Total has signed a $15 billion East Africa Crude Oil Project (EACOP) with Uganda and Tanzania, fifteen years after the former discovered commercially-viable crude oil deposits.
The 1,445-kilometre heated pipeline starts in Hoima in the Albertine Graben, western Uganda, and ends at Tanga Port in Tanzania. At peak production, it will transport 216,000 barrels of crude oil daily. Because of Uganda’s oil’s waxy nature, it will be one of the longest heated crude oil export pipelines in the world. Tanzania will earn $12.7 off each barrel of oil transported through it.
Total holds 57% of the oil field licenses and a large stake in the pipeline project. The deal is expected to unlock upwards of $15 billion in investments.
The EACOP is projected to cost around $3.5 billion, with about $2.5 billion being debt borrowed from banks and other financiers. At the same time, 30% of the project will be financed through equity from Total, CNOOC and the host governments’ entities: Tanzania Pipeline Development Company, and Uganda National Oil Company.
According to the Climate Policy Initiative, a UK-based research firm, Uganda’s oil deposits are estimated to have reduced in value from $61 billion in 2013 to $18 billion in 2018 due to a fall of crude oil prices on the world market.
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