KAMPALA: The French oil giant Total SE's chief executive, Patrick Pouyanne yesterday described as a "momentous occasion in history" the signing of the three agreements for development of the proposed East African Crude Oil Pipeline (EACOP) and committed to first commercial oil production starting around 2025.
"It is the beginning of a journey," Mr Pouyanne, who jetted into the country Sunday morning for the signing ceremony alongside President Museveni and his Tanzanian counterpart Samia Suluhu Hassan, said. "Expect the first oil tanker to dock at Tanga port in early 2025."
Once developed the 1,443km EACOP will transport Uganda's crude oil from oil fields in the districts of Nwoya, Buliisa, Hoima and Kikuube to Chongoleani terminal in Tanga at the Indian Ocean in Tanzania, where it will be loaded into tankers en route to the international market.
The transit tariff per barrel of crude oil going through the pipeline was capped at $12.77 owing to the tax concessions offered by the Tanzanian government. The pipeline is a merely a medium to take Uganda's crude oil to the international market, wherever prices are favourable; so the higher the tariff/transport the less benefits, added to other costs of getting it (oil from the ground).
The project is expected to cost at least $3.8billion pooled through the EACOP holding company co-owned by the oil companies--Total E&P and China National Offshore Oil Company (Cnooc), and the governments of Uganda and Tanzania through national oil companies, Unoc and TPDC, respectively.
Mr Pouyanne described the Uganda oil project as "one of the largest in Africa" with capital requirements of more than $10b and which represent significant social and environmental stakes as the company's area of operation is partly located in the Murchison Falls National Park.