Uganda-Tanzania to sign final oil deal on Sunday

Uganda now plans to start pumping crude in 2024. That will keep Total out in front over the next few years. In sub-Saharan Africa, the company is projected to spend almost twice as much as Exxon Mobil Corp. and Eni SpA through 2025, according to Rystad Energy A/S analyst Parul Chopra. When North Africa is included, Total and Eni are seen neck-and-neck.

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President Museveni of Uganda and the Tanzanian President Samia Hassan Suluhu. PPU FILE/PHOTO

By Nasser Kasozi Akandwanaho

The Governments of Uganda and the United Republic of Tanzania will on Sunday 11th April seal the long-awaited Final Investment Decision (FID) with international oil companies Total E&P and CNOOC at Entebbe statehouse.

The decision will unlock billions of dollars of investment in Uganda’s oil and gas sector. The $5.1 billion Ugandan oil project will extend Total’s dominance as the biggest spender in sub-Saharan Africa.

Tanzania’s President Samia Suluhu Hassan is also traveling to Kampala to take part in the three-way talks that should culminate in the signing of the deal.

This will be President Samia’s first state visit since she replaced the late John Pombe Magufuli who died on March 17.

Total chief executive Patrick Pouyanné, is expected in the country over the weekend according to officials from Uganda’s energy ministry.

The deal will also pave way for the construction of the 1440km crude export pipeline from Western Uganda to the Tanzanian Indian Ocean Port of Tanga, a key piece of infrastructure needed to get the Uganda’s oil out of the ground and on to international markets.

France’s Total, China’s CNOOC, the governments of Uganda and Tanzania are shareholders in the pipeline project.

As much as $10 billion in investment is expected to flow into Uganda when the FID is closed.

Uganda discovered commercial oil deposits in its mid-western region over 14 years ago but extraction has delayed due to the protracted negotiations with the oil majors.

Uganda now plans to start pumping crude in 2024. That will keep Total out in front over the next few years. In sub-Saharan Africa, the company is projected to spend almost twice as much as Exxon Mobil Corp. and Eni SpA through 2025, according to Rystad Energy A/S analyst Parul Chopra. When North Africa is included, Total and Eni are seen neck-and-neck.

The Ugandan venture isn’t the only African project coming to fruition for Total. Its giant liquefied natural gas project in Mozambique is targeted for completion in 2024, though workers were evacuated from the construction site last month amid security threats from an escalating insurgency.

Total also has projects planned in Angola and Nigeria over the next few years, following which “spending would start to relax,” said Adam Pollard, a senior analyst at WoodMac.

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