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Tanzania, Uganda Sign Sh400 Billion Oil Deal in President Suluhu’s First Official Visit

From left Tanzania's Head of State Samia Suluhu and her Ugandan counterpart Yoweri Museveni in Kampala on Sunday, April 11, 2021 [Photo/Courtesy]

Uganda and Tanzania on Sunday, April 11 signed a deal to build East Africa’s first major oil pipeline.

The deal to build a 1,445km, $3.5 billion (Sh375 billion) crude oil pipeline was signed during Tanzania President Samia Suluhu’s first official visit to Uganda.

Also present were Uganda and Tanzania’s Ministers of Energy, the President Total
Africa and the Head East African Crude Oil Pipeline (EACOP).

President Suluhu, who was recently sworn in to replace the late President John Pombe Magufuli, said the signing of the multi-billion deal is a historic and an important occasion not only for the nations of Uganda and Tanzania but for the entire East African Community (EAC).

“This project will have an impact on the social-economic development of the East African community. It will provide long and short-term employment opportunities to various citizens,” she said.

Read: President Suluhu To Set up Covid-19 Taskforce, Reopens Banned Media Houses



On his part, Museveni said the Crude Oil pipeline project can be a core of other similar pipeline operations in the region.

“We can use the same pipeline corridor to have a return gas pipeline to supply Tanzania and Mozambique gas to Uganda,” said President Museveni.

“Our Ugandans are getting a bit modernized now. They are using gas, cooking with firewood is not a good idea.”

The deal was due for signing on March 22 but the exercise was delayed following the demise of President Magufuli on March 17.

Read Also: Kenya At Loggerheads With Uganda Over Pharmaceutical, Beer Taxes

Uganda discovered commercial oil deposits in its mid-western region over 14 years ago but extraction delayed due to the protracted negotiations with the oil majors.

With the deal with the government of Tanzania and the French oil giant, production is set to kick off.

A similar deal that would have seen the pipeline routed through Kenya failed in 2016 after Ugandan authorities chose Tanzania over our country.

While choosing the Tanzania route, Uganda cited security and cost concerns.

Read Also: Who is Samia Suluhu? Tanzania’s Next First Female President

In their negotiations with Kenyan counterparts, Ugandan officials had suggested a shorter route through Nairobi, but it failed because it would have required displacements in settled areas.

The officials were concerned that if the pipeline was built through Lokichar to the Lamu Port, the construction would be delayed by land settlement cases.

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Written by Wycliffe Nyamasege

Passionate digital Journalist with a bias for political and current affairs stories.
Email news@kahawatungu.com

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