PRESIDENT John Magufuli has said the impending construction of the Uganda–Tanzania Crude Oil Pipeline, marks an economic victory for the two countries and the entire East Africa region.
President Magufuli and his Ugandan counterpart, Yoweri Museveni yesterday finalised the processes for the commencement of the major 7.8tri/- project, also known as the East African crude oil pipeline, running from Ugandan oilfields in Hoima to the Tanzanian port of Tanga.
Once completed, the pipeline will be the longest heated crude oil pipeline in the world. The project will enable Tanzania to earn 7.5tri/- and create between 10,000 and 15,000 jobs over the next 25 years.
Speaking during the signing ceremony held at Chato Airport in Geita region, President Magufuli said it has taken a long time to strike the deal due to the sensitivity of the project.
He said the two sides had been in negotiations for years and was pleased that they have finally come to a consensus.
“Today we mark the economic victory, we have won yet another war,” he said as he thanked President Museveni for standing firm to ensure smooth execution of all plans.
Dr Magufuli said the two sides have agreed for Tanzania to get 60 per cent and Uganda 40 per cent of the revenues from the business upon completion of the project. So far Uganda has proven crude oil reserves of 6.5 billion barrels from only 40 per cent of the explored basin.
On the protracted deal, Dr Magufuli said: “We had a long time negotiation on how our countries would benefit from this business… today my brother has agreed for Tanzania to take 60 per cent and Uganda will take 40 per cent.”
Dr Magufuli therefore showered praise on President Museveni for his commitment and resolve to ensure the multi-billion project comes to fruition.
“My brother here is a good man, I ask Ugandans to embrace him. He’s a visionary leader. He asked me to come with a facemask because of Covid-19, I told him to even bring a blanket if he could,” said Dr Magufuli with a light touch.
He added: “I tried to convince my brother, His Excellence Museveni to agree on 60 per cent because 80 per cent of the pipeline is running into our country, so we will be responsible for many things including fixing it in case of any leakage.”
The 1445-km long pipeline will run through Tanzanian soil by 80 per cent on which, eight regions, 24 districts and 280 villages will be covered in the project.
Being the longest heated pipeline in the world, Dr Magufuli said the historical project will open up the East African region to the World by attracting big investments that are linked to the businesses.
“This project will help to expunge the notion that Africa is just for hunger and internal wrangles, it will create a good image of Africa and in particular East Africa by bringing investors and making the World pay attention to what is happening,” he said.
The Head of State said the striking of the deal means a lot to the two governments and that it is another big victory in the history of Tanzania and Uganda after that of 1979, when Tanzania People’s Defence Forces (TPDF) in collaboration with Uganda National Liberation Front (UNLF) removed Dictator Idd Amin from power.
President Magufuli said the signing of the agreement marks the commencement of the project, adding that 90,000 people, whose areas will be covered in the project, have already been identified for compensation.
Dr Magufuli said all have been registered and that 21bn/- have already been allocated for compensation.
The pipeline will also enable the construction of 14 stations and a total of 9.9bn/- have been allocated for compensating people whose areas will be covered. The project will cover Kagera, Geita and Shinyanga, Tabora, Singida, Dodoma, Manyara and Tanga regions.
He added that the project is set to generate 10,000 direct employment and thousands of indirect employment opportunities in the country.
On oil exploration in Tanzania, Dr Magufuli said Uganda successfully explored and discovered oil in Hoima by using its own experts. He said Tanzania has already embarked on oil exploration in Eyasi Wembere basin.
In October, last year, the Tanzania Petroleum Development Corporation (TPDC) said it had embarked on the exploration process. It stated that the exploration would involve drilling of three oil wells with 300 metres depth each in Eyasi Wembere basin.
One of the wells would be drilled at Kining'inila Village in Igunga District and the remaining two will be drilled at Meatu in Simiyu region and Iramba in Singida region.
Yesterday, President Magufuli insisted that Uganda has set a good example for other East African countries to engage in exploration.
“We are already engaged in the exploration by using the same experts from Uganda. Who knew that we could explore oil in this region, I would like to congratulate President Museveni and the people of Uganda for this big achievement, and for us, if discovered it would be easier to deal with this business because the infrastructures are already in place,” he noted.
Moreover, the Head of State assured Ugandans that Tanzania will not hesitate to sell them natural gas and that the gas pipeline to Uganda could be constructed along the crude oil pipeline.
The agreement on the pipeline construction comes days after French Oil Company Total said it had reached an agreement with Uganda protecting its rights and obligations in the pipeline's construction and operation – known as the host government agreement.
Total is the major shareholder in Uganda’s oil fields after agreeing in April to buy Tullow Oil's entire stake in the jointly held onshore fields in Uganda for 575m US dollar. The other partner in the project is China's CNOOC.