DRC and South Sudan to link on Uganda, Tanzania pipeline
DRC and South Sudan to link on Uganda, Tanzania pipeline
- Thread starter Geza Ulole
- Start date
Geza Ulole
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- #142
Geza Ulole
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- #143
Geza Ulole
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1academ
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Congratulations are in order for tz and uganda for the deal, for those involved Cost per barrel to move oil from Hoima to Tanga is approx $12.20 . Cost to produce a barrel is $8.98 for Saudi, $9.08 for Iran, $10.57 for Iraq. Consequently, with #Uganda's cost per barrel to break even (and not budget break even) being around $55 per barrel, there is no incentive for outside forces to put money into the Oil Refinery though we are reading about g.e 's proposal. In fact, USA and Canada are aggressively lowering production costs because of fracking (shale) to the detriment of traditional oil producing countries. Its going to be a rocky ride for everyone so better get ready.
REDEEMER.
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Where did you copy this rubbish?
Geza Ulole
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Hahah ati to break even the barrel should be at $55! Nyang'au vomiting jealously, probably he knows better than Total a top 5 largest oil company in the World that is pumping in money. U should at least watch Museveni explaining. FYI the breaking even price is $25 per barrel.
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Naby Keita
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Wivu ni mbaya sana
Geza Ulole
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- Oct 31, 2009
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- Thread starter
- #149
Geza Ulole
JF-Expert Member
- Oct 31, 2009
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Geza Ulole
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- Oct 31, 2009
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Livale
what is ur take on this? Any hope for a Lokichar-Lamu pipeline?
By then lazy Kenyans had this hope! 👇
And now 👇
After 3 weeks of highly confidential negotiations in Arusha
MY TAKE
Considering the fact that Tanzania was even not part of COW as was deliberately left out by Kenya that strongly believed, she has bagged the project already, who is laughing all the way to the bank?
I see mama Amina Mohamed as Foreign Affairs CS!
Arusha. Tanzania and Total oil company yesterday signed an agreement that will pave the way for the construction of a crude oil pipeline from Uganda to the Tanga port.
Implementation of the $3.5 billion East African Crude Oil Pipeline (Eacop) project is scheduled to start in February next year, lasting for three and a half years.
Attorney General Adelardus Kilangi signed the Host Government Agreement (HGA) for Tanzania government while Nicolas Terraz penned for Total oil giant.
“This is an important milestone towards the implementation..it represents yet another successful step in the process,” Prof Kilangi said.
The signing followed three weeks of intensive negotiations between senior government technocrats led by the AG and representatives of Total.
The 1,447 kilometre pipeline will be used for transportation of crude oil from Hoima in Uganda to the Tanga port for export overseas.
Yesterday’s pact with Tanzania followed the initialization of another HGA agreement between Total and Uganda on September 11th after three months of negotiations.
Negotiations for the Tanzanian HGA covered, among others, project authorizations, land rights, local content, health safety and environment and labour standards. “Today’s conclusion is a sign of a conducive environment for investment. Investors should be assured the environment is much more conducive now,” he said.
The pipeline, two thirds of which will pass through Tanzania,will generate at least 10,000 jobs and tax revenue and non-tax revenues amounting to billions of shillings.
Total purchases for the project will cough in Sh1.7 trillion while transportation of goods will generate Sh496 billion and annual salaries Sh294 billion.
The permanent secretary in the ministry of Energy Ms Zena Saidi said the negotiations centred on legal and contractual framework.
“The negotiations were tough but we agreed on conditions under which EACOP) will be built, operated and the local content,” she told an audience at a hotel room.
Mr Terraz, Total’s Head of Africa Division said the negotiations were transparent and that the oil giant will ensure clauses of the agreement were implemented to the letter.
The government team included the Governor of the Central Bank Prof Florens Lugoa, several permanent secretaries, chief executives from the parastatal and the business corporates.
Tanzania and Uganda agreed in March 2016 that a pipeline to transport crude oil from the Lake Albert basin in west Uganda to the markets overseas be routed through the Tanga port. An agreement to the letter was signed by the two neighbouring countries in May 2017 followed by the laying of a foundation stone at the Tanga port by presidents John Pombe Magufuli and Yoweri Kaguta Museveni in August the same year.
EACOP is expected to unlock East Africa’s potential by attracting investors to explore opportunities in the region.
It is projected the project will result to over 60 per cent increase in Foreign Direct Investment (FDI) in Tanzania and Uganda during the construction phase.
www.thecitizen.co.tz
what is ur take on this? Any hope for a Lokichar-Lamu pipeline?
