President Yoweri Museveni and his Tanzanian counterpart, Samia Suluhu Hassan, on Sunday witnessed the signing of three agreements crucial to the development of the East African Crude Oil Pipeline (EACOP).
The three agreements are the Tariff and Transportation Agreement (TTA) and the Host Government Agreement for Uganda and the Shareholding Agreement (SHA) for Shareholders to the EACOP Company.
On concluding the three pacts, officials allowed the companies involved in the project to launch it and also award and award the main Engineering, Procurement and Construction Contracts (EPC).
According to the current structure, Total SA owns 45 percent shares in the company, while China’s CNOOC holds 35 percent.
Another 15 percent is held by the government of Uganda through the UNOC, with the other 5 percent held by Tanzania through the Tanzania Petroleum Development Corporation.
While at State House, Entebbe, it was agreed that Tanzania finalizes the signing of the Host Government Agreement and related agreements with the EACOP Company.
The project, upon completion, will enable Tanzania to earn about $3.2 billion and create between 10,000 to 15,000 jobs over the next 25 years.
Uganda discovered oil reserves in 2006 and has had over 6.5 billion barrels of oil. Investments into the oil project are expected to bring an investment of close to $20 billion, according to the Minister of Energy and Mineral Development Mary Goretti Kitutu.
Last year, the African Development Bank and the government of Uganda signed an agreement to each provide $500,000 of finance for micro, small and medium-sized private enterprises along the East African Crude Oil pipeline (ECOP).
Grants to local businesses along the route could help them access new market opportunities and help build links with regional, national and international companies. This initiative alone could help to create 500 jobs.