Magufuli, Museveni in fresh bid to speed up oil deal
Presidents John Magufuli and Yoweri Museveni inspect a guard of honour mounted by members of the Tanzania People’s Defence Forces (TPDF) shortly after the Ugandan head of state arrived at Chato Airport in Geita Region yesterday. PHOTO | STATE HOUSE
What you need to know:
- The Hoima-Tanga oil pipeline project features in talks during meeting between two leaders in Chato yesterday.
Dar es Salaam. President John Magufuli yester-day appealed to Tanzanian and Ugandan ministries overseeing the construction of the Hoima-Tanga oil pipeline to urgently clear the pending issues that have stalled the multi-billion dollar project.
His plea comes as the partners in the $3.5 billion East African Crude Oil Pipeline (EACOP) project are facing increasing pressure to reach a final investment decision (FID), scheduled for September.
Mr Salum Mnuna, Tanzania’s national coordinator of EACOP told The Citizen in an interview yesterday that the two countries had already signed an Inter-Gov-ernmental Agreement (IGA), which confirms financing and development of the EACOP. But he noted that there are still some pending issues.
“We are yet to sign the host government agreement (HGA) and the final investment decision (FDI). But we will sign both agreements in September,” Mr Mnuna said.
The Tanzanian official also told The Citizen that share-holding is yet to be decided on. Uganda, through the National Oil Company has con-firmed taking 15 per cent shares in EACOP. Tanzania will have its stake through the Tanzania Petroleum Devel-opment Corporation (TPDC).
The other players in the 1,445km export pipeline are China’s CNOOC, France’s Total and London-based Tullow Oil.
“The project shareholders will meet next week here in Dar es Salaam to discuss various issues related to the crude oil pipeline. All the pending issues are on the agenda, including shareholding agreements,” said Mr Mnuna.
He added that transportation tariffs – which in March this year were still among the pending issues – have since been settled. “But all in all construction has already begun for the first phase. Once the pending issues are resolved, the second stage will begin.”
In an interview with The Citizen yesterday, the Perma-nent Secretary in the Energy Ministry, Dr Hamis Mwiny-imvua, was upbeat about the project saying Tanzania was still committed, and would provide the requisite incentives to make the oil pipeline dream a success.
He said the Ugandan government was yet to resolve “some matters” with a consortium, including the amount of oil to be exported and the amount for a refinery to add value.
In April last year Uganda signed a deal with a consor-tium, including a subsidiary of General Electric, to build and operate a 60,000 barrel per day refinery that will cost between $3 billion and $4 billion.
The refinery is expected to be operational by 2023. President Magufuli yesterday hosted his Ugandan coun-terpart Yoweri Museveni in Chato District where the oil pipeline issue featured in the Tanzanian leader’s speech.
The Head of State emphasised the urgency of resolving the pending matters saying the citizens of the two nations have waited for a long time.
“Many citizens (Tanzanians and Ugandans) will benefit from this project upon its completion,” said Dr Magufuli.
The two leaders also talked about general economic and political ties between their countries, with a focus on the need to increase trade between Dar es Salaam and Kampala.