By then lazy Kenyans had this hope! 👇
And now 👇
After 3 weeks of highly confidential negotiations in Arusha
MY TAKE
Considering the fact that Tanzania was even not part of COW as was deliberately left out by Kenya that strongly believed, she has bagged the project already, who is laughing all the way to the bank?
I see mama Amina Mohamed as Foreign Affairs CS!
Tanzania, Total sign agreement for East African Crude Oil Pipeline
TUESDAY OCTOBER 27 2020
In Summary
- The signing followed three weeks of intensive negotiations between senior government technocrats led by the AG and representatives of Total
Arusha. Tanzania and Total oil company yesterday signed an agreement that will pave the way for the construction of a crude oil pipeline from Uganda to the Tanga port.
Implementation of the $3.5 billion East African Crude Oil Pipeline (Eacop) project is scheduled to start in February next year, lasting for three and a half years.
Attorney General Adelardus Kilangi signed the Host Government Agreement (HGA) for Tanzania government while Nicolas Terraz penned for Total oil giant.
“This is an important milestone towards the implementation..it represents yet another successful step in the process,” Prof Kilangi said.
The signing followed three weeks of intensive negotiations between senior government technocrats led by the AG and representatives of Total.
The 1,447 kilometre pipeline will be used for transportation of crude oil from Hoima in Uganda to the Tanga port for export overseas.
Yesterday’s pact with Tanzania followed the initialization of another HGA agreement between Total and Uganda on September 11th after three months of negotiations.
Negotiations for the Tanzanian HGA covered, among others, project authorizations, land rights, local content, health safety and environment and labour standards. “Today’s conclusion is a sign of a conducive environment for investment. Investors should be assured the environment is much more conducive now,” he said.
The pipeline, two thirds of which will pass through Tanzania,will generate at least 10,000 jobs and tax revenue and non-tax revenues amounting to billions of shillings.
Total purchases for the project will cough in Sh1.7 trillion while transportation of goods will generate Sh496 billion and annual salaries Sh294 billion.
The permanent secretary in the ministry of Energy Ms Zena Saidi said the negotiations centred on legal and contractual framework.
“The negotiations were tough but we agreed on conditions under which EACOP) will be built, operated and the local content,” she told an audience at a hotel room.
Mr Terraz, Total’s Head of Africa Division said the negotiations were transparent and that the oil giant will ensure clauses of the agreement were implemented to the letter.
The government team included the Governor of the Central Bank Prof Florens Lugoa, several permanent secretaries, chief executives from the parastatal and the business corporates.
Tanzania and Uganda agreed in March 2016 that a pipeline to transport crude oil from the Lake Albert basin in west Uganda to the markets overseas be routed through the Tanga port. An agreement to the letter was signed by the two neighbouring countries in May 2017 followed by the laying of a foundation stone at the Tanga port by presidents John Pombe Magufuli and Yoweri Kaguta Museveni in August the same year.
EACOP is expected to unlock East Africa’s potential by attracting investors to explore opportunities in the region.
It is projected the project will result to over 60 per cent increase in Foreign Direct Investment (FDI) in Tanzania and Uganda during the construction phase.
Tanzania, Total sign agreement for East African Crude Oil Pipeline
Tanzania and Total oil company yesterday signed an agreement that will pave the way for the construction of a crude oil pipeline from Uganda to the Tanga port.
www.thecitizen.co.tz
Geza Ulole
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- Oct 31, 2009
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DISCORD
Rival projects, regional politics threat to Kisumu port – shippers
The Sh700 million refurbished port is yet to commissioned one year since completion of work
by MARTIN MWITABusiness Writer
Business
02 November 2020 - 04:00
In Summary
•The facility was planned to have been commissioned by President Uhuru Kenyatta in November last year.
•Rival projects between Uganda and Tanzania, including the $3.5 billion (Sh381 billion)Uganda–Tanzania Crude Oil Pipeline (UTCOP), are among those that have left Kenya in the cold.
Kisumu port
Image: Faith Matete
Lack of political goodwill and rival regional projects are proving to be a headache for Kenya's ambitions to commission and fully operate the Kisumu Port, shippers have noted.
Refurbishment of the facility at a cost of Sh700 million was completed in September last year, but its commissioning is yet to take place one year later, with the government shifting dates for its launch.
The facility was planned to have been commissioned by President Uhuru Kenyatta in November last year.
It was later pushed to January this year, an event the government has gone mum on to date, despite the President making several visits to the Lakeside city.
In August, President Uhuru Kenyatta made a low key visit to Kisumu where he made an impromptu tour of the port, which took about 40 minutes.
His most recent visit is last week when he landed at the facility during his tour of the region, with residents hoping he would address the delayed commissioning of the port which is expected to open up regional trade and create employment.
