The Uganda government and Total, the French oil major, have Friday signed the Host Government Agreement which will govern the East Africa Crude Oil Pipeline project.
The parties also signed two agreements on the conditions of the entry of the government-owned Uganda National Oil Company in the project. The national oil company is mandated to manage the country’s commercial interests in the oil and gas sector.
The ceremony, which took place at State House Entebbe, was presided over by President Museveni, and witnessed by Patrick Pouyanné, Total’s chairman and chief executive officer.
Mary Goretti Kitutu, the minister of energy and mineral development, signed on behalf of Uganda while Nicolas Terraz, the senior vice president Africa for exploration and production at Total signed for the company.
The signing of the agreement means that the joint venture partners in the Lake Albert oil project and the government have agreed on the project’s commercial framework.
It also represents significant progress towards achieving a final investment decision on the project, which is expected by the end of this year.
“We have today reached major milestones which pave the way to the final investment decision in the coming months,” said Pierre Jessua, the managing director of Total E&P Uganda.
“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,” Mr Jessua added.
“The conditions are set for the ramp-up of project activities and, in particular, we will resume the land acquisition activities in Uganda while respecting the highest human rights standards,” a statement issued by Total E&P Uganda said.
“Total E&P Uganda reiterates its willingness to pursue a constructive dialogue with the communities and NGOs regarding all project activities.”
Speaking shortly after the signing ceremony, President Museveni said that proceeds from oil will be used to develop important sectors such as infrastructure, education, ICT, and health.
Related: Museveni says oil revenues will be used to build “durable capacity”
“I am glad that Total and other companies licenced in the country are taking bold steps to quickly commence the production of petroleum,” the president added.
He added that Uganda’s progress to the delivery of first oil from the Lake Albert project has been “slow but steady and sure”.
Mr Pouyanné said: “It was a bumpy road, but I am glad we have overcome the challenges. I thank the teams from both sides that have worked tirelessly.”
The ceremony follows a series of high-level discussions between president Museveni and Mr Pouyanné aimed at addressing the commercial bottlenecks in the achievement of a final investment decision for the Lake Albert and pipeline projects.
