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DMEA TRANSPORT DMEA

Uganda inks deals on $3.5bn Tanzania oil pipe

UGANDA UGANDA has struck deals with Tanzania and remaining deals will “be fast-tracked, including
France’s Total on the construction of the $3.5bn the Tanzanian HGA and we quickly carry out the
The project has been East Africa crude oil pipeline (EACOP). The implementation of EACOP project”.
held back by delays 1,445-km pipeline will connect Uganda’s oilfields A foundation stone for the pipeline was laid
upstream. to Tanzania’s port of Tanga. in August 2017 but there has been little progress
Uganda’s government signed a host gov- since then. The start of construction in earnest
ernment agreement (HGA) on the project, is yet to be determined, and first, funding will
which would become East Africa’s first major need to be finalised. Once work does begin, it is
oil pipeline, on September 13. The deal, which expected that the project will take three years to
establishes a commercial framework, takes the complete.
pipeline significantly closer to reaching a final Total is in the process of acquiring Tullow
investment decision by the end of the year, Ugan- Oil’s stake in the project, and the fields that will
dan officials said. supply its oil.
“It has taken long, but it was a deliberate Uganda does not currently produce any oil,
move, I can assure you Ugandans,” Ugandan but it started finding commercial volumes in
President Yoweri Museveni said at a ceremony. 2006 and estimates it could recover some 1.4
“We have been slow but steady and sure.” billion barrels. But for development to begin,
The deal also makes room for Uganda Uganda will need a route for exporting crude to
National Oil Co. (UNOC) acquiring a stake in international markets.
the project. EACOP was initially due to start up in 2017,
Two days later Museveni signed a pact with but progress has stalled because of upstream
his Tanzanian counterpart , John Magufuli. The delays. Similarly, a plan to build Uganda’s first
two governments will “expedite the harmoni- oil refinery has also fallen behind schedule. The
sation of pending issues,” Museveni said, and plant will process up to 60,000 bpd of crude. ™

REFINING

NNPC still mulling plan to unload

majority stakes in refineries

NIGERIA THE head of Nigerian National Petroleum this year, the company reported that it had sus-
Corp. (NNPC) said last week that his company pended operations at the plants so that it could
NNPC has said before was still looking into proposals for selling off seek funding for their refurbishment. It also said
that it might not retain majority stakes in the country’s four largest oil at the same time that it would not continue to act
majority stakes in its refineries. as operator of the facilities once they resumed
four refineries. Speaking to Channels TV, Mele Kyari, the operations.
group managing director of state-run NNPC, The refineries have long been a drag on
said that company officials were in discussions NNPC’s finances. They have been operating far
on a new operating plan for the oil-processing below their design capacity of 445,000 barrels
plants, which are located in Warri, Port Har- per day (bpd), partly because of underinvest-
court and Kaduna. Under this plan, he said, ment and maintenance-related issues and partly
NNPC would only retain minority stakes in the because of damage to the pipeline networks that
refineries. supply the plants with feedstock. Company data
Kyari did not say how much the company show that the plants processed almost no crude
might offer to investors or when stakes in the oil during the 13-month period ending on June
plants might be sold. Nor did he name any 30, even as they sustained operating costs of
potential partners. He did indicate, though, that $367mn.
the Nigerian government was keen to adopt Under these circumstances, Kyari told Chan-
a model that would allow for greater opera- nels TV last week, NNPC has not been able to
tional efficiency, as well as “more scrutiny of keep the refineries running. It has tried to do
shareholders.” so but has not been able to keep capacity utili-
NNPC has said before that it might not retain sation levels high enough to recoup its costs, he
majority stakes in its four refineries. In April of explained. ™

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