Rival projects between Uganda and Tanzania, including the $3.5 billion (Sh381 billion)Uganda–Tanzania Crude Oil Pipeline (UTCOP) (supposed to read East African Crude Oil pipeline never heard of UTCOP 🤣 🤣 ), are among those that have left Kenya in the cold, according to shippers.
The Shippers Council of Eastern Africa(SCEA) yesterday said infrastructure development between Uganda and Tanzania remain a threat to Kenya's Kisumu Port, even as it questioned why the has remained quite on the project.
"We have received about two invitations to its launch which have all never taken place.There is no much information about the port.
Everybody is in the dark,” SCEA chief executive Gilbert Langat told the Star yesterday.
He cautioned that failure to put the facility into full use will deny Kenya an opportunity to tap into the Lake Victoria trade network, that links Kisumu to the Musoma, and Bukoba ports in Tanzania and Entebbe and Port Bell in Uganda.
“If we develop infrastructure and don't use it, business will not wait, people will look for alternatives,” Langat noted.
Tanzania is also said to play protectionism for its Mwanza, Musoma and Bukoba Lake facilities as it eyes landlocked Uganda as a key transit destination through Entebbe, Port Bell and Jinja.
"The choice of Uganda to work closely with Tanzania is something we need to worry about. We need to have a concersation at the regional level,"Langat said.
Silence on commissioning of the port has since left Kenyan traders and business community in the dark.
Efforts to reach the Transport CS James Macharia for comment proved futile after our calls and text messages went answered.
Interior Principal Secretary Karanja Kibicho had in August said the opening was being delayed due to the Covid-19 pandemic.
“This project was meant to be opened a long time ago, but we have to blame Covid-19,” Kibicho said during a courtesy call to the Nyanza Regional Commissioner.
He yesterday led a team of over 10 Principal Secretaries on inspection of National Government projects in Lamu county, including the Port of Lamu.
The visit comes a week after last the Star reported (last Wednesday) that the manufacturing and delivering of equipment for Lamu Port has been derailed by Covid-19, which is among reasons the facility is yet to be commissioned despite being ready to handle vessels.
In Kisumu, Kenya Railways has taken over operations of the port after the recent merger of Kenya Ports Authority, Kenya Pipeline and railways operations , into the Kenya Transport and Logistics Network (KTLN), coordinated by the Industrial and Commercial Development Corporation (ICDC).
"It is true Kenya Railways have been given the mandate to run the port since we dont have much to handle," a port official told the Star yesterday.
Kenya Railways has been moving small volumes of oil products using its refurbished MV Uhuru to Uganda.
It shipped the first consignment of 22 wagons loaded with 894,000 litres of diesel last December, with no major containerized nor conventional cargo activities at the facility, which is worrying the business community.
All along, Uhuru has been expected to open the port alongside his Tanzanian, Ugandan counterparts John Magufuli and Yoweri Museveni, who are currently on elections mood.
This means Kenya will have to wait longer for any chances of a collaborative launch.
The port can handle 50,000 TEUs or an equivalent of 200,000 metric tonnes.
TEU stands for Twenty-Foot Equivalent Unit which can be used to measure a ship’s cargo carrying capacity.
“It (Kisumu Port) will handle all types of cargo,” KPA management told the Star.
TradeMark East Africa has vouched for Kisumu Port as a key facility the will boost trade within the East Africa Community.
“Kisumu port is served by the Northern Corridor and would attract transit cargo traffic to Uganda and Northern Tanzania. The ports in Tanzania which are primarily served by the Central Corridor will attract transit cargo destined for Uganda, DRC and South Sudan,” Sjoerd Visser, TMEA director-Great Lakes, told the Star.
According to TMEA, water transport is the cheapest and most inclusive mode of transport.
Unfortunately, water transport is also one of the most under-developed and under-utilised modes of transport in East Africa, TMEA notes, calling for improvement of Lake port facilities.
It has been under utilized for over 20 years, with its refurbishment being an effort by the government to revive lake region trade.
Rival projects, regional politics threat to Kisumu port – shippers
The Sh700 million refurbished port is yet to commissioned one year since completion of work
MY TAKE
Tony254 umeiona hii article juu ya Kisumu port?
Geza Ulole
JF-Expert Member
- Oct 31, 2009
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- #153
Total signs pact with Tanzania for its EACOP pipeline construction project – making headway
in Crude Oil News / International / Oil and Gas 360 Publisher Note: / Pipeline News by— Stu TurleyNovember 2, 2020Share
Print 
Energy Mix
Oil & Gas360 Publishers Note: It seems that here is one success for a pipeline against activist and political pressure. This pipeline actually will help the local community, and is a good thing.
