Uganda is opting to borrow Ush481 billion ($130 million) from the domestic market to financially back its 15% shareholding with equity of the East African Crude Oil Pipeline (EACOP).
The stake in the EACOP is owned by the Government of Uganda through the Uganda National Oil Company and will further establish the East African country’s control on the project.
The loan will be used to settle “historical costs,” which the international oil companies have been bearing since 2017 on behalf of the government.
The launch of the East African Crude Oil Pipeline (EACOP) project has been deferred to next month, the Petroleum Authority of Uganda (PAU) has announced.
The much-awaited event which was initially scheduled for March 22, this year has been moved to April following the death of Tanzanian President, Dr John Magufuli.
East African Crude Oil Pipeline (EACOP)
In 2006, commercial quantities of oil were confirmed to exist in the Lake Albert basin in Uganda. The Oil companies in Uganda; CNOOC LTD, TOTAL and TULLOW PLC completed the exploration phase. In November 2020 Total finalized the acquisition of Tullow’s entire interests in Uganda Lake Albert development project including the East African Crude Oil Pipeline in 2020. Total, now a majority shareholder and CNOOC are now headed into development phase, which will consequently lead to the production of Uganda’s oil resources.
Once produced, the crude oil will be partly refined in Uganda to supply the local market and partly exported to the international market. The export to the international market will be through an export crude oil pipeline; The East Africa Crude Oil Export Pipeline (EACOP). This pipeline will be constructed and operated through a Pipeline Company with shareholding from the Uganda National Oil Company, the Tanzania Petroleum Development Corporation and the two oil companies; TOTAL and CNOOC.