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Uganda’s energy minister and her Tanzanian counterpart revealed that they have referred “contentious” clauses in the document that spells out the rights and obligations of the parties in proposed oil pipeline to their respective heads of state before a final agreement between all parties is reached.

Tanzania, and the oil companies should have signed the host government agreement by now, but sources familiar with the negotiations tell this website a conclusion is far from reach.

Irene Muloni, Uganda’s energy minister, told journalist at the closing of an inter-ministerial committee on the pipeline negotiations that there has been some intense haggling over the agreement, which explains the delays.
Some of the contentious clauses regarding matters of arbitration, concessions, and taxes whose details are still being negotiated.
Teams from the two countries drawn from their lands, justice, energy, and finance ministries have been meeting in Kampala to harmonize clauses in the agreement. Officials described the negotiations as the “last leg” of discussions.
Once Uganda and Tanzania sign the agreement, the joint venture partners—Total E&P, CNOOC, and Tullow Oil—are also expected to sign, most likely later this year.

Signing the agreement is a precursor to other key agreements like the project financing agreement, the shareholders agreement, the transportation agreement, and the establishment of a pipeline company.
Additionally, the host sharing agreement should be signed before a final investment decision on the East African Crude Oil Pipeline is made.

Ms Muloni and Mr Medard Kalemani, Tanzania’s Minister of Energy, said the agreement is most likely to be signed before June.
The ministers said conclusion of all agreements will lead to the engineering, procurement and construction stage of the pipeline, which they said is likely to happen in mid-2020. Construction of the pipeline is expected to take a total of 36 months.
Officially, Uganda is looking at 2021 or thereabouts to start commercial oil production. But industry sources say that date is wildly optimistic and expect production to start in 2023 or 2024.
    
IPSK expert opinion
One of the many reasons why pipeline negotiations are delayed is because cross-border pipelines have a long history, especially where transit is involved, of vulnerability to disruption and conflict. Negotiating and building the pipeline is the easy part, the hard part comes in once the pipeline is in place. A recent example is the Russia and Ukraine 2009 conflict that left member states cut off for 2 weeks during a brutal winter. Both Uganda and Tanzania have to tread carefully and cushion themselves against any disputes that would arise causing a distribution cut off in the future.

Cross-border conflicts have become harder to resolve because these countries have incompatible legal and regulatory regimes that need to be reconciled carefully; an example is the Iraq Petroleum Company (IPC) line and Syria. Or economic issues, ranging from failure to agree on the terms of transit and on profit and rent sharing to issues regarding the obsolescing bargain. Uganda as well as Tanzania has to cushion Herself against any vulnerabilities to potential disruptions and gaining of any political leverage.

Therefore both countries have to tread carefully lest these negotiations take the Bolivian Chilean route (plans to run a gas export pipeline from Bolivia to the Chilean coast have fallen foul because of a dispute from the 19th century).

 

 

 

 

Entebbe, Uganda | THE INDEPENDENT | Uganda took a firm step to building its first oil refinery when officials signed a Project Framework Agreement with the Albertine Graben Refinery Consortium (AGRC) in Entebbe on Tuesday. The agreement will ensure development, design, financing, construction, operation and maintenance of the oil refinery in Hoima District. The project will cost $3 billion-$4 billion. The AGRC comprises YAATRA Africa (Mauritius), Lionworks Group Limited (Mauritius), Nuovo Pignone International SRL (a General Electric Company located in Italy) and SAIPEM SPA (Italy).

Uganda is represented in the consortium by the Uganda National Oil Company (UNOC), which is a limited liability petroleum company owned by the government.

After the signing, President Yoweri Museveni challenged Western companies to take interest in helping Africa explore its resources potential, saying the continent presented immense business opportunities.

“There is a lot of sleeping in Africa. You find people who should know but instead don’t know,” said the Ugandan President. “And also there has been sleeping in the West, they don’t care about what potential is in Africa.”

Museveni said unlike China which seems to understand Africa’s potential and has been active in doing business with Africa, Western companies have been reluctant in taking up projects and investing in the continent.

“Africa is going to be a huge power house in terms of business,” said the President, who noted that African leaders and the NRM government in particular have resolved some of the obstacles to doing business like fragmented markets and confiscation of private companies by past regimes.

While congratulating the parties to the agreement, President Museveni said the composition of the AGRC showed that Western companies were also waking up to realise Africa’s potential.

“Africa and the West share a lot of history together and there is a need for them to use these past linkages to further economic business,” said the President.

Muloni hails Museveni

The Energy Minister, Eng. Irene Muloni, said the signing ceremony marked the end of the selection process that commenced in January 2017.

She said her ministry had done extensive consultations before arriving at who to assign the project, estimated to cost between $3-4 billion.

Eng Muloni saluted President Museveni for the guidance provided throughout the entire process.

In her remarks, Dr Josephine Wapakhabulo, the chief executive officer, of the Uganda National Oil Company, said the development of the refinery will trigger a number of other investments in the energy-based industries, contributing to economic development and attainment of middle income status.

She added that the refinery will grow UNOC’s business portfolio and help unlock other planned investments at the Kabaale Industrial Park.

The Italian Ambassador, Domenico Fornara, commended President Museveni for his counsel, saying the project would enhance Uganda-Italy business relations.

Ambassador Deborah Malac of the US, congratulated the government upon conclusion of the selection process, saying she hoped more business opportunities would emerge for American companies after this project.

SOURCE PPU

The International Monetary Fund (IMF) recently stated that the oil reserves in Uganda may account for around four percent of the country’s economy annually in the next few years if managed well.

  Irene Muloni (R), the Minister of Energy and Mineral Development and Roger Cressey, the CEO Armour Energy display a Memorandum of Understanding certificate after signing the oil exploration licence on Sept. 14. INDEPENDENT/JIMMY SIYA

Kampala, Uganda | RONALD MUSOKE | On Sep 14, the Ugandan government signed a production sharing agreement with the Australian Armour Energy Ltd and issued a petroleum exploration licence, the first under the competitive licensing round for oil and gas unveiled two years ago.

Yoweri  Wednesday, 06 September 2017 10:50AM

The governments of Uganda and Equatorial Guinea have agreed on a joint action plan for the development of both the country’s oil and gas infrastructure

The governments have agreed upon the action plan during a four-day visit of Yoweri Museveni, the president of Uganda, to Equatorial Guinea in the last week of August 2017, according to the KFM.

Under the agreement, the priority activities will include exchange of information on government policies, regulatory structures, capacity building in the areas of operation, production and process control and environmental health and safety, reported the source.

Image result for opec28 Sep 2017 

Uganda will seek to join OPEC once the East African nation starts pumping crude out from Lake Albert oil fields along the western border with the Democratic Republic of Congo at the end of the decade, Uganda's energy and minerals minister Irene Muloni said Wednesday. The Ugandan government took the decision to join OPEC after consultations with other existing member states, including Equatorial Guinea, Muloni told an oil and gas conference in Kampala.

"When we start producing our oil, we will join OPEC, to reap the benefits from being a member of the organization, these include stability of prices," she said. "We remain on course to deliver first oil in 2020."

The Petroleum Authority of Uganda (PAU) has invited the registration of new suppliers to the country’s oil and gas industry by publishing guidelines for the 2018 registration on the supply of goods and services.