Total has announced that it has reached an agreement with the Tanzanian government for its EACOP pipeline project in the country.
This is an important step that will allow the company to effectively start construction work on the 1,445 km long conduit.
On October 27, 2020, the French group Total signed an agreement with the State of Tanzania (HGA), for the construction of the East African Crude Oil Pipeline (EACOP), which will transport crude oil from Uganda to the port of Tanga in Tanzania.
This agreement is essential for the effective start of work and covers various points, namely the rights and obligations of the State, the duties of investors, environmental standards and other relevant standards, liability, the legal framework, arbitration and project closure.
Among others, the signing of the HGA paves the way for negotiations of other important agreements such as the shareholders agreement (SHA), and the agreement on transport and tariffs.
In addition, you should know that the final investment decision (FID) for the development of the project will be taken by December 2020 or the end of January 2021.
Despite the intervention of groups of French and Ugandan activists who believe that this project does not meet certain environmental criteria, construction of the pipeline is expected to start in the first quarter of 2021 at a cost of $ 3.5 billion, and will last around 3 years and a half.
Geza Ulole
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- Oct 31, 2009
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- #154
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
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- Thread starter
- #155
eliakeem
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- May 29, 2009
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DISCORD
Rival projects, regional politics threat to Kisumu port – shippers
The Sh700 million refurbished port is yet to commissioned one year since completion of work
by MARTIN MWITA
Business Writer
Business
02 November 2020 - 04:00
In Summary
•The facility was planned to have been commissioned by President Uhuru Kenyatta in November last year.
•Rival projects between Uganda and Tanzania, including the $3.5 billion (Sh381 billion)Uganda–Tanzania Crude Oil Pipeline (UTCOP), are among those that have left Kenya in the cold.
Kisumu port
Image: Faith Matete
Lack of political goodwill and rival regional projects are proving to be a headache for Kenya's ambitions to commission and fully operate the Kisumu Port, shippers have noted.
Refurbishment of the facility at a cost of Sh700 million was completed in September last year, but its commissioning is yet to take place one year later, with the government shifting dates for its launch.
The facility was planned to have been commissioned by President Uhuru Kenyatta in November last year.
It was later pushed to January this year, an event the government has gone mum on to date, despite the President making several visits to the Lakeside city.
In August, President Uhuru Kenyatta made a low key visit to Kisumu where he made an impromptu tour of the port, which took about 40 minutes.
His most recent visit is last week when he landed at the facility during his tour of the region, with residents hoping he would address the delayed commissioning of the port which is expected to open up regional trade and create employment.
Rival projects between Uganda and Tanzania, including the $3.5 billion (Sh381 billion)Uganda–Tanzania Crude Oil Pipeline (UTCOP) (supposed to read East African Crude Oil pipeline never heard of UTCOP 🤣 🤣 ), are among those that have left Kenya in the cold, according to shippers.
The Shippers Council of Eastern Africa(SCEA) yesterday said infrastructure development between Uganda and Tanzania remain a threat to Kenya's Kisumu Port, even as it questioned why the has remained quite on the project.
"We have received about two invitations to its launch which have all never taken place.There is no much information about the port.
Everybody is in the dark,” SCEA chief executive Gilbert Langat told the Star yesterday.
He cautioned that failure to put the facility into full use will deny Kenya an opportunity to tap into the Lake Victoria trade network, that links Kisumu to the Musoma, and Bukoba ports in Tanzania and Entebbe and Port Bell in Uganda.
“If we develop infrastructure and don't use it, business will not wait, people will look for alternatives,” Langat noted.
Tanzania is also said to play protectionism for its Mwanza, Musoma and Bukoba Lake facilities as it eyes landlocked Uganda as a key transit destination through Entebbe, Port Bell and Jinja.
"The choice of Uganda to work closely with Tanzania is something we need to worry about. We need to have a concersation at the regional level,"Langat said.
Silence on commissioning of the port has since left Kenyan traders and business community in the dark.
Efforts to reach the Transport CS James Macharia for comment proved futile after our calls and text messages went answered.
Interior Principal Secretary Karanja Kibicho had in August said the opening was being delayed due to the Covid-19 pandemic.
“This project was meant to be opened a long time ago, but we have to blame Covid-19,” Kibicho said during a courtesy call to the Nyanza Regional Commissioner.
He yesterday led a team of over 10 Principal Secretaries on inspection of National Government projects in Lamu county, including the Port of Lamu.
