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Uganda joining the oil producers club is dependent on the pipeline being built between the oil fields in the Lake Albert region and the Tanzanian port of Tanga, which has grabbed the world’s attention in recent days as the East African Crude Oil Pipeline (EACOP) is mired in controversy.
Uganda joining the oil producers club is dependent on the pipeline being built between the oil fields in the Lake Albert region and the Tanzanian port of Tanga, which has grabbed the world’s attention in recent days as the East African Crude Oil Pipeline (EACOP) is mired in controversy. When completed this will become the world’s longest heated pipeline, which will evacuate 230,000 barrels of oil per day.
Meanwhile, climate activists call the project an environmental disaster waiting to happen. A number of major lenders and insurers have pulled out or declined to commit funds to the pipeline, which will entail a cost of around US$5 billion. Arguments for and against the project are flying thick and fast. Ugandan President Yoweri Museveni called the West, particularly the European Union’s arguments against the project, shallow and egocentric. He believes that it was meant to block the project, which is going to be the lifeline for his country and people.
The European Parliament resolution criticized the pipeline on September 17 and told the implementing agency TotalEnergies to go slow on the project at least for a year. However, Kampala threatened TotalEnergies, where the Chinese oil company has also a minor strike, insisting that it would think of changing partners if the project does not progress as scheduled. It is set to commission the multi-country pipeline by 2025.
Recently, the Islamic Development Bank committed US$100 million to fund the pipeline’s construction. France’s TotalEnergies is the pipeline’s biggest shareholder with a 62% stake. Uganda and Tanzania both hold 15% each and Chinese oil major CNOOC has an 8% stake.
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Uganda also seeks to commercialize its oil by building a 60,000-barrel-per-day refinery at Kabaale, which is estimated to cost US$4 billion, while its oil and gas reserves are estimated at 6.4 billion barrels. As per the reckoning of the experts, the recoverable hydrocarbon is estimated at 1.4 barrels.
