Page 6 - DMEA Week 36

DMEA CommentAry DMEA
Will Tanzania’s loss be Kenya’s gain?
Nairobi’s talk about working with Uganda to build an oil export pipeline is not likely to lead to much concrete action
AfriCA
WhAt:
Kenya is willing to work with Uganda to build a pipe that will pump crude oil from the Lake Albert area to the coast of the Indian Ocean.
Why:
Uganda has no reason
to believe Kenya has resolved the land compensation issues that led it to embrace a Tanzanian pipeline route.
WhAt next:
Of cials in Kampala will have to nd different reasons and different ways to resolve problems stemming from the collapse of Tullow Oil’s farm-in deal with Total and CNOOC.
ThE collapse of Tullow Oil’s farm-in deal with France’s Total and China National O shore Oil Corp. (CNOOC) for the Lake Albert project is unfortunate – and not just for Uganda, the coun- try that is home to the assets in question. Tanza- nia is also in a tough spot, since it was supposed to host the longest section of the pipeline that would have pumped crude from the Lake Albert blocks to the coast of the Indian Ocean.
But Kenya appears to be hopeful that recent events will create a new opening for involvement in the development of Uganda’s oil resources.
Andrew Kamau, the principal secretary of the petroleum department of Kenya’s Ministry of Energy and Petroleum, indicated on September 9 that his country was ready to make a deal with Uganda on the construction of a new oil export pipeline. he described Kenya as “open for busi- ness” but indicated that it would wait for Uganda to initiate talks rather than the other way around.
Kamau explained that Nairobi had taken this position because it was not willing to build a pipeline until Tullow Oil had settled questions about development work at the Lake Albert blocks, since the upstream and midstream com- ponents of the project are integrated. “We would be open to [joint development], but you under- stand that it has been suspended because the
upstream has stopped,” he said.
he added: “They [Uganda] would have to
solve the issues around upstream development rst before we can consider approaching them. at said, we are moving full speed with plans to build our pipeline.”
Back to Kenya
is is hardly the rst time Kenya has shown interest in serving as a transit route for Ugandan oil.
O cials in Nairobi had previously hoped to work with their counterparts in Kampala on the construction of an export link from hoima, a city in western Uganda, to Lamu, a port on the Indian Ocean coast. But in 2016, Uganda’s gov- ernment opted to endorse a Tanzanian plan that provided for building the East African Crude Oil Pipeline (EACOP) along a 1,445-km route from oil elds in the western part of the country to the port of Tanga.
Kampala did not discard the proposed hoima-Lamu route and choose EACOP because it expected the latter to be much shorter or cheaper. Instead, one of its main considerations was the hope that Tanzania would prove less likely than Kenya to create di culties related to compensation for land along the proposed route
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w w w . N E W S B A S E . c o m Week 36 12•September•2019