Total, Tanzania sign final agreement to pave way for oil pipeline construction

Total, Tanzania sign final agreement to pave way for oil pipeline construction

By Norman Isaac Mwambazi

Ever since Uganda discovered oil more than a decade ago, the government of Uganda embarked on the process of looking for exploration partners that could extract this natural resource from the ground and make it make business sense to both the companies and the government on behalf of Ugandans.

During this process, the government had shortlisted and signed contracts with oil companies like French company Total and CNOOC from China, while it also fell out with others like Tullow Oil that ended up with both parties in court. This process looks like it was going to take forever and some Ugandans wondered whether they will ever enjoy the benefits of their oil, while others have already labelled it a curse.  

However, towards the end of last year, the government of Uganda started taking bold steps that would see oil production kickoff sooner than later, and this started by President Yoweri Museveni holding bilateral talks with then-President of Tanzania, the late Dr John Pombe Magufuli to chart ways of having the oil pipeline constructed from the oil wells in Hoim to Chongleani Terminal at Tanga port at the Indian Ocean.

Last month on April 11, Tanzanian President Samia Suluhu Hassan flew into the country and held talks bout the pipeline del with President Museveni and signed the agreements together with other companies involved like Total, CNOOC, and the Uganda National Oil Company.

Yesterday, President Museveni flew to Dar-es-Salaam aboard the Uganda Airlines to finalise and iron out the terms of the agreement, and as I write this, Ugandans should brace themselves for soon seeing their oil flow out of the ground.

At a ceremony witnessed by the two presidents Suluhu and Museveni in Dar-es-Salaam yesterday, the Tanzanian government signed the Host Government Agreement (HGA) for the proposed East African Crude Oil Pipeline (EACOP), effectively committing to and paving way for the next project development phase. The agreement establishes the legal and commercial framework for the proposed 1,443km oil pipeline.

EACOP company general manager Martin Tiffen and Total E&P Africa president for exploration and production Nicolas Terraz signed on behalf of the EACOP Company, and Tanzania’s energy minister, Dr Medard Kalemani, on the other side who sid that Tanzania is not only a host country but also an investor in Uganda’s oil.

The shareholders in the EACOP company are Uganda through the Uganda National Oil Company (Unoc), Total Holdings International B.V. with 62%, CNOOC with 8%, and the Tanzanian government with 15%.

The construction of the pipeline project will cost an estimated $3.55 billion (Shs13 trillion) and it is expected to start in Tanzania later this year. It is also understood that 80% of the pipeline will pass through Tanzania.

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