Uganda,Tanzania to resume crude oil pipeline talks

Talks for the construction of the crude oil pipeline from Buseruka Sub-county in Hoima District to Tanga in Tanzania are soon resuming, Kazi-njema has learnt.

Negotiations for a Host Government Agreement (HGA) for the East African Crude Oil Pipeline (EACOP) will start soon between Uganda and Tanzania after Total completed acquisition of 33.334 percent of Tullow Oil’s stake.

The acquisition paved way for the French oil giant to own 66.7 percent of upstream stake in the Albertine Graben project.

The purchase has also given Total a legal ownership and the right to fast-track execution of the EACOP project.

An HGA is an agreement between a foreign investor and a local government intending to reduce financial and political risks posed to investors by sudden changes in national laws.

It outlines issues pertaining to taxes and other revenues to be accrued from the project, participation of Tanzanians in the project and how to deal with challenges that might arise during the implementation of the project.

HGA talks with Tanzania will also begin after the talks between Total and Uganda are concluded and come after the completion and issuance of an environment impact assessment certificate by Tanzania’s National Environment Management Council (NEMC).

The Uganda-Tanzania Crude Oil Pipeline (UTCOP) also known as EACOP is intended to transport crude oil from Uganda’s oil fields to the port of Tanga in Tanzania on the Indian Ocean.

The oil pipeline will start from Kabaale Village in Buseruka Sub-county, Hoima District in Bunyoro Sub-region to the port of Tanga in Tanzania travelling a distance of approximately 1,410km (880 miles).

Uganda has proven oil reserves exceeding 6.5 barrels with about 2.2 barrels recoverable.

Previously, Uganda had agreed to build a joint Uganda – Kenya Crude Oil Pipeline to the Kenyan port of Lamu.

However, security and cost concerns motivated parallel negotiations with Tanzania regarding a shorter and safer route to Port Tanga with the support of the French petroleum conglomerate Total SA.


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