New Progress in EA Crude Oil Pipeline Project.

ALL is now set for execution of the East African Crude Oil Pipeline (EACOP) project after France’s TotalEnergies and the China National Offshore Oil Corporation (CNOOC) announced signing of Final Investment Decision (FID) at a historic ceremony held at Kololo grounds in Kampala, Uganda on Tuesday.

The colourful event was witnessed by President Yoweri Museveni of Uganda and Tanzania’s Vice-President Dr Philip Mpango, who represented President Samia Suluhu Hassan. The FID is the stage in energy projects in which the firms operating the venture sanction its development.

Dr Mpango left Tanzania for Uganda on Tuesday for a one-day working visit to attend the ceremony, which was attended by various leaders and representatives of companies which are partners of the project.

The project will be constructed and operated through a pipeline company with shareholding from the Uganda National Oil Company (UNOC), the Tanzania Petroleum Development Corporation (TPDC), and the two oil companies, TotalEnergies and CNOOC.

TotalEnergies Chairman and Chief Executive Officer (CEO), Mr Patrick Pouyanne, said the two oil companies have committed to invest 10 billion US dollars for the Tilenga and Kingfisher oil wells in Uganda in addition to construction of the 1,443-kilometre-long pipeline.

After the announcement of the FID the stage has now been set for construction of the mega project, which will propel the East African region in the league of oil producing countries.

Tanzania is currently exploring oil in the central region, while the Democratic Republic of Congo (DRC) is said to have made some discoveries.

Speaking on behalf of President Samia, Dr Mpango said the announcement of the FID is a result of considerable efforts and relentless negotiations between Uganda and Tanzania, as well as the companies involved in the project.

The projected 3.5 billion US dollars in Foreign Direct Investment (FDI) will be realised between this year and 2025, which he said is an increase of 60 per cent compared to the current situation.

“There are also thousands of jobs that will be created for Tanzanians and Ugandans,” he elaborated.

For his part, President Museveni hailed TotalEnergies and CNOOC for finally making the announcement of implementing the project.

The Ugandan leader also allayed fears that the produced oil may not make it to the international markets, pointing to the fact that his government has conducted studies which showed that the product is marketable and has no chances of lacking market.

Apart from producing fuel, the extracted petroleum can also be used for other uses such as manufacturing of polyester, synthetic rubber among others.

Uganda has so far discovered over 6.5 billion barrels of oil and expects to export the same through Tanzania to international markets. The project will bring short and long-term economic benefits to both Ugandans and Tanzanians.

Tanzania is expected to earn an estimated 3.5 billion US dollars once the project becomes operational with more than 18,000 jobs set to be created over the next 25 years.

Speaking during a ceremony to sign initial agreements last year, President Samia called for quick completion of the negotiations for the remaining parts and the project to kick off as planned.

“Our people from both countries have heard enough, all needed now is implementation, let it begin as soon as possible,” President Samia pointed, adding that the project will also help to create employment for youths, semi-skilled and high qualified professionals.

At the same occasion, President Museveni of Uganda then said the pipeline project is an important infrastructure in the East African region since Burundi, Democratic Republic of Congo and South Sudan also have untapped oil reserve potentials.

Tanzania and Uganda had already signed the Memorandum of Understanding (MoU) in 2017, the Host Government Agreement, Shareholder Agreement (for the pipeline company) and the Tariff Agreement, signed in April 2021 in Uganda.

Tanzania is credited for implementing the Tanzania-Zambia (TAZAMA) oil pipeline and the Mtwara-Dar es Salaam natural gas pipeline, in which the President Samia believes, would be an added advantage in implementing the Hoima-Tanga crude oil pipeline.

Last year, the Director General of Tanzania Petroleum Development Corporation (TPDC) Dr James Mataragio said some 25bn/- has been allocated for compensation of land where the pipeline will pass.

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