President Yoweri Museveni and his Tanzanian counterpart John Pombe Magufuli committed on expediting the resolving of issues that are delaying the East Africa Crude Oil Pipeline (EACOP) project works to commence.
This was during a Sunday meeting held in Chato, Tanzania.
The two heads of states signed an agreement allowing for the construction of a 1,445 km (898 miles) crude oil pipeline.
The $3.5bn (£2.7m) project will connect Uganda’s oil fields to Tanzania’s port of Tanga.
The signing ceremony was attended by presidents of both countries.
“In principle, we agreed that our governments expedite the harmonization of pending issues in the spirit of the East African Community (EAC), the remaining agreements be fast-tracked including the Tanzanian HGA and we quickly carry out the implementation of EACOP project,” President Museveni said.
The meeting came after Uganda signed the Host Government Agreement with Total on Friday.
HGA is an agreement between a foreign investor and a host government governing the rights and obligations of the foreign investor and the host government with respect to the development, construction, and operation of a project by the foreign investor.
The oil pipeline will start in Buseruka sub-county, Hoima District, and run for 1,445km to the Tanzania port city of Tanga.
When complete, it will be the world’s longest heated oil pipeline.
The delays in signing these deals have pushed the announcement of the Final Investment Decision (FID), a key step in seeing various partners inject money in projects to commercialize Uganda’s oil resource.
The oil refinery Project Framework Agreement between the government and the Albertine Graben Refinery Consortium (AGRC) was signed in April of 2018.
The $3.5-billion refinery in Hoima district, which will have a refining capacity of 60,000 barrels per day, is to be built by the AGRC led by American firm General Electric.
The project, upon completion, will enable Tanzania to earn about $3.2 billion and create between 10,000 to 15,000 jobs over the next 25 years.
Uganda discovered oil reserves in 2006 and has over 6.5 billion barrels of oil.
Oil reserves were found in Uganda in 2006 but production has been delayed partly by lack of infrastructure including an export pipeline.
A start date for construction has not yet been announced for what is set to become East Africa’s first major oil pipeline.
But there are warnings the project could come at a huge cost to some Ugandan communities.
More than 12,000 families risk losing their land and livelihoods, according to a joint report by the International Federation for Human Rights (FIDH) and Oxfam.
Conservationists have also warned that ecosystems are at risk from the drilling in Uganda’s nature reserves.
