Uganda’s First Oil: Tanzania Signs Final Oil Pipeline Agreement

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The Tanzanian government has signed the Host Government Agreement for the East African Crude Oil Pipeline (EACOP), concluding a set of legal frameworks and contractual obligations between Uganda as the host country, and EACOP Co. as the project company Co.

The signing of the Host Government Agreement by Tanzania’s President Samia Suluhu Hassan in Dar es Salaam was witnessed by President Yoweri Museveni.

The shareholders in the EACOP company Co. are: the Uganda National Oil Company (UNOC) with 15%; the Joint Venture Partners (Total Holdings International B.V. with 62% and CNOOC Uganda Limited with 8%) and the Tanzania Petroleum Development Corporation (TPDC).

TPDC will take shareholding of up to 15%. The Shareholders Agreement is significant because it has constituted the EACOP Company, and will now guide the funding of shareholding, finance structure and general governance of the company

Chen Zhuobia, the CNOOC Uganda President and Martin Tiffen, the general manager EACOP company were present. Uganda’s UNOC was also present at the function.  

The conclusion of the agreement now paves the way for the construction of a 1,440-km crude oil pipeline from Uganda’s Albertine region to Tanzanian seaport city of Tanga.  

The signing of the agreement in Tanzania ends close to four years of negotiation between Tanzania and Uganda from the time when Intergovernmental Agreement for the pipeline was signed.

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The significant investment that has now been unlocked into Uganda’s economy includes the implementation of the Tilenga Project in Buliisa and Nwoya districts (approximately $4 billion); the Kingfisher Project in Hoima and Kikuube Districts (approximately $1.5 billion); and, the East African Crude Oil Pipeline (EACOP) that will cross the ten (10) districts of Hoima, Kikuube, Kakumiro, Kyankwanzi, Gomba, Mubende, Lwengo, Sembabule, Kyotera and Rakai in Uganda (approx. $3.6bn).

This is in addition to what Government is already investing in the required support infrastructure, including Hoima International Airport (over $500m) and 700 kilometres of oil roads (approx. $900m).

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