Uganda, Tanzania, and Total S.A., the French oil major, on Sunday signed three agreements to finalise the development of an oil pipeline from Uganda’s oil fields to Tanga on the Tanzanian coast, one of the last steps to the sanctioning of the country’s oil projects.
Yoweri Museveni, the president, Samia Suluhu Hassan, Tanzania’s president, and Total’s chief executive Patrick Pouyanné agreed the East African Crude Oil Pipeline at State House in Entebbe.
The agreements include two host government agreements, the shareholders agreement, and the tariff and transportation agreement governing the transportation of crude oil from Uganda to Tanga, and onwards to international markets.
“These agreements open the way for the commencement of the Lake Albert development project,” Total said in a statement released to the London Stock Exchange. “The main engineering, procurement and construction contracts will be awarded shortly, and construction will start.”
The agreements’ signing was initially scheduled for last month but was postponed to Sunday following the death of Ms Hassan’s predecessor, John Magufuli, from a suspected coronavirus infection (Mr Magufuli was an outspoken Covid-19 denier who refused to implement containment measures in Tanzania – his government claimed he died from heart complications).
The signing takes Uganda closer to a final investment decision – or project sanctioning by the oil firms – on its several projects. Indeed, Mr Pouyanné said the oil firms are targeting oil production in 2025.
The projects include Total’s Tilenga, Kingfisher in Hoima operated by Chinese state-owned China National Offshore Oil Corporation – development costs for the two fields are estimated at $6.7bn – and the $3.8bn oil pipeline.
Robert Kasande, the permanent secretary of the energy ministry, said today’s event is “a key milestone that will catapult the industry to the next level of development and, consequently, production.”
The minister of energy and mineral development, Goretti Kitutu, said the government “is delighted at this development and will continue building its capacity to ensure adequate support to the sector, amidst the beehive of activity following today’s launch.
She added: “Our Partners, the oil companies have shown a lot of commitment to the project. All this demonstrates that, without a doubt, Uganda is on course towards first oil.”
