Uganda, Kenya: Oil Deal Hits A Dead End


Kenya’s desire to construct a crude oil pipeline has come to the end as Uganda partnered with Tanzania to build up the pipeline through Tanga.

Tanzania President John Magufuli met Uganda’s President Yoweri Museveni  and both agreed to the terms and gave green flag to the project.

“The two agreed to begin construction of the crude oil pipeline from Tanga to Uganda, for the benefit of the two countries and their East African counterparts,” said Tanzanian government spokesman Gerson Msigwa on Tuesday.

The oil pipeline project will stretch up to 1220 kilometres. It will provide employment to 15,000 people, reports Daily Nation.

The estimated capital cost of the project is $4,690,628,665 (Sh462 billion) and the annual operating expenditure will be $131,490,122 (Sh12.95 billion).

Kenya and Uganda has already concurred to build a crude-oil pipeline through the Northern Lamu route mid last year. But France’s Total, an investor in pipeline project, said that the route is quite insecure to lay down the project, as it passes by war-torn Somalia, reports Standard Digital.

Total CEO Patrick Pouyanne is believed to have pushed the deal between Tanzania and Uganda, by convincing President Museveni that the “Tanga route is better”, according to an official at the ministry of energy and mineral development in Uganda.

Moreover, the countries signed a memorandum of understanding last year. Since the deal, they began a study over the pipeline going through Tanga.

“During the visit, Total insisted that it will produce Uganda’s oil despite falling crude oil prices, but through the port of Tanga,” declared an anonymous official.

However, there was no mention of Kenya’s stance. The country has also discovered oil and a task force has been set up by President Uluru Kenyatta, to figure out the exportation of oil by rail and road.  The short-term plan of transporting oil by rail and road is expected to be in the process until the country gets a firm solution.

Other investors of the oil project in Uganda include: China’s CNOOC and Britain’s Tullow Oil. Tullow Oil is also working in Kenya.

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