Tanzania, Uganda to ink EACOP final investment agreement today

02Feb 2022
The Guardian Reporter
The Guardian
Tanzania, Uganda to ink EACOP final investment agreement today

TANZANIA and Uganda are today scheduled to sign the final investment decision (FID), one of the pending components before kicking off the $3.5bn East African Crude Oil Pipeline (EACOP) project.

The project is set to bring to life a 1443km-long heated oil pipeline from Hoima in Uganda to Tanga port, the biggest joint investment in the East African Community (EAC) area so far.

The Vice President’s Office said in a statement yesterday that signing the FID will be held at Kololo Stadium in Kampala, with VP Dr Philip Mpango having arrived in Uganda for the ceremony, in place of President Samia Suluhu Hassan.

The signing ceremony will also be witnessed by the various partners in the pipeline agreement, stretching from project investors to construction firms, and the partner state governments, where the key stakeholders are Total Oil Co. (France) with a 62 per cent stake the project, the Tanzania Petroleum Development Corporation (TPDC) with 15 per cent stake, Uganda government 15 per cent), and the China National Offshore Oil Corporation (CNOOC) with eight per cent.

In April 2021, the two countries signed the host government agreement, shareholder agreement (for the pipeline company) and tariff agreements.

The crude oil project is expected to help increase employment for thousands of youths and stimulate joint oil exploration in the region.

In the total 1,443-km pipeline 1,147km will be on Tanzanian territory in eight administrative regions and 24 districts over the next five years by some estimates, after Uganda discovered deposits of 6.5bn barrels of oil.

In the project, TPDC shall be holding a 15 per cent stake, while the country obtains 60 per cent of the tax revenues.

The project will stimulate exploration of oil and gas activities in the region, with considerable expectations of striking deposits in the area covered by the pipeline or close to it, officials noted.

Tanzania hopes to find oil around Lake Eyasi while the DRC has prospects of finding oil, where the infrastructure for commercial exploitation and export will be EACOP.

Work on the pipeline will create employment for more than 10,000 Tanzanians during construction, and 1,500 after oil transportation starts to flow along the facility.