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Museveni, Magufuli Ink Deal to Expedite Oil Pipeline Project

President Museveni and his Tanzanian counterpart, John Pombe Magufuli, have this Sunday signed the implementation agreement for the East African Crude Oil Pipeline.

During a ceremony held in Chato, Tanzania, both parties agreed to address pending legal and technical issues to expedite works on the $3.5bn project.

According to the joint communique issued today, it was agreed that, “Each state party expeditiously concludes the Host Government Agreement with the East African Crude Oil Pipeline Project Company.”

Both leaders agreed that, “Each state party commences negotiations of all pending project agreements with immediate effect.”

Reports indicate Uganda and Tanzania agreed on a 40:60 profit sharing formula, a consensus realized on the basis of 70 per cent of the pipeline running through Tanzania’s territory.

The Ugandan government is yet to issue a statement on this development.

Museveni’s trip came just two days after  Government of Uganda and French oil company, Total, concluded and signed the Host Government Agreement (HGA) for the Oil Pipeline project.

The oil pipeline will start in Buseruka sub-county, Hoima District, and run for 1,445km to the Tanzania port city of Tanga.

Magufuli welcomes Ugandan officials Amb Richard Kabonero (second right) and Attorney General William Byaruhanga among others in Tanzania

The heads of state today said they noted positive progress made towards the conclusion of harmonisation of cross cutting issues thus paving way for finalisation of project agreements such as the Host Government Agreements, Shareholding Agreements, Land Lease Agreement and Port Concession Agreement.

The leaders also underscored the need to foster the welfare of the people of their respective countries in accomplishing the East African Community Integration as was conceived by the founding fathers of the two nations.

In order to implement the Intergovernmental Agreement, each State Party has to execute a separate Host Government Agreement for the purpose amongst other things to implement principles said in the Intergovernmental Agreement which would  be executed between each State Party and East African Crude Oil Pipeline Project Company which is to be incorporated.

Museveni (L) in talks with Magufuli

Benefits

Both countries stand to benefit from the project which is expected to employ more than 10,000 workers  from each district the pipeline passes from Hoima in Western Uganda to Port Tanga in Tanzania.

The project also is expected to improve the development of local capacity through technology transfer, boost infrastructure through the construction of new access roads and bridges and attract more investors in the budding sector.

Experts say Tanga port will experience more than $600 million direct investments in establishing new jetty, storage tanks, and supporting facilities.

President Museveni on Friday said proceeds from oil will be used to further develop the country’s other important sectors like infrastructure, education and health.

“Our oil will be used to develop our infrastructure, and ICT to enhance durable capacity of our country,” said President Museveni.

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