Works on the 1445-kilometre pipeline from Uganda to Tanzania have been suspended by Total S.A after it failed to buy a stake in Tullow Oil’s oil fields in Uganda.
This comes after Tullow Oil recently dropped plans to sell a stake in its Ugandan project to Total and China’s Cnooc Ltd., because they failed to agree on tax negotiations.
Uganda has oil reserves exceeding 6.5 billion barrels, of which about 2.2 billion barrels are recoverable, which prompted Tullow oil to find partners to help it develop about 1.5 billion barrels of recoverable oil in its Ugandan fields.
The 24-inch diameter pipeline was set to export 216,000 barrels of crude oil per day from Kabaale, northwest of Kampala, to Chongoleani peninsula, near Tanga port in Tanzania.
Commercial production of Ugandan crude oil has been delayed partly because of a lack of infrastructure, such as an export pipeline, despite the reserves having been discovered about thirteen years ago.
Total S.A. is a French multinational integrated oil and gas company, and one of the seven major oil companies in the world. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading.