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Tanzania & Uganda Sign East Africa Oil Pipeline Deal

4 Min Read

Presidents Yoweri Museveni of Uganda and President Samia Suluhu Hassan of the United Republic of Tanzania have signed the East Africa Crude Oil Pipeline which both leaders described as third victory for the two countries.

Museveni said the two countries have in the past posted military and political victories and now with the oil pipeline deal it is an economic victory.

For President Samia Hassan, this was her first trip outside her country since taking oath as President of Tanzania following the demise of her predecessor John Pombe Magufuli.

At a ceremony broadcast on regional Television channels on Sunday, the French oil and gas exploration company Total E&P, China’s largest offshore oil and gas producer,Cnooc Ltd. and Uganda National Oil Co. were also participating partners.

With this agreement cemented, Uganda is scheduled to turn into a major crude oil producer and exporter.

Total also signed agreements with Uganda to develop this pipeline.

Total CEO Patrick Pouyanne called the signing of pacts a historic milestone for the production work and export pipeline that will draw more than $10 billion of investment.

“It’s a very large development, one of the largest that will be developed on this continent,” though just the beginning of a process that will see oil flow in early 2025, Pouyanne said.

Total’s own $5.1 billion bet on the project is for the rare frontier oil development that’s moving forward as most major companies are cutting spending. It also cements the French energy giant’s position as the leading player in Africa.

Total expects production to reach a plateau of 230,000 barrels per day. That’s higher than the output of Equatorial Guinea and Gabon, two of Africa’s OPEC members.

Under this agreement, the partners will develop the Tilenga and Kingfisher discoveries near Lake Albert, as well as a 1,443-kilometer (897-mile) heated pipeline to transport Uganda’s waxy crude for export at the port of Tanga in Tanzania. The French explorer holds 57% of the oil field licenses and a large stake in the pipeline project.

Last year, Uganda and Total signed a Host Government Agreement (HGA) with the Ugandan Government for the development of the East Africa Crude Oil Pipeline (EACOP) project. 

The HGA will govern the export pipeline in Uganda and will cost approximately $3.5 billion. Construction was expected to commence in 2021.

Total E&P intends to undergo constructive dialogue with communities and NGOs involved in all project activities.

Uganda’s head of State also said that apart from oil the same corridor can be used can take a return pipeline supplying Tanzanian and Mozambican gas to Uganda and the great lakes region.

The gas according to him will be used to smelt the huge reserves of Iron ore that they have in Uganda.

According to Museveni, this project should serve to awaken all Africans that prosperity & strategic security, are only possible if we use the Pan-Africanist approach that gives us a bigger market & rationalizes economic linkages.