YES, President Samia Suluhu Hassan yesterday accompanied by some top government officials made a trip to Uganda to sign off key agreements for commercialisation of the proposed East African Crude Oil Pipeline (EACOP), bringing to end years of protracted negotiations and setting on course production of planned 216,000 barrels capacity per day.
This mega $3.5bn (£2.7m) project, whose 80 per cent of 1,147km will be on the Tanzanian side and about 296km in Uganda, will not only benefit the former in terms of jobs’ creations to the locals, but will also enhance bilateral ties. It is the prayer of the two countries that the French Total E&P with China’s CNOOC hired to implement the scheme, besides the governments of Uganda and Tanzania will deliver professionally and within the agreed time.
This is because previously it faced some hurdles, including protracted negotiations with the oil companies, and a plunge in prices for the international Brent crude oil as well as postponing the last month, March 22 deal signing following the fallen Tanzanian president John Pombe Magufuli.
The start of commercial oil production, according to the World Bank, will offer Uganda long-term prospects to diversify its economy and catapult it to upper middle income status by 2040, and this is the kind of development East African governments want in the region.
With commercial oil production at peak in the 2030s, the Bank estimates show that Uganda could earn up to $3bn (approximately Shs7 trillion) in revenues from exports of up to 60,000 barrels of oil per day. These revenues have the potential to propel the economy between 7-10 per cent forecast, up from the current stagnation of four per cent.
After yesterday’s signing, officials expect Total E&P and CNOOC to announce Final Investment Decision (FID)—the availability of at least $10b (Shs36 trillion) for the development phase, followed by awarding of the Engineering, Procurement, and Construction (EPC) contracts, which equally will employ our citizens instead of them coming with their foreign labourers.
Equally, implementing the oil pipeline from Buseruka subcounty, Hoima District, in Uganda’s Western Region travelling in a general south-easterly direction to pass through Masaka in Uganda, Bukoba in Tanzania, loop around the southern shores of Lake Victoria, before continuing through Shinyanga and Singida town, and end at the Port of Tanga, Tanzania, for export from the Indian Ocean will also address oil demands in the areas it will pass and hence, limit would be importations.
It is the prayer that also implementing the scheme is in a way posthumously honouring what the fifth phase President Magufuli wished for the country, and hence, another opportunity for the business community to tap.