Ugandan Parliament Passes East African Crude Oil Pipeline Law

Parliament in Uganda has passed the East African Crude Oil Pipeline (EACOP, Special provisions) bill into act of Parliament, now awaiting President Yoweri Museveni’s signature further bringing the country closer to its dream of achieving first oil by 2025.

The bill will facilitate the implementation of the East African Crude Oil Pipeline project in Uganda, domesticating an existing treaty between Uganda and Tanzania before the EACOP Company can embark on the pipeline construction.

In August this year, the Tanzania parliament passed the same law.

The 1,443km long pipeline running from Hoima in western Uganda to Tanga Port in Tanzania is a key infrastructure project for Uganda’s realisation of first oil and has four Joint Venture Partners, including Total Energies (62%), Uganda (15%), Tanzania (15%), and China’s CNOOC (8%).

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Uganda’s (UNOC) total financing requirement to EACOP is US$ 293 million and government has already advanced US$130 million for first cash call obligation.

The project is poised to cost about $3.5billion but still faces financing challenges after some European lenders who had expressed willingness to fund the project changed their mind.

When and if Museveni assents to it, the bill will facilitate certain provisions of the lnter-governmental Agreement (lGA) signed between Uganda and Tanzania and the Host Government Agreement (HGA) signed between Uganda & the East African Crude Oil Pipeline Company.

It will also fully implement the obligations of Uganda under the two agreements, kick starting the commercialisation of Uganda’s oil and gas resources.

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After the FID, the two oil companies Total and CNOOC will invest between $15 billion to $20 billion in the country’s oil sector for the next five years.

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