Oil Companies Undecided Over Oil Export Pipeline

2065 Views Kampala, Uganda

In short
Oil companies were initially for the export pipeline and against the oil refinery but were forced to accept the refinery project after signing an MOU with the government early this month, agreeing to back the government efforts for a refinery and in turn get diplomatic backing for their export pipeline project.

Oil companies are yet to decide on the investment into an oil export pipeline in Uganda.
 
Following the signing of a memorandum of the understanding (MOU) with government, the three oil companies – Tullow, Total and CNOOC -- requested government to back their bid for the construction of an export pipeline. Under the MOU, government undertook to approve studies and surveys for the export pipeline and also talking to neighbouring countries to approve the route for the export pipeline. However there seem to be mixed reactions over the construction.
 
Tullow was the first to declare they have no intentions of building a pipeline in Uganda. Their Chief Commercial Officer Paul McDade said the company has no interest since they do not invest in pipelines.
 
In an email response to questions from URN this week, Total’s Corporate Affairs Manager Ahlem Friga Noy said studies are on-going to determine the details of the pipeline before the oil companies can determine the level of investment required and commit to it. She also adds that the pipeline will be constructed in the same timeline as the refinery.
 
CNOOC’s president Xiao Zonghwei has also hinted that his company is interested in an export oil pipeline after the studies are complete.
 
Oil companies were initially for the export pipeline and against the oil refinery but were forced to accept the refinery project after signing an MOU with the government early this month, agreeing to back the government efforts for a refinery and in turn get diplomatic backing for their export pipeline project.
 
Under the MOU, government which will own the refinery will have the right of first call for the 30,000 barrel per day crude oil facility. It is expected that with time the refinery will be expanded to 60,000 barrels per day which is the government target. The pipeline will take whatever is left of it. 
 
The export pipeline is expected to cost close to 15 million US dollars and will pass through Hoima, to South Sudan and wind up at the Lapsset Corridor in North Eastern Kenya. These studies, however, studies are still incomplete.

 

Tagged with: oil pipeline