The development is a major boost for Uganda’s oil industry which has not been able to achieve commercial production since oil discoveries were made 14 years ago partly because of a lack of infrastructure, such as an export pipeline.
Uganda has proven oil reserves exceeding 6.5 billion barrels, of which about 2.2 billion barrels are recoverable.
The country plans to build a refinery in the Western Region to meet local and regional demand, with the rest exported via pipeline to the Indian Ocean coast.
The 1,445-km (900-mile) East African Crude Oil Pipeline, costing $3.5 billion, would pass through neighboring Tanzania to the Indian Ocean port of Tanga.
Once completed, the East African Crude Oil Pipeline will be the longest heated crude oil pipeline in the world.
“We have today reached major milestones which pave the way to the Final Investment Decision in the coming months. We now look forward to concluding a similar HGA with Tanzania and to completing the tendering process for all major engineering, procurement and construction contracts.”Pierre Jessua- Managing Director of Total E&P Uganda
Concerns regarding security and cost, however, motivated parallel negotiations with Tanzania regarding a shorter and safer route to Port Tanga, with the support of the French petroleum conglomerate Total SA.