Oil Pipeline: Tanzanian President Samia Suluhu Hassan in Uganda

Tanzanian President Samia Suluhu Hassan has jetted in Uganda for the signing ceremony of the proposed East African Crude Oil Pipeline (EACOP), making it her first state visit to Uganda in her capacity as Head of State since replacing the late John Pombe Magufuli.

Ms Suluhu Hassan, who was received at the airport by Foreign Affairs Minister Sam Kuteesa, is not the only high profile guest expected at the signing as Total SA’s chief executive, Patrick Pouyanne will be present as well.

The government of Uganda and international oil firms; French Total E&P and China’s CNOOC have today (Sunday 11th April, 2021) signed off four key agreements for commercialisation of the proposed East African Crude Oil Pipeline (EACOP).

The signing has brought to an end the years of negotiations and set on course Uganda’s oil project for the next phases of development and production.

Total SA is the parent company of Total E&P licensed to operate in Uganda, alongside CNOOC. The two ventured into Uganda after each acquiring 66.66 per cent stake from Anglo-Irish Tullow Oil PLC, which recently sold off its entire stake, and is currently processing winding up its operations.

Uganda National Oil Company (UNOC) is the statutory body mandated to manage the country’s commercial interests in the oil sector, including marketing the country’s share of petroleum, and developing in-depth expertise in the sector. It manages Uganda’s 15 per cent equity stake in the EACOP.

French Total E&P owns majority 72 per cent shareholding in the East African Crude Oil Pipeline (EACOP), followed by UNOC with 15 per cent, CNOOC with eight per cent, and TPDC with five per cent. However, officials described Tanzania’s shareholding through its national oil company, TPDC, as tentative.

Uganda’s 15 per cent stake is in sync with the 15 per cent stake in the production licenses for each of the oil fields operated by Total E&P and CNOOC. 

The construction phase, whenever it kicks off, is expected to run for at least three years paving way for commercial oil production by the earliest, 2025. Officials, however, intimated they expected construction to start tentatively by July.

The EACOP, which runs for 1,443km from Hoima district to Chongoleani terminal in Tanga at the Indian Ocean in Tanzania,  will be developed in 60:40 per cent debt to equity arrangement. 

Eighty [80] per cent of the pipeline, 1,147km, will be on the Tanzanian side, and it is estimated that 80 per cent of the project capital expenditure will be spent in Tanzania. The Ugandan section of the pipeline is about 296km through 10 districts and 25 sub-counties, and 172 villages.  

CREDIT: DAILY MONITOR