The visit comes a week after last the Star reported (last Wednesday) that the manufacturing and delivering of equipment for Lamu Port has been derailed by Covid-19, which is among reasons the facility is yet to be commissioned despite being ready to handle vessels.
In Kisumu, Kenya Railways has taken over operations of the port after the recent merger of Kenya Ports Authority, Kenya Pipeline and railways operations , into the Kenya Transport and Logistics Network (KTLN), coordinated by the Industrial and Commercial Development Corporation (ICDC).
"It is true Kenya Railways have been given the mandate to run the port since we dont have much to handle," a port official told the Star yesterday.
Kenya Railways has been moving small volumes of oil products using its refurbished MV Uhuru to Uganda.
It shipped the first consignment of 22 wagons loaded with 894,000 litres of diesel last December, with no major containerized nor conventional cargo activities at the facility, which is worrying the business community.
All along, Uhuru has been expected to open the port alongside his Tanzanian, Ugandan counterparts John Magufuli and Yoweri Museveni, who are currently on elections mood.
This means Kenya will have to wait longer for any chances of a collaborative launch.
The port can handle 50,000 TEUs or an equivalent of 200,000 metric tonnes.
TEU stands for Twenty-Foot Equivalent Unit which can be used to measure a ship’s cargo carrying capacity.
“It (Kisumu Port) will handle all types of cargo,” KPA management told the Star.
TradeMark East Africa has vouched for Kisumu Port as a key facility the will boost trade within the East Africa Community.
“Kisumu port is served by the Northern Corridor and would attract transit cargo traffic to Uganda and Northern Tanzania. The ports in Tanzania which are primarily served by the Central Corridor will attract transit cargo destined for Uganda, DRC and South Sudan,” Sjoerd Visser, TMEA director-Great Lakes, told the Star.
According to TMEA, water transport is the cheapest and most inclusive mode of transport.
Unfortunately, water transport is also one of the most under-developed and under-utilised modes of transport in East Africa, TMEA notes, calling for improvement of Lake port facilities.
It has been under utilized for over 20 years, with its refurbishment being an effort by the government to revive lake region trade.
Rival projects, regional politics threat to Kisumu port – shippers
The Sh700 million refurbished port is yet to commissioned one year since completion of workwww.the-star.co.ke
MY TAKE
Tony254 umeiona hii article juu ya Kisumu port?
It's good that you mentioned the bad intentions of misleading the world on the nomenclature of the crude oil pipeline project. They feel bitter to use the proper name, East Afrika Crude Oil Pipeline. Instead, they use the name which you will never see it in the formal project documents.
Ntaghacha
JF-Expert Member
- Jul 28, 2020
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Tullow’s 16-year acrimonious relationship with Uganda ends
RONALD MUSOKE November 16, 2020 Business, Cover Story, In The Magazine, TECH NEWS, The News Today Leave a comment
KEY DECISIONS: Tullow’s Aidan Heavey (left) and Uganda’s Yoweri Museveni
On Nov.10, Tullow Oil plc announced the completion of the sale of its assets in Uganda to French super major, Total. The US$ 575 million (Shs 2.15trillion) deal finally brought Tullow Oil’s 16-year involvement in Uganda’s oil project to an end.
Kampala, Uganda | RONALD MUSOKE | When Tullow entered Uganda in 2004, it quickly made several oil discoveries and by 2006 Uganda had been catapulted onto the map of emerging oil provinces—a development which excited Ugandans.
At one of the press conferences called to announce the new oil discoveries by Tullow, Hillary Onek, the then Minister of Energy and Mineral Development, wished Tullow would stay in Uganda for the next 50 years.
But soon Tullow and the government got embroiled in unending tax disputes surrounding the treatment of several transactions. Differences in strategy in commercialisation of Uganda’s oil resources also put the two parties on a perpetual collision course.
Tullow was soon pushed to rethink its future involvement in Uganda’s oil industry. Analysts in the oil industry say turbulence in the global oil market, which hit the company’s finances so much that the production performance for some of Tullow’s major assets in Ghana was deemed “significantly below expectation” by the company’s top executives, also fueled the decision.
BRAINBERRIES
A Soviet Shot Put Thrower's Record Hasn't Been Beaten To This Day
LEARN MORE→
In 2017, Tullow struck a deal with Total, one of its partners in the Uganda oil project, to farm-down its licences at US$900 million. Under the terms of the deal, Total would take over Tullow’s entire existing 33.3334% stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed East African Crude Oil Pipeline (EACOP). However, the transaction collapsed after the government insisted that Tullow pay US$167 million before it could transfer its assets to Total. Negotiations would go on for two years with no deal in sight.
