Uganda, Tanzania Sign East Africa Crude Oil Pipeline Agreement (EACOP)

President Museveni and President Magufuli have signed the East African Crude Oil Pipe Line Agreement(EACOP) as an expression of intent to go ahead with the construction of the1400km oil pipe line from Hoima to Tanga port. This was followed bilateral talks between both parties at State House, Dar-es-alaam where they discussed modalities for the implementation of the pipeline and agreed to the terms of the construction.

“I am very happy to be in this State House where we have signed and concluded all the outstanding issues concerning the oil pipe line agreement.We have agreed that the value added tax to this project is deemed to have been paid,”Mr. Museveni said.

The president said that the project itself was a culmination of a lot of work and that it showed East Africa can do things if they want to.

“We have been negotiating on the terms of this project. It is a realization of the economic and social development of the country. This project will benefit Uganda and Tanzania. It is one of the strategic ways for the integration of the East African Community and will strengthen our relationship,”said Mr. Museveni at the press conference in State House.

Museveni said the decision to export crude oil instead of refined products was reached due to the low consumption in Uganda.

“Once we found petroleum oil, my idea was to was to refine it and sell it in the country but they told me that since consumption is low in Uganda, we need to get a way to transport it to other markets hence agreeing on the Tanga-Hoima route, “Mr Museveni explained.

The Uganda leader noted that the fact that the land system in Tanzania is favourable and Tanga is a protected port from ocean waves makes it justifiable for the oil project as the waves of the ocean do not disturb the transportation.

The president concluded by saying that the oil project showed the importance of the political, social and economic integration.

Magufuli on the other hand was very grateful for the partnership with Uganda because it will create employment for both Uganda and Tanzania as well as being a good source of revenue. He also added that as a result of this project, the cost of oil in both countries would drastically reduce making it cheaper to buy. He told the officials that Uganda and Tanzania have laid a foundation stone for the project and hoped that the good relationship with Uganda and Tanzania would continue.

Following the signing of the agreement the two leaders tasked attorney generals from the two states to meet & finalise an Inter-Government Agreement that both energy ministers will sign on Friday 26th May.

Both Uganda and Tanzania have agreed that the pipeline be built by multiple contractors (as many as six) in a bid to speed up the project.