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| Fifteen years after discovering commercially-viable crude oil deposits, Uganda begins its final journey to production. |
The deal, which is expected to unlock upwards of $15 billion in investments, was signed in Kampala. President Yoweri Museveni led the Uganda delegation while Total chairman and chief executive Patrick Pouyanne led the French company’s team, The EastAfrican has learnt.
A key element of the project is the crude oil export pipeline to run from Uganda to the Indian Ocean at Tanga and Tanzania President Samia Suluhu travelled to Kampala in her first foreign trip as head of state to sign the tripartite agreement on behalf of her country.
Signing of the deal was earlier scheduled for March 22 in Kampala but was postponed following the death of Tanzania's President John Pombe Magufuli, who was a key driving force behind the pipeline.
A deal for the $3.5 billion East African Crude Oil Pipeline (Eacop) is a strategic win for Tanzania which will earn $12.7 off each barrel of oil transported through it.
Longest heated pipeline
At peak production, the 1,445-kilometre heated pipeline which starts in Hoima in the Albertine Graben, western Uganda, and ends at Tanga Port in Tanzania, will transport 216,000 barrels of crude oil per day. Due to the waxy nature of Uganda’s oil, it will be one of the longest heated crude oil export pipelines in the world.
“Because of the pipeline, on each barrel, Uganda will lose $12.7 because of paying for the pipeline. But why don’t we concentrate on the refinery, supply Uganda and the interior part of East Africa,” President Museveni said in a TV interview in Kampala last year.
The long-awaited agreement allows Uganda to move ahead with a project that has been plagued by delays for more than a decade since the confirmation of commercial deposits.
The country’s oil deposits are estimated to have reduced in value from $61 billion in 2013 to $18 billion in 2018 due to a fall of crude oil prices on the world market, according to the Climate Policy Initiative, a UK-based research firm.
At peak production, the 1,445-kilometre heated pipeline which starts in Hoima in the Albertine Graben, western Uganda, and ends at Tanga Port in Tanzania, will transport 216,000 barrels of crude oil per day. Due to the waxy nature of Uganda’s oil, it will be one of the longest heated crude oil export pipelines in the world.
“Because of the pipeline, on each barrel, Uganda will lose $12.7 because of paying for the pipeline. But why don’t we concentrate on the refinery, supply Uganda and the interior part of East Africa,” President Museveni said in a TV interview in Kampala last year.
The long-awaited agreement allows Uganda to move ahead with a project that has been plagued by delays for more than a decade since the confirmation of commercial deposits.
The country’s oil deposits are estimated to have reduced in value from $61 billion in 2013 to $18 billion in 2018 due to a fall of crude oil prices on the world market, according to the Climate Policy Initiative, a UK-based research firm.
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