Suddenly, on April 23, this year, Tullow announced that it had finally reached an agreement to sell its Ugandan assets to Total. On July 29 Tullow Oil plc said in a statement that the company’s shareholders had agreed to the sale.
But over the next three months, the transaction was subjected to several other approvals including; the execution of a binding tax agreement with the Uganda government and the Uganda Revenue Authority. The two approvals were finally announced in October.
Going forward, Tullow will retain a financial link to the Lake Albert Development Project through potential contingent payments (when oil production eventually starts).
Rahul Dhir, Tullow’s Chief Executive Officer said the closing of the transaction with Total clearly evokes mixed emotions within Tullow.
“While we are sad to be exiting Uganda after many years, the US$575 million of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position,” he said.
“We will watch the progress of Uganda’s oil and gas industry with much interest and all of us at Tullow wish the people and Government of Uganda and our former Joint Venture Partners every good fortune as they take this important project forward.”
Earlier on in April, Dhir’s predecessor, Dorothy Thompson, noted that Tullow is proud of its pioneering exploration work in Uganda.
“We are very proud of the role we have played in the founding and development of Uganda’s oil industry,” she said, “We wish all Ugandans and our joint venture partners well as they take this important project forward.”
RONALD MUSOKE November 16, 2020 Business, Cover Story, In The Magazine, TECH NEWS, The News Today Leave a comment
KEY DECISIONS: Tullow’s Aidan Heavey (left) and Uganda’s Yoweri Museveni
On Nov.10, Tullow Oil plc announced the completion of the sale of its assets in Uganda to French super major, Total. The US$ 575 million (Shs 2.15trillion) deal finally brought Tullow Oil’s 16-year involvement in Uganda’s oil project to an end.
Kampala, Uganda | RONALD MUSOKE | When Tullow entered Uganda in 2004, it quickly made several oil discoveries and by 2006 Uganda had been catapulted onto the map of emerging oil provinces—a development which excited Ugandans.
At one of the press conferences called to announce the new oil discoveries by Tullow, Hillary Onek, the then Minister of Energy and Mineral Development, wished Tullow would stay in Uganda for the next 50 years.
But soon Tullow and the government got embroiled in unending tax disputes surrounding the treatment of several transactions. Differences in strategy in commercialisation of Uganda’s oil resources also put the two parties on a perpetual collision course.
Tullow was soon pushed to rethink its future involvement in Uganda’s oil industry. Analysts in the oil industry say turbulence in the global oil market, which hit the company’s finances so much that the production performance for some of Tullow’s major assets in Ghana was deemed “significantly below expectation” by the company’s top executives, also fueled the decision.
BRAINBERRIES
A Soviet Shot Put Thrower's Record Hasn't Been Beaten To This Day
LEARN MORE→
In 2017, Tullow struck a deal with Total, one of its partners in the Uganda oil project, to farm-down its licences at US$900 million. Under the terms of the deal, Total would take over Tullow’s entire existing 33.3334% stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed East African Crude Oil Pipeline (EACOP). However, the transaction collapsed after the government insisted that Tullow pay US$167 million before it could transfer its assets to Total. Negotiations would go on for two years with no deal in sight.
Suddenly, on April 23, this year, Tullow announced that it had finally reached an agreement to sell its Ugandan assets to Total. On July 29 Tullow Oil plc said in a statement that the company’s shareholders had agreed to the sale.
But over the next three months, the transaction was subjected to several other approvals including; the execution of a binding tax agreement with the Uganda government and the Uganda Revenue Authority. The two approvals were finally announced in October.
Going forward, Tullow will retain a financial link to the Lake Albert Development Project through potential contingent payments (when oil production eventually starts).
Rahul Dhir, Tullow’s Chief Executive Officer said the closing of the transaction with Total clearly evokes mixed emotions within Tullow.
“While we are sad to be exiting Uganda after many years, the US$575 million of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position,” he said.
“We will watch the progress of Uganda’s oil and gas industry with much interest and all of us at Tullow wish the people and Government of Uganda and our former Joint Venture Partners every good fortune as they take this important project forward.”
Earlier on in April, Dhir’s predecessor, Dorothy Thompson, noted that Tullow is proud of its pioneering exploration work in Uganda.
“We are very proud of the role we have played in the founding and development of Uganda’s oil industry,” she said, “We wish all Ugandans and our joint venture partners well as they take this important project forward.”
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
- 91,917
- Thread starter
- #158
Africa-focused Tullow expects oil production to fall 16% in 2021
in Oil & Companies News 28/01/2021
Africa-focused independent Tullow Oil warned Jan. 27 that its oil production will fall by 16% in 2021, caused by a lack of drilling activity last year along with a planned shutdown at the Jubilee field in Ghana.
