Uganda signs key oil pipeline agreement with Total

The Ugandan government and Total have signed the Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) project.

The ceremony took place on Friday afternoon at State House Entebbe and was presided over by President Museveni, and witnessed by  Patrick Pouyanne, the Chairman and Chief Executive Officer of Total.

The Minister of Energy and Mineral Development, Mary-Gorett Kitutu, signed on behalf of Uganda while Nicolas Terraz, the Total Exploration and Production President for Africa, signed on behalf of his employer.

The Signing of the HGA signifies that the oil companies (represented by Total) and government have reached an agreement on the commercial framework for the Lake Albert Development Project.

It also represents significant progress towards achieving the Final Investment Decision which is expected by the end of this year.

Speaking shortly after the signing ceremony, President Museveni said Uganda is a very peaceful and attractive investment destination.

He said proceeds from oil will be used to further develop the country’s other important sectors like infrastructure, education and health.

“Our oil will be used to develop our infrastructure, and ICT to enhance durable capacity of our country,”Museveni said.

“I am glad that Total and other companies licenced in the country are taking bold steps to quickly commence the production of petroleum,” President Museveni said.

Museveni reassured the exploration company of government’s support during their work.

“It has taken long, but it was a deliberate move, I can assure you Ugandans," said the President, adding that Uganda is a rich country with oil as a small fraction of this natural wealth.

He pointed out that other potential lies in Agriculture, Tourism, Services, and Human Resource among others.

The President promised to get in touch with his Tanzanian counterpart, John Pombe Magufuli, to resolve other pending issues, especially concluding the Host Government Agreement in Tanzania.

“I congratulate Total and our Ugandan team on this milestone. We have been slow but steady and sure,” the President said.

Minister Kitutu said once the final investment decision is made by the oil companies, the opportunities for investment in the country will grow exponentially and give a boost to the economy.

She later said local companies should take advantage of this agreement to tap into opportunities in the oil sector.

Total CEO Pouyanne said this is a great achievement between the Total and the Government of Uganda.

“It was a bumpy road but I am glad we have overcome the challenges. I thank the teams from both sides that have worked tirelessly,” he said.

He commended the Ugandan President for his leadership and promised that the project would be executed successfully.

The function was attended by among others the Attorney General, Mr. William Byaruhanga.

Other agreements

Also signed between government and Total in relation to the Uganda National Oil Company  was the Deed of Assignment in Relation to the Block 1, 2 and 3A Production Sharing Agreements and the Deed of Novation and Amendment with the Uganda National Oil Company in relation to the Joint Operating Agreement in respect of Exploration Areas 1, 2 and 3A

The East Africa Crude Oil Pipeline will start in Buseruka sub-county, Hoima District, and run for 1,445km to the Tanzania port city of Tanga.

When complete, it will be the world's longest heated oil pipeline.