Uganda-Tanzania pipeline deal

Foreign oil firms will construct a £2.5bn pipeline to transport crude from landlocked Uganda to Tanzanian seaport

Photo from eacop.com.

— 1 minute read — By Sam Portillo

The governments of Uganda and Tanzania in East Africa have given the green light to French and Chinese oil firms to construct a 900 mile pipeline, transporting recently-found crude reserves from the landlocked country to the international markets.

Uganda discovered crude reserves in the west of the country in 2006. Government scientists later estimated that the Albertine rift basin, where it was found, contained a total of 6 billion barrels of oil, equivalent to £250bn in today’s market.

British firm Tullow closed business in the country last year, allowing Chinese firm CNOOC and French firm Total to step in. The proposed East African Crude Oil Pipeline would stretch 898 miles, taking the oil from western Uganda out to a seaport on the Tanzanian coast. While the lion’s share of oil will be exported abroad for profits, some will be processed in Uganda for domestic use.

“It’s a very large project, one of the largest we should develop on this continent,” Total’s CEO said, with the companies also announcing that they expert the pipeline to be operational from 2025.

The construction will likely cost upwards of £7bn, with CNOOC and Total taking loans from major banks in order to complete the ambitious project.

Over 200 organisations from around the world have urged the banks not to provide further funding to the project, citing environmental concerns such as the disruption of wildlife reserves and contamination of Lake Victoria.