Uganda has approved a construction license application by a company controlled by TotalEnergies of France to build a $3.5 billion oil pipeline to carry the country’s crude to foreign markets.
The construction license approval is an important step in developing the East African country’s oilfields, where commercial production has been delayed for over two decades due to a lack of infrastructure and conflicts between the government and oil corporations.
The application by the East African Crude Oil Pipeline Company Ltd (EACOP) to build the pipeline was accepted by the cabinet at its meeting on Monday, according to Godfrey Kabbyanga, the state minister for information, in a statement on Thursday.
With a 62% interest in EACOP, TotalEnergies is the largest shareholder. Other investors include the Uganda National Oil Company and Tanzania Petroleum Development Corporation, both of which have 15% stakes, and China’s CNOOC which has 8%.
The pipeline will extend 1,445 kilometres from landlocked Uganda’s oilfields in the country’s west to a port on Tanzania’s Indian Ocean coast.
Environmentalists and human rights campaigners have launched a campaign against the project, which they claim will displace tens of thousands of people and harm the region’s fragile ecosystems.
Uganda discovered crude oil reserves near the DRC border in 2006, but arguments between the government and oil companies over taxation and development strategy have hindered efforts to develop them.
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