A ONE-DAY working visit to Tanzania by the President of Uganda Yoweri Museveni on Sunday, cleared the way for the construction of 1,445km long Hoima-Tanga crude oil pipeline.
President Museveni and his Tanzanian host President John Magufuli witnessed the signing of an agreement in Chato District, Geita Region, on Sunday, paving the way for the construction of the crude oil pipeline running from Ugandan oilfields to the Tanzanian port of Tanga Speaking at the event, Museveni said the project has to begin with immediate effect for the people of the two countries to start enjoying the fruits endowed resources.
“Since we discovered the oil in Uganda, there has been a lot of debate and negotiations on terms to be applied, it’s good that all these have come to an end and now, we are ready for the project,” he said in an event that was live broadcast from Chato Airport.
According to Museveni, to begin with, the project is set to exploit 6.5 billion barrels where Tanzania will get 60 per cent of the profit to be obtained and the remaining 40 per cent will be for Uganda.
“The oil will be explored from the area covering 40 per cent of the total area that has been discovered to have that natural wealth, we have decided to start with it since it’s just the new area of investment,” he explained.
According to him, there had been long debates and negotiations between Uganda and other stakeholders on the amount of tax and other expenses, which delayed the commencement of the project.
To allow the timely commencement of the project, President Museveni said his country had to forego a total of 800m US dollar revenue that was to be collected from the project for the next 25 years.
“Since it’s a new area, we decided to use the small area from where we will also be able to learn more for the sake of doing better in the next project,” he added.
Tanzania will earn 7.5tri/- and create more than 15,000 jobs over the next 25 years, or more from the project.
The agreement on the pipeline construction comes a few days after the government of Uganda and Total concluded and signed the Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) project.
After the signing of the HGA, the Ugandan leader promised to get in touch with his Tanzanian counterpart, Dr Magufuli, to resolve other pending issues, especially concluding the Host Government Agreement in Tanzania.
In Tanzania, the UTCOP would pass through eight regions — Kagera, Geita, Shinyanga, Tabora, Singida, Dodoma, Manyara and Tanga, where it would cross through 24 districts and 123 wards.
The Tanga route, according to feasibility studies, was deemed the cheapest for Uganda to transport its oil from the production point in Hoima to the international market.
It has convenient flat terrain, not interrupted by other activities, as well as lowest environmental challenges, and provides the shortest schedule for it to see the first oil export earliest in mid-2020.
According to President Museveni, the project will also make fuel cheaper hence fostering the aviation industry, whereby regional airlines will get cheaper jet fuel.
Minister for Foreign Affairs and East Africa cooperation Prof Palamagamba Kabudi once stated that project implementation would open up the region for further opportunities for trade, and in turn fast track socio-economic development.