{UAH} Uganda-Tanzania oil pipeline a done deal - Tanzania
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12:08 AM |
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PRESIDENT John Magufuli's office categorically asserted yesterday that the agreement entered between Tanzania and Uganda for the construction of a crude oil pipeline linking the two neighbouring countries is conclusive despite ongoing jostling by Kenya for the project.
He confirmed that executives from the French company Total, which has a large stake in the Ugandan oil fields, had assured President Magufuli the $4 billion needed to build the pipeline via a preferred southern route to the Tanzanian port of Tanga was already available.
Museveni and Kenyan president Uhuru Kenyatta are reported to have held talks in Nairobi on Monday about which route to choose for the pipeline that Kenya wants to go through its territory to Lamu port, instead of Tanga. But they did not reach any final deal.
A statement issued after Monday's talks said the two leaders would meet again in Kampala in a couple of weeks' time, after technical teams had further assessed factors such as security and which route would be cheaper and easier to build.
Britain's Tullow Oil company, which has stakes in both Ugandan and Kenyan oil fields, is reportedly pressing for the Kenyan route, saying it will be cheaper for Uganda as costs will be shared between more producers. China's CNOOC also has a stake in Ugandan oil.
Analysts said the dispute over the proposed oil pipeline route was straining relations in east Africa.
According to media reports from Kenya, a study by Tullow Oil and CNOOC which warned of possible delays in the completion of the oil pipeline if it went through a Kenyan route was at the centre of the talks between Kenyatta and Museveni on Monday.
Tullow Oil and CNOOC are reported to have carried out a research whose findings warned Uganda against going ahead with its original plan to use the Kenya route.
Sources said the study warned that, among other things, Kenya has a history of protracted land compensation disputes which could take years to resolve, thus further delaying the pipeline project.
The study also noted that the Lamu port in Kenya had not even been built yet, warning that it might not be completed by 2018 when Uganda expects to start exporting its crude oil.
On the other hand, Tanzania already has an established port in Tanga, which could be effectively expanded at a relatively faster speed to act as a hub for the export of Ugandan oil to international markets.
Experts said Tanzania also has experience in resolving land compensation issues quickly in order to make way for major projects, citing the successful construction of the Mtwara-Dar es Salaam natural gas pipeline and the recently-concluded land acquisition for a liquefied natural gas (LNG) plans in Lindi Region.
In Tanzania, ownership of land is vested in the president, which gives him powers to issue a decree and acquire land for the construction of projects such as the proposed pipeline.
In contrast, land in Kenya is not vested in the president, which means any pipeline construction project through that country would likely be complicated by potentially costly private land acquisition procedures
Brian M. Kwesiga
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