Government agencies in Uganda are courting parliament to fast track the enactment of the East African Crude Oil Pipeline (EACOP) (Special Provisions) Bill 2021 to anchor and commercialization its oil fields.
The Bill’s First Reading in Parliament was held on 5 October 2021, before being referred to Environment and Natural Resources Committee (ENRC) for processing over 45 days.
The Minister for Energy and Mineral Development in Uganda, Dr. Ruth Nankabirwa Ssentamu, called on the parliamentary Committee to expeditiously handle the Bill saying that the National Development Plan III identified the Petroleum Sector as an anchor for transforming the economy through revenue generation, infrastructure development and job creation.
“The country has been eagerly waiting for Uganda to achieve its first oil, and we have fulfilled most of the requirements. The ball is now with Parliament to ensure the enactment of the EACOP Bill expeditiously,” said the Minister.
EACOP law will domesticate an existing treaty between Uganda and Tanzania before the EACOP Company embarked on pipeline construction. The law will also operationalize the business venture for Uganda, Tanzania and other project partners.
“The law will kick-start the commercialization of Uganda’s oil and gas resources and facilitate the upstream partners to take the long-awaited Final Investment Decision and progress the development of the Petroleum sector,” Ugandan Attorney General, Kiryowa Kiwanuka, said.
The first oil drop from the Albertine Grabben belt is expected to flow in 2025 following the launch of project works of the US$ 3.5 billion East African Crude Oil Pipeline (EACOP) project. The crude oil pipeline runs from Hoima in Uganda to Tanga in Tanzania, Indian Ocean.
This was disclosed in a symposium held last weekend at the Julius Nyerere International Convention Centre in Dar es Salaam to increase private sector awareness of the legal, policy, and regulatory frameworks for oil and gas projects in Uganda and Tanzania and create synergies and areas of cooperation between private sector companies in the two countries.
The signing of the Key Project Agreements has already been achieved. The Inter-Governmental Agreement (IGA) between Tanzania and Uganda provides the intention and commitment to undertake the project.
The Host Government Agreements between the project company and each government sets the required fiscal and legal regime for implementing the project. There is also the Shareholders’ Agreement which provides for how the project will be executed.
Physical works begun on 5 November 2021 and the project was handed over to a Tanzanian contractor, Milembe Consult, to start Early Civil Works (ECW). The Contractor has started the mobilization of materials, machinery and preparation of working camps for commencement of the work.
The ECW includes the clearance, leveling, and fencing of the priority areas in Bukombe, Sojo-Nzega and Igunga. The ECW work is expected to be completed within six (6) months from 5th November 2021.
The Government of Tanzania has conducted project awareness campaigns in all eight regions of: Kagera, Geita, Shinyanga, Tabora, Singida, Dodoma, Manyara and Tanga.
The EACOP project is expected to create over 5,000 jobs directly and over 20,000 others indirectly. Uganda has already secured five acres of land at Tanga in Tanzania to set up a business complex to monitor the country’s expected oil cash inflow from petroleum exports.
Uganda has lined up pipeline suppliers and land acquisition processes in Tanzania. About 80 percent of the construction work of the 1,443 km long pipeline will be done in Tanzania, and it’s government’s expectation is to see a good number of local entrepreneurs take part in the project.