Ugandan oil pipeline plan suspended due to collapse of Tullow-Total deal

In Summary

The  $3.5 billion pipeline would pass through Tanzania to the Indian Ocean port of Tanga

"The 1,445 km-long, 24-inch diameter pipeline will be heated so it can keep highly viscous crude oil liquid enough to flow." /REUTERS
"The 1,445 km-long, 24-inch diameter pipeline will be heated so it can keep highly viscous crude oil liquid enough to flow." /REUTERS

Work on a pipeline to export Ugandan oil has been suspended, an industry official said on Wednesday, after Tullow Oil’s plan to sell a stake in the project to France’s Total and China’s CNOOC was called off last week.

“All East African Crude Oil Pipeline (EACOP) activities including tenders have been suspended until further notice because of the collapse of the deal,” the official told Reuters on condition of anonymity.

The stake sale was called off on Aug. 29 due to a tax dispute with the Ugandan authorities.

 

“The collapse has meant uncertainty in terms of who will meet what cost in developing the project, which is meant to have a similar shareholding structure like that of the oilfields,” the official said.

Uganda discovered crude oil reserves about 13 years ago but commercial production has been delayed partly because of a lack of infrastructure, such as an export pipeline.

The 1,445-km (900-mile) EACOP, costing $3.5 billion, would pass through neighbouring Tanzania to the Indian Ocean port of Tanga.