Insurers from Tanzania and Uganda have teamed up to form a consortium that will ensure that 5% of premiums are retained locally under local content in the East Africa Crude Oil Pipeline (Eacop).
This comes as actual construction of the Eacop is slated to begin in July, this year and first oil output is anticipated in 2025.
Uganda Association of Insurers (UAI) and Association of Tanzania Insurers (ATI) said that globally, oil firms would prefer to do everything offshore as many have their own insurance companies.
“The consortium will enable us to speak the same language. We insure oil and gas for the first time so we didn’t have enough necessary skills. The percentage agreed is 5% of retention and we will work closely together on this,” said the chairman for UAI, Mr Latimer Mukasa.
Upon completion in 2025, Eacop will be transporting 216,000 barrels of oil per day from Hoima in Uganda’s Lake Albert region to the Tanzania Indian ocean port of Tanga, spanning a distance of 1,443km.
TotalEnergies and China National Offshore Oil Corporation took the Final Investment Decision in February to invest $10 billion toward production and transportation infrastructure to drill, produce and commercialize Uganda’s oil.