Tullow said its working interest production averaged 74,900 b/d in 2020 but this will fall to 63,000 b/d in 2021.
“This forecast reflects the drilling hiatus in 2020, a planned shutdown in September on Jubilee and deferred development drilling on Simba in Gabon,” it said.
The cash-strapped company recently adopted a new game plan, which involves focusing almost solely on growing its offshore West African assets and scaling down exploration in other frontier basins.
“The plan is focused on ensuring that Tullow’s producing assets in West Africa reach their full potential,” said Tullow CEO Rahul Dhir. “We will leverage the new plan and our reduced cost base to generate positive free cash flow at current commodity prices, drive down our net debt and deliver a robust balance sheet.”
Production in Ghana has been dogged by several technical and operational issues in recent years, mainly focused on the FPSO infrastructure at the Jubilee field.
Tullow said a new oil offloading system is being commissioned at Jubilee, which will be ready for a first lifting in February.
“A drilling rig is being mobilized to Ghana to commence operations in the second quarter of the year and the first new production well on Jubilee is forecast to be onstream in the third quarter,” it also added.
In November, Dhir said that production from Tullow’s oil fields in Ghana would fall due to a recent lack of investment.
Tullow said a massive reduction in its drilling program due to the coronavirus pandemic was one of the main reasons for the expected fall in production this year.
Restructuring
London-listed Tullow has endured a difficult few years, after a series of operational and financial setbacks.
It is hoping to generate $7 billion of operating cash flow in the next 10 years by focusing over 90% of its investment in its West African assets, the bulk of which in Ghana.
The company has recently undergone restructuring, which is expected to deliver sustainable annual cash savings of over $125 million.
Tullow said it has agreed to extend the redetermination of the group’s Reserve Base Lending facility with its creditors.
It was due to complete in January, but it has now been extended by one month.
Capital expenditure is forecast to be about $265 million, with around $100 million additionally to be spent on decommissioning, it said.
Meanwhile, Tullow’s Turkana project in Kenya has now been reworked to ensure that it is robust at low oil prices and it expects to submit a revised plan to the government of Kenya later this year.
A final investment decision on Turkana was recently pushed back to the end of 2022.
Located in northwest Kenya, Turkana is expected to produce some 80,000 b/d via a planned export pipeline to the port of Lamu on the Indian Ocean.
Dhir acknowledged in November that the Kenyan oil project requires “a different way of thinking” because of its complexity.
The project is estimated to cost $3 billion, comprising $1.8 billion for the upstream portion and $1.2 billion for the pipeline.
Africa-focused Tullow expects oil production to fall 16% in 2021 | Hellenic Shipping News Worldwide
MY TAKE
Tony254 will u guys see even a picture of a pipeline in Lamu?
Geza Ulole
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African development bank warns gov’t project delays could attract penalties
The Independent February 1, 2021 Business, NEWS Leave a comment
Mubende, Uganda | THE INDEPENDENT | The African Development Bank has threatened to withdraw funding for the project aimed at building the capacity of Ugandans for opportunities in the oil and gas sector, should the government fail to utilize the funds according to the stipulated terms and conditions.
The Bank is funding the East African Crude Oil Pipeline (EACOP) Districts’ Micro, Small & Medium Enterprises (MSME) Business Linkage Project, to make the people along the pipeline corridor ready to access jobs and business opportunities the project is expected to create.
The project is being managed by the Petroleum Authority of Uganda and the Ministry of Energy and Mineral Development in partnership with the Albertine Graben Oil and Gas Districts Association (AGODA). The AfDB has provided U$500,000 (Shillings 1.84 billion) through the Fund for the African Private Sector Assistance (FAPA), while the government of Uganda will provide an equivalent in counterpart funding towards the two-year program.
A similar project is being implemented on the Tanzanian side of the pipeline project route. In Uganda, the projects target people along the crude oil pipeline route. The total length of the pipeline is 1,445 Kilometers. In Uganda it runs through 148 Villages in 24 sub-counties in nine districts of Hoima, Kakumiro, Kyankwanzi, Mubende, Gomba, Sembabule, Lwengo, Kyotera, Rakai and Kikuube.
The project’s overall objective is to help develop capacity of local Uganda MSMEs along the East African crude oil pipeline by enabling them to access new market opportunities and build linkages with larger, national, regional and international companies. The project aims to support inclusive private sector growth and the creation of an estimated 500 jobs along the pipeline.
The target is to have at least 100 local micro-businesses in Uganda trained to do business on the pipeline project and to link at least 70 business enterprises or other relevant business transactions along the pipeline. The project also focuses on helping micro, small and medium enterprises to formalize their operations so that they can be allowed to accesses some of the opportunities on the pipeline project.
