Uganda-Tanzania sign agreement for East Africa Crude Oil Pipeline project

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UGANDA and Tanzania have signed the Host Government Agreement (HGA) towards the implementation of the East Africa Crude Oil Pipeline (EACOP) project. The pipeline will run from Uganda’s oilfields around Lake Albert to the port of Tanga in Tanzania’s northeast region. According to Hassan Abassi, Tanzania’s government spokesman, more than three-quarters of the pipeline will run through Tanzania.

Abassi also said that Tanzania will earn an estimated $3.24bn and create more than 18,000 jobs over the next 25 years, or more, that the project will be in operation.

The signing of the agreement between the two East African countries comes a day after Uganda and French oil and gas multinational company Total struck a deal that established a Host Government Agreement governing the export pipeline project in the country and the conditions of entry of the Uganda National Oil Company in the project.

In a statement, Pierre Jessua, the managing director of Total E&P Uganda said that owing to the deal, they have reached a major milestone that paves 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,’ he said.

Total is the major shareholder in Uganda’s oil fields after agreeing to buy Tullow Oil’s stake in onshore fields. It will work alongside Chinese state-owned CNOOC to develop the Oil reserves that are estimated to have 6bn barrels.

Recent concerns about the project

Recently a report published by the International Federation for Human Rights (FIDH) and the NGO Oxfam pointed out that if carried out successfully, this project will affect more than 12,000 families and will cause the destruction of sensitive ecosystems in a region whose biodiversity is one of the richest in the world.

Regarding the concerns, Total said that it is determined to “continue useful dialogue” with NGOs and communities and to take on board some of their recommendations.

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