Finally Uganda Gov’t, Total Sign Agreement On Crude Oil Pipeline Construction

Finally Uganda Gov’t, Total Sign Agreement On Crude Oil Pipeline Construction

By Spy Uganda

Kampala: Uganda and France’s Total have reached an agreement that will bring the oil firm and its partners closer to starting construction of a crude pipeline to neighbouring Tanzania, the company’s local unit said.

READ ALSO: Total Buys Out Tullow’s Stake In Uganda’s Oil Sector

Uganda discovered crude oil reserves about 14 years ago but commercial production has been delayed partly because of a lack of infrastructure, such as an export pipeline.

The 1,445-km (900-mile) East African Crude Oil Pipeline, costing $3.5 billion, would pass through neighbouring Tanzania to the Indian Ocean port of Tanga.

READ ALSO: MPs Call For Increased Funding To National Oil Company UNOC

Total said it had reached an agreement with Uganda protecting its rights and obligations in the pipeline’s construction and operation – known as the host government agreement.

“We have today reached major milestones which pave the way to the Final Investment Decision in the coming months.  We now look forward to concluding a similar HGA with the Government of Tanzania and to completing the tendering process for all major engineering, procurement and construction contracts.” expressed

READ ALSO: Tullow Oil Axes Dfcu Boss Mugerwa, Replaces Him With Nampeera

“We now look forward to concluding a similar HGA (host government agreement) with the Government of Tanzania and to completing the tendering process for all major engineering, procurement and construction contracts.”

Total said a meeting between President Yoweri Museveni and its Chief Executive Officer Patrick Pouyanné also agreed to conditions allowing Uganda National Oil Company to join the project.

READ ALSO: ‘Uganda Aims For 1st Quarter Investment Decision On Oil Pipeline’- Minister Muloni

Total is the major shareholder in Uganda’s oil fields after agreeing in April to buy Tullow Oil’s entire stake in jointly-held onshore fields in Uganda for $575 million.

Tullow said this week it was confident of finalising the sale in fourth quarter of this year.

The other partner in the 230,000 barrel-per-day project is China’s CNOOC.

READ ALSO: ‘We’re Not Yet Interested In Uganda Oil Project’-Total Boss Breaks Camel’s Back!

The government said last year once pipeline construction begins, it would take 2-1/2 to three years to complete.

Uganda discovered crude oil reserves estimated at 6 billion barrels in the Albertine rift basin near the border with the Democratic Republic of Congo in 2006.

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