Tanzanian President Suluhu due in Uganda to sign oil deals

Kampala, Uganda |  THE INDEPENDENT  |  The long wait for Uganda’s Final Investment Decision (FDI) for oil and gas could come to an end this Sunday, following talks between government officials and industry leaders from Uganda and Tanzania.

Tanzania’s new president Samia Hassan Suluhu is due in the country for talks that should culminate into the signing of the deals on Sunday 11, according to a top official from the Ministry of Foreign Affairs. 

“The Tanzanian President will be on her journey in a few hours for talks, which will climax with the signing ceremony on Sunday,” the official said. This is President Suluhu’s first state visit since her elevation to replace the late John Pombe Magufuli, as the president of Tanzania last month.

“Something major is expected to happen this weekend, regarding Uganda’s oil,” confirmed Herbert Ssempogo, Senior Corporate Affairs Officer at the Uganda National Oil Company (UNOC), without giving details.

The late Magufuli was due in Kampala on March 22 for the three-way signing of the crude oil export pipeline deal between the governments of Uganda and Tanzania and the French oil giant Total, the lead investor. However, he died a week before the due date.

Kampala then announced that the deal would be signed the early half of April, to pave the way for the construction of the 1440km export pipeline from Western Uganda to the Tanzanian Indian Ocean Port of Tanga. According to concluded discussions so far, construction of the pipeline will be completed within 36 months of the signing of the deal, and this will commence the commercial production of oil.

Refinery plans set

A refinery processing thousands of barrels a day is also planned to process crude oil and the finished products will be consumed by the local and regional markets. President Magufuli had vowed that it would take as short as 18 months and wanted all the other processes fast-tracked. The project is due to cost USD3.5 billion.

The final talks before the final deal is signed touch on the crude oil transportation, the transport tariffs as well as the shareholding structure of the East African Crude Oil Pipeline Company, EACOP.

According to the current structure, Total SA owns 45 per cent shares in the company, while China’s CNOOC holds 35 per cent. 

Another 15 per cent is held by the government of Uganda through the UNOC, with the other 5 per cent held by Tanzania through the Tanzania Petroleum Development Corporation. Uganda first discovered commercially viable oil deposits in 2007, but production dates have been postponed several times by legal and tax disputes.

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📌 FILE PHOTO: Magufuli and Samia 2015 pic.twitter.com/ssjO4OOIMr

— The Independent (@UGIndependent) March 11, 2021