Left Menu
Development News Edition

Uganda ready to pay higher tariff for use of crude oil pipeline through Tanzania

Devdiscourse News Desk | Kampala | Updated: 15-05-2019 21:40 IST | Created: 15-05-2019 21:40 IST
Uganda ready to pay higher tariff for use of crude oil pipeline through Tanzania
The government of Uganda has agreed to augment the tariff to USD 12.77 per barrel after further talks with the investors, Energy Minister Irene Muloni said in a statement on May 14. Image Credit: Pixabay

Although Uganda discovered the vast oil reserves a decade ago, the landlocked country has now agreed to pay a higher tariff to use a pipeline planned to run through its neighbouring country Tanzania. This enhances the prospects of a project vital for Uganda's nascent petroleum industry.

In 2016, Uganda picked a route for a pipeline through neighbouring Tanzania to the Indian Ocean port of Tanga to help export its crude. At a length of 1,445 kilometres, the project will cost USD 3.5 billion and has been described as the planet's longest electrically-heated pipeline.

Initially, Uganda said it had agreed with investors and Tanzania that it would pay a tariff of USD 12.2 for each barrel of crude shipped through the pipeline. But the investors, which include France's Total, later demanded a higher tariff, according to the Ugandan officials, stalling negotiations over the project.

The government of Uganda has agreed to augment the tariff to USD 12.77 per barrel after further talks with the investors, Energy Minister Irene Muloni said in a statement on May 14.

Total, China's CNOOC, and Britain's Tullow Oil jointly own the Ugandan fields and are also eyeing varying stakes in the pipeline. About two-thirds of the project's cost will be financed by debt and a Ugandan unit of South Africa's Standard Bank Group and Japan's Sumitomo Mitsui Banking Corp are jointly helping raise the credit.

Uganda discovered crude reserves, estimated at 6 billion barrels, more than ten years ago in fields near the border with the Democratic Republic of Congo. The start of commercial production, which has been repeatedly delayed due to the lack of essential infrastructure such as an export pipeline, is now expected in 2022.

Irene Muloni also opined some preliminary surveys in a new basin in Uganda's Karamoja region, a semi-arid area on the border with Kenya, had shown traces of oil. "The ministry is conducting geological, geochemical and geophysical mapping in Moroto-Kadam basin. Work done so far shows evidence of possible presence of a working petroleum system as demonstrated by the encountered oil seep," she added.

Also Read: German Delegation AHK unveils Dual Vocational Training System in Kenya


TRENDING

OPINION / BLOG / INTERVIEW

Rethinking Rural Livelihoods in the Times of COVID-19

The reverse migration caused by COVID 19 pandemic has put an additional burden of about one crore people on Indian villages particularly in the states of Uttar Pradesh, Bihar, Bengal and Odisha. Besides increasing the risk of spreading the ...

‘Discounted Deaths’ and COVID 19: Anthropology of Death and Emotions

Death is a social event rather than the mere cessation of biological functions. As seen by anthropologists, death is not just physical but intensely social, cultural, and political....

Indigenous knowledge of communities a must for maximizing impact of community work

Generally, it has been observed that the majority of the academicians in higher education institutions neglect the wisdom of community people and throw their weight around thinking that they know everything and the community knows nothing. ...

In rebuking FBR, Pakistan’s courts take a stand for public health

The system, if implemented effectively, will allow Pakistans revenue service to combat the illicit trade in tobacco products and potentially add hundreds of millions of dollars to the states budget each year. ...

Videos

Latest News

Duterte's 'draconian' anti-terror bill alarms activists in Philippines

Lawyers and human rights activists in the Philippines have raised the alarm over a new anti-terrorism bill pushed by the President Rodrigo Duterte, warning of draconian and arbitrary provisions that could be abused to target his detractors....

Austria presents design turning Hitler's birthplace into police station

Austria presented an architectural plan on Tuesday to turn the house where Adolf Hitler was born into a police station in the hope of neutralising the space and ensuring it does not attract neo-Nazis. After decades of debate about what to d...

Now Bangladesh has belief of winning every match, says Tamim Iqbal

Bangladesh opening batsman Tamim Iqbal has said that the entire side now has the belief of winning every match and even the fans of Bangla Tigers know about the quality of their side. Iqbal also said that earlier the side used to know what ...

Migrant workers face bleak future back home

Shravan Das, back home in Nagaur district after the lockdown, is worried. He has a family of six to take care of and there are no jobs in sight. Its a big crisis. I dont know what will happen in the future, he says, reflecting the state of ...

Give Feedback