Total to go ahead with $3.5bn EACOP pipeline despite Palma attack

EACOP routeEACOP, the $3.5bn East Africa Crude Oil Pipeline that will eventually transport crude oil from Uganda to the Tanzanian seaport of Tanga was given the go-ahead yesterday when Uganda’s President Yoweri Museveni and his Tanzanian counterpart Samia Hassan Suluhu signed off on the deal at a ceremony in Kampala. The project will be developed by Total’s subsidiary, although the announcement was slightly overshadowed by last month’s terror attack at the French oil giant’s Palma complex approximately 1,000 km down the coast from Tanga that saw scores of people murdered

The tripartite EACOP agreement paves the way for the construction of the 1,440 km crude oil pipeline from Uganda’s Albertine region to an export terminal at Tanga, and is an indication of Total’s commitment to expand its East African oil and gas concerns despite its ambitions to become a net-zero emissions business in Europe by 2050.

President Magufuli TanzaniaUganda discovered crude reserves in the Albertine rift basin in the west of the country near the border with the Democratic Republic of Congo in 2006. Government geologists estimate overall reserves at six billion barrels, but the start of commercial crude production has been repeatedly delayed by a lack of  the infrastructure needed to export the oil from landlocked Uganda and by disagreements over field development strategy. The signing was also further delayed by the death of Tanzania’s late President John Pombe Magufuli last month, but his demise has evidently not totally derailed the project as some commentators feared it might.

EACOP is seen as key to Uganda’s dreams of unlocking its oil sector and attracting inward investment. Despite anxiety over falling crude prices in recent years, the government in Kampala hopes that oil exports can help lift the East African country into upper middle-income status by 2040; annual per capita income in Uganda was less than $800 in 2019. Its signing was also a strategic win for Tanzania which will earn $12.7 off each barrel of oil transported through its territory. The pipeline is expected to have a daily capacity of 216,000 barrels of crude oil per day. If the pipeline were to run at full throttle, that would add 2% to Tanzania’s annual GDP.