President Yoweri Museveni of Uganda and Samia Suluhu Hassan of Tanzania today signed a Tripartite agreement that pave way for commencement of the East African Crude Oil Pipeline Project (EACOP).
Samia Suluhu Hassan, came on invitation from President Yoweri Kaguta Museveni, to attend and witness the signing ceremony of the Host Government Agreement between the Government of the Republic of Uganda and the EACOP Company. The agreements were signed at State House, Entebbe Uganda.
The agreement is premised on the commitments made by His Excellency the late Dr.
John Pombe Joseph Magufuli and Yoweri Kaguta Museveni’s meeting at Chato, Geita Tanzania on 13th September 2020, that; each State Party to conclude the Host Government Agreement with EACOP Project where the two agreed to commence negotiations of all pending Project Agreements with immediate effect and expedite the implementation of the EACOP Project.
The two principals recognized that the Shareholding Agreement (SHA) has also been signed by all the stakeholders including Total France, and reiterated their commitment and realization of the EACOP Project for the benefit of the People of both countries in the spirit of East African Cooperation.
The Governments of the Republic of Uganda and the United Republic of Tanzania signed the Intergovernmental Agreement (IGA) on the implementation of the East African Crude Oil Pipeline (EACOP) Project on 26th May 2017 to transport Crude Oil from Hoima in Uganda to the port of Tanga in Tanzania.
At the ceremony, the two Heads of State observed a minute of silence on the passing on of the former Tanzanian president, late Dr. John Pombe Joseph Magufuli and hailed his immense contribution in working towards the cause of the East African Community; fostering and nurturing bilateral relations and cooperation between the two countries and in providing an unequivocal support and commitment to the realization and implementation of the strategic East African Crude Oil Pipeline (EACOP) Project.
President Museveni’s speech:
Your Excellency, Samia Hassan and your distinguished delegation. You are most welcome to your brother country of Uganda. Again, condolences on account of the death, recently, of our brother H.E. Magufuli. Also congratulations on your inauguration as President of the United Republic of Tanzania. Thank you for responding to my invitation to join us and the Total Company of France to sign the Agreement on the East African Pipeline from Hoima to Tanga.
Your brother country of Uganda, discovered petroleum and gas in 2006. It has taken these 15 years before the first oil, on account of the divergent perceptions between us and the oil companies. Initially, I did not favour the idea of the pipeline. My
question was: “Why export the oil. Don’t the East Africans need the oil?” In this thinking, I preferred an Oil Refinery only, so that we use the extractable oil out of 6.5 billion barrels confirmed in only 20% of the potential area in the Mwitanzigye and Butuumbi valleys (known as the Albertine Grabben by the foreigners), to satisfy the demand for the refined products for Uganda, North Western Tanzania, Western Kenya, Rwanda, Burundi, Eastern Congo, South Sudan and South Western Ethiopia, with cheaper products on account of the lower transport costs.
The demand in this zone is now 98,250barrels per day. Uganda’s demand is currently 38,785 barrels per day. At the price of US$50 per barrel (equivalent to about US$63 per barrel of products), this locally refined petroleum, would knock off US$1.22billion from Uganda’s import expenditure for petrol, diesel, aviation fuel and tar for roads. If you include the petroleum bye-products, such as plastics, the
saving on the import bill would add another US$400millions. Using the extractable portion of the
6.5billion barrels confirmed, this would ensure petroleum self-sufficiency for the Lake Victoria
Basin Countries and those neighbouring them for a period of 38 years based on the present
consumption levels.
This Oil Refinery would be owned jointly by the East African Governments, if
they agreed to participate. The oil companies, however, were biased in favour of exporting crude oil only. The compromise, then, was: “Ok, let us have both the Refinery and the
Pipeline.” Most of this, was when the Tanzanian route was not in the picture. We were still debating
about Mombasa and Lamu of Kenya. When the Tanzanian route of Tanga became more viable, a new consideration entered my mind ─ the historical role of Tanzania in the liberation of Uganda in both
1978/79 and 1985/86.
On these two occasions, Mwalimu Nyerere played a very important role. In the 1978/79, TPDF played the major role in removing Idi Amin from power. In 1985/86, Mwalimu Nyerere gave us 5000 rifles at the right time, just before the assault on Kampala, starting on the 17th of January, 1986.
Kenya, of course, is a brother country, just like Tanzania. However, historically, there is this unique
role of Tanzania. I am, therefore, most satisfied, that the project will make a modest contribution to the development of Tanzania. It cannot compensate for the huge sacrifice Tanzania made for the defeat of Idi Amin and the liberation of the whole of Southern Africa (Mozambique, Zimbabwe, Angola, Namibia and South Africa). It is just a modest contribution.
Moreover, this pipeline project, can be a core of bigger developments if the brothers in Congo Kinshasa and South Sudan choose to also use it for their oil. At the maximum, it can carry 230,000
barrels per day. Besides, the same corridor, can take a return gas pipeline, supplying Tanzanian and
Mozambiquan gas to Uganda and the Great Lakes’ region.
I salute the Government of Tanzania for the tax concessions they made to keep the tariff paid by the
owners of the oil to be limited to US$12.77 per barrel. Recently, we also made concessions regarding the land and port charges. This will, in effect, push the tariff to US$13.03 per barrel.
The Lamu route was proposing US$15.8 per barrel as tariff. All this, is on account of the extractable portion of the 6.5billion barrels confirmed and licenced for production as already pointed out. This is, however, only in 20% of the Mwitanzigye-Butuumbi basin (known to foreigners as the Albertine Grabben).
There is a high chance for more oil and gas to be found in the remaining 80% of the oil province,
especially in the Mwitanzigye area (such as Kibiro, Butyaba, etc). Then, there is a totally new hydrocarbon zone in the North East of the country, in the Mount Kadam basin. There are oil sippages on the surface, there are source rocks, reservoir rocks and trap rocks (accumulation rocks), that have been seen.
If the brother countries work together, there is, then, the oil in Congo and South Sudan. This
pipeline could turn out to be a very important project that may serve the region, not only in the
short term but also in the medium, if not in the longterm.
This project should, in addition to what we have said, serve to awaken all Africans that prosperity
and strategic security, are only possible if we use the Pan-Africanist approach that gives us a bigger
market and rationalizes economic linkages. I cannot end these brief remarks without thanking
Her Excellency Samia Hassan for indulging my sentimental request of conducting this signing
ceremony on the 11th of April, 2021. Forty two (42) years ago, this same day, is when the Tanzanian
troops of 20 Division captured Kampala and enabled a Ugandan Army officer, Oyite Ojok, to announce
the fall of Idi Amin on Radio Uganda. At that very moment, with my rapidly growing Fronasa troops,
operating with another TPDF division, the Task Force division under Major-General Silas Mayunga,
I was on the Mbarara Front. 20 Division was under General Munguri. Today, therefore, is a triple victory for Tanzania and Uganda: military, political and economic.
Long live Tanzania, Long live Uganda, Long live President Hassan.