UGANDA President Yoweri Museveni described the April 11, signing of the East Africa Crude Oil Pipeline (EACOP) between Tanzania and Uganda as the third victory for the two countries, saying the choice of the date was a sentimental one.
Yesterday, Tanzania and Uganda signed three key agreements to kick off the construction of what is set to become the world’s longest Crude Oil Pipeline.
The Ugandan President Museveni and his Tanzanian counterpart Samia Suluhu Hassan witnessed the signing of the agreements at State House Entebbe, 40 km south of the Ugandan capital Kampala.
The two countries signed the Host Government Agreement, Shareholder Agreement (for the pipeline company) and Tariff agreements.
Also present were Energy Ministers from both countries, Total Chief Executive Officer and CNOOC President.
The signing of the agreements paves way for the construction of the 1,440 km crude oil pipeline from Uganda’s Albertine region to the Tanzanian seaport of Tanga.
It brought to an end years of protracted negotiations and setting on course Uganda’s oil project for the next phases of development and production by the earliest 2025.
Speaking shortly after the signings, President Museveni said; “42 years ago, this same day is when the Tanzanian troops of the 20th Division under General David Msuguri, captured Kampala and enabled a Ugandan army officer David Oyite Ojok to announce the fall of Idi Amin on Radio Uganda.”
He added: “At that very moment with my rapidly growing Fronasa troops operating with another TPDF task force division under Major General Cyrus Mayunga, I was on the Mbarara front. Today, therefore, is a triple victory for Tanzania and Uganda…. Ushindi wa Mara tatu.”
President Museveni said the two countries have in the past posted military and political victories and now with the oil pipeline deal it is an economic victory
According to President Museveni, when the Tanzanian route became viable a new consideration crossed his mind - the historical contribution of Tanzania in the liberation of Uganda in both 1978-79 and 1985-86.
President Samia after witnessing the signing said the project would not only benefit Uganda and Tanzania alone but the entire region. She said the EACOP will unlock the regional potential and attract more investors to east Africa.
“Our region is well-endowed with abundant resources. In order to fully and effectively exploit these resources, we need infrastructure,” she said.
President Samia expressed gratitude to join her counterpart to witness the historic event of the signing of the tripartite agreement for the construction of the crude oil pipeline.
“The signing of this agreement is an auspicious occasion not just for Tanzania and Uganda but the entire East Africa region, as we are all aware this project will have an impact on socio-economic development and geostrategic dynamics.”
Ms Samia further said among other benefits, the project will yield revenues to Tanzania and Uganda, while creating short and long term employment for both highly and semi-skilled professionals as well as casual labours. She said the project will address the unemployment challenge, especially among the youth.
More importantly she said, the project will strengthen strategic partnership and cooperation between the two brotherly countries and will forge further regional integration and people interaction.
“It is my firm belief that once this project is complete, it will benefit our countries and region at large,” she said.
President Samia also assured President Museveni that under her stewardship, she will cement further the existing relations and scale to a greater height new areas of cooperation for the benefit of the countries and people.
The event was scheduled to take place on 22 March 2021 however, it didn’t due to the sudden and untimely demise of President John Magufuli.
“I would like to thank President Museveni as well as our cooperating partners -- the international oil companies for their decision to postpone this event…this kind of gesture portrays a true definition of friendship and partnership,” President Samia said.
In addition to witnessing the signing of the agreements, Presidents Samia and Museveni also signed a joint communiqué regarding the implementation of the project and ordered the remaining elements in the implementation of the project to be completed as soon as possible.
The project will involve the construction of a 1,445 km heated oil pipeline, of which 1,115 kilometres pass through Tanzania.
Investment in this project is expected to cost US Dollars 3.5 billion and generate about 10,000 jobs during construction as well as transport 6.5 Billion barrels of oil discovered in the Lake Albert sub-basin in Uganda to the Tanga Port in Tanzania.
President Museveni said Uganda discovered petroleum and gas in 2006. “Initially I did not favour the idea of the pipeline, my question was why export the oil? Don’t the East Africans need the oil? In this thinking, I preferred an oil refinery only, so that we use the extractable oil,” he said.
He further said the Uganda demand was currently 39,000 barrels of oil per day at the price of 50 US dollars per barrel equivalent to about 63 US dollars per barrel of refined product, this locally refined petroleum will knock off 1.22 billion US dollars from Uganda import expenditure for petrol, diesel and aviation fuel.
“If you include the petroleum by-product such as plastics the saving on the import bill will add another 400 million US dollars so that will make it almost 1.7 billion US dollars saving on import.
Using the extractable portion of the 6.5 billion barrels confirmed this will ensure petroleum self-sufficiency for Lake Victoria basin countries and those neighbouring them for 38 years based on the present consumption level,” he elaborated.
Expounding further he said the oil refinery will be owned jointly by EAC countries if they agree to participate. “So that was my original plan, why pipeline?
Why export the oil? I heard a rumour that there were human beings here who need the oil why to take it away from them and take it to others why don’t they deal with the self-sufficiency,” He added,
“The oil companies were however biased in favour of exporting crude oil only, the compromise then was okay let us have both the refinery and pipeline that’s why we are here now,” “Most of this was when the Tanzanian route was not in the picture we were still debating about Mombasa and Lamu of Kenya when the Tanzania route of Tanga became more viable a new consideration entered my mind the historical role of Tanzania in the liberation of Uganda in both 1978-1979 and 1985- 1986,” he narrated.
He said Kenya of course is a brother country just like Tanzania, however historically there is this unique role of Tanzania, he is, therefore, more satisfied that the project will make a modest contribution to the development of Tanzania.
“It cannot compensate of the huge sacrifice Tanzania made for the defeat of Amini and liberation of the whole Southern Africa, it is just a modest contribution.”
Earlier, Chief Executive Officer (CEO) and Chairman of Total Patrick Pouyanné said he was very happy to share the historic date between Tanzania and Uganda, a major and historic milestone for East Africa and the world. “It’s a very large project, one of the largest which will be developed in this continent.
Thank you very much for your commitment to this project. We should not forget that this is just the beginning of the journey as it will take four years before oil will start flowing, negotiation has taken long but now we have one objective,” he said.
He added, “We will have an objective of at least 20 per cent of the spending will be spent locally for the benefit of your population, I have been involved in this project for 12 years, it took quite some time to attain this goal.”