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Museveni, Samia Suluhu witness the signing of final oil deal in Tanzania

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Uganda and Tanzania have signed a final oil deal that will see the construction of a US$3.55 billion-crude export pipeline that would pump Ugandan oil for export.

The 1,445 km-project will run from Uganda’s western oil rich district of Hoima, where crude reserves were discovered in 2006, to Indian Ocean seaport of Tanga in Tanzania. If completed, the project will become the longest electrically heated crude oil pipeline in the world.

The final signing of the Tanzania Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) took place today in Tanzania’s capital, De-er-salam.

Total is one of the owners of Ugandan oilfields, alongside China’s Cnooc after Britain’s Tullow Oil sold its shares to Total. The Uganda HGA was signed on 11th April 2021.

Recently, Uganda and international oil firms French Total E&P, and China’s Cnooc earlier signed off four key agreements for commercialization of the proposed East African Crude Oil Pipeline (EACOP), bringing to end years of negotiations and setting on course Uganda’s oil project for the next phases of development and production by earliest 2025.

Speaking of the signing, president Museveni said the EACOP is an important regional infrastructure that will see the thriving oil sector.

“Tanzania and Mozambique have more gas than other countries. We have gas but yours is more. We need gas for steel industries to get steel from iron ore.” Museveni said that Uganda has a market but has no gas.

Museveni said the pipeline can be used to take gas to Uganda. Uganda estimates overall crude reserves at 6.5 billion barrels, while recoverable reserves are seen at between 1.4 billion and 1.7 billion barrels.

Tanzania’s President Samia Suluhu applauded Uganda for making a final step to the exploration and exportation of oil. Uganda’s oil is expected in 2025.

She said Tanzania agreed to waive taxes, offered to take up shares in the pipeline project and charge a tariff of US$12.2 per barrel to make the project feasible.  According to agreements, 60 % of the taxes will go to the government of Tanzania and Uganda will take 40%.

“The EACOP will create over 15,000 direct jobs and temporary ones will peak to 30,000.” She said

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