June 14, 2024

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Uganda’s Oil and Gas Sector Mourns President Magufuli

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Uganda’s oil and gas industry is mourning the passing of Tanzania President, John Pombe Magufuli, which was announced Wednesday night. Magufuli has been instrumental in the East African Crude Oil Pipeline Project and had said construction should start this month of March.

Uganda and Tanzania are jointly developing the Pipeline from Hoima in the western part of the country, to Tanga Port at the Tanzanian coast of the Indian Ocean. The 1,440km pipeline will be the precursor to oil production because it can not be got from the ground without storage facilities.

The commercial production of oil has been postponed several times since 2009 when the government promised the first drop of oil, amidst tax, legal and regulatory issues. In August 2015, Uganda and Kenya agreed to have the pipeline take the northern route from Hoima through Lochichar.

But in April 2016, Magufuli who was elected president in November 2015, convinced Uganda’s President Museveni to drop the Kenya deal and route the pipeline through Tanzania. Since then, Magufuli had been pushing Uganda and the oil companies to expedite the project, including reducing the amount of time that the pipeline should take to about 24 months instead of 36.

Last year, he told President Museveni to stop focusing on the ‘small money’ – referring to the tax standoffs which were delaying the final investment decisions – and instead move forwards faster towards commercial production. “We are late. We are still sleepy,” said Magufuli.

The Petroleum Authority of Uganda says Dr Magufuli’s astute leadership set a strong foundation for the East African Crude Oil Pipeline (EACOP) project. “Key milestones under his leadership included the signing of the Inter-Governmental Agreement in 2017 and the initialling of the Tanzania Host Government Agreement in 2020,” Ernest Rubondo, Executive Director, PAU said.

While they commiserate with the people of Tanzania over the death, Rubondo assured both Uganda and Tanzania that the pipeline project “is expected to continue successfully”.

The Final Investment Decision is expected to be made this month and construction of the pipeline later in the year for up to 36 months. It is hoped, President-designate Samia Suhulu will steer the country at the same pace or faster in playing it’s part in the pipeline project, as the late president.

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