam to Uganda, Rwanda, Burundi, DRC Congo, Zambia and Malawi.

BP Tanzania traces its roots back in 1900 when Smith MacKenzie started importing kerosene to the island of Zanzibar as Shell agent A bulk tank and kerosene-can filling plant was established in 1901, and for a while Zanzibar supplied oil to much of the east coast of Africa and the Indian Ocean islands. Shell expanded to the Mainland and with the formation of the Consolidated Petroleum Corporation in the late 1920s, BP acquired an interest in the company.

In 1970 the Government of Tanzania bought a 50 per cent interest in what was then Shell and BP Tanzania Limited. In March 1982, BP bought out Shell's interests and the company became BP Tanzania Limited.