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Uganda and Tanzania sign crude oil pipeline deal

The agreement on the pipeline construction comes days after French oil company Total said it had reached an agreement with Uganda protecting its rights and obligations in the pipeline’s construction and operation - known as the host government agreement.

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Uganda and Tanzania sign crude oil pipeline deal www.bamcos.co.ke
Tanzania and Uganda signed an agreement on Sunday paving the way for the construction of a crude oil pipeline running from Ugandan oilfields to the Tanzanian port of Tanga

The leaders of Uganda and Tanzania have signed an agreement for the construction of what they say will be the world’s longest heated oil pipeline, linking Uganda’s planned oil fields in the country’s west to the Indian Ocean port of Tanga.

Ugandan President Yoweri Museveni and President John Magufuli of Tanzania signed the “host and implementation agreement” Sunday in the remote Tanzanian town of Chato.

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Construction of the 897-mile pipeline is expected to begin in 2021 and will cost an estimated $3.5 billion, according to Ugandan authorities who expressed optimism that money Uganda will earn from its oil deposits will finance ambitious infrastructure projects and launch the country into middle-income status. No further details about the agreement were released, including who will build the pipeline or how it will be financed.

French oil giant Total, a major investor in Uganda’s oil industry, announced the last week that it had reached a deal with Ugandan authorities governing the crude oil export pipeline that will cross sensitive protected areas, rivers, and farmland.

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“The conditions are set for the ramp-up of project activities and in particular, we will resume the land acquisition activities in Uganda while respecting the highest human rights standards,” Total’s Uganda office said in a statement.

Despite the assurances, local and outside watchdog groups have warned that the rights of local communities are at risk because of the pipeline project, which could displace over 12,000 families and endanger vital ecosystems.

The French rights group known as FIDH cited attacks on human rights defenders opposed to the project, a climate of fear, and a slow, inaccessible justice system out of reach for vulnerable people. Total is also criticized for digging oil wells in Uganda’s Murchison Falls National Park, a protected area popular with tourists.

Total and its development partner in Uganda’s oil fields — the China National Offshore Oil Corporation — must “take urgent measures to avoid what could be a disaster waiting to happen,” FIDH’s Sacha Feierabend said in a statement to The Associated Press.

It remains unclear precisely when Uganda will become an oil producer following administrative delays and tax disagreements with oil companies such as Tullow, which discovered Uganda’s oil reserves in 2006 but later sold its entire stake to Total for $575 million.

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