Tanzania and Uganda have partnered to construct an oil pipeline connecting Ugandan oilfields to the Tanzanian port of Tanga, media reports said. It is reported that both countries have signed an agreement to carry out the development.
The agreement was signed by Tanzania’s President John Magufuli and Ugandan President Yoweri Museveni in Tanzania.
The move by both the countries comes at a time when the French oil company Total sealed a deal with Uganda safeguarding its rights and obligations in the pipeline’s construction and operation.
Hassan Abassi, Tanzania government spokesman, told the media, “80 percent of the pipeline will run through Tanzania. Tanzania will earn 7.5 trillion shillings ($3.24 billion) and create more than 18,000 jobs over the next 25 years, or more, that the project is in place.”
It is reported that Uganda found oil reserves in 2006. The cost requirement for the commercial production of the 1,445-km long pipeline is $3.5 billion.
The pipeline construction is expected to be completed between 1 to 2 years but Uganda is yet to announce the starting date.
The French oil company holds the major share in Uganda’s oilfields. Then the company will acquire the entire stake for $575 million in Tullow Oil, a jointly held onshore field in Uganda. Tullow is planning to confirm the deal in the fourth quarter of the year.
Many oil companies around the world have started to operate but they have to cover up losses triggered by the outbreak of Covid-19.