Some of the businesses include food supply, restaurants, health services, salons, garages and accommodation among others. But PAU says these will be streamlined in a report that a consultant will produce. The Project Coordinator, Betty Namubiru, who is also the content manager at the PAU, says this will go a long way in ensuring that low-income earners and small enterprises, women and youth-led enterprises are empowered to access some of these opportunities.
The Hoima District Production Officer, Dr. Charles Kajura expressed worry that farmers seem to be left out of these programs and yet, food will be the biggest supply to the personnel in the oil and gas sector.
He says the opportunities will be enormous, but the Ugandans will not be able to access them because of lack of capacity. He says the district local governments (DLG) should be given the task of coordinating farmers and other sectors for this project.
The AfDB reminded the Ugandan authorities of the lengthy procedures they institute in managing projects, which leads to project delays and end up affecting the project value for money. The Bank’s Senior Private Sector Officer, Juliet Byaruhanga warned that the project is only two years starting September 2020 and that any delays could attract penalties from the lender.
However, PAU Executive Director, Ernest Rubondo assures the bank that they will implement the project within the set-out terms and conditions, unless another disaster happens.
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URN
African development bank warns gov't project delays could attract penalties
Mubende, Uganda | THE INDEPENDENT | The African Development Bank has threatened to withdraw funding for the project aimed at building the capacity of Ugandans for opportunities in the oil and gas sector, should the government fail to utilize the funds according to the stipulated terms and...
Geza Ulole
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Tanzania, Uganda in bid to help locals tap into $3.5billion pipeline project
SATURDAY FEBRUARY 20 2021
President John Magufuli and his Ugandan counterpart, Yoweri Museveni, in a tete-a-tete during one of the visits by the latter to Tanzania. The two leaders have successfully led good diplomatic relations between the two countries. Under the relationship, the East African Oil Pipeline worth over $3.5 billion would be constructed from Hoima in Uganda to Tanga port in Tanzania. PHOTO | FILE
Summary
About two years ago oil investors placed huge technical and financial demands - requiring governments to produce required talent on one hand and goods and services that meet international standards and the needs of oil companies on the other hand.ADVERTISEMENT
By The East African
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The governments of Tanzania and Uganda have belatedly begun to build capacities of micro, small and medium scale enterprises seeking to benefit from the $ 3.5b East African Crude Oil Pipeline Project.
The project, which includes training is funded by the African Development Bank at a cost of $500,000.
About two years ago oil investors placed huge technical and financial demands - requiring governments to produce required talent on one hand and goods and services that meet international standards and the needs of oil companies on the other hand.
Tanzania and Uganda approached the bank to help foot the bills. The two countries acted jointly basing on the Intergovernmental Agreement they signed in 2017. The agreement enables the two countries to corporate in the development of the pipeline project.
In the latest case, the two countries want to build capacities of pipeline host communities as a means to manage growing expectations.
“The project seeks to support inclusive private sector growth and creation of an estimated five hundred jobs along the pipeline route,” says Emmanuel F. Mugunga, the Ministry of Energy undersecretary.
Services providers at variance
But the oil and gas service providers argue that government is not doing what is urgent in the circumstances.
“Local suppliers want capital. These are the things that government should be working on at the moment,” argues Emmanuel Mugarura from the Association of Uganda Oil and Gas Service Providers and wonders what the oil funds are doing. Since 2014, most service providers in the oil sector have basically been redundant following a scale down of procurement for goods and services - because of reduced field activities by the oil companies.
Gradually, activities are expected to pick up with procurement of goods and services as the companies prepare to start construction of infrastructure projects such as the Central Processing Plant, and pipeline networks leading to oil production.
The East African Crude Oil Pipeline Project is a 1,445km export pipeline that will transport Uganda’s crude oil from Kabaale in Hoima District, north-west of Kampala to Chongoleani peninsula, near Tanga port in Tanzania.
The 24 inch diameter heated pipeline will export a flow rate of 216,000 barrels of crude per day.
In 2018, joint venture partners Total E&P and China National Offshore Oil Corporation, released an extensive Industrial Baseline Survey report, which showed that the countries are ill-prepared to take up job opportunities in the sector. However, under the AfDB funded project, according to Mugunga, the “overall objective of the training is to help develop capacity of local entrepreneurs along the pipeline route by enabling them to access new market opportunities and building linkages with larger national, regional and international companies”.
Data from oil companies shows that the Lake Albert Basin Development project will create between 100,000 and 150,000 jobs through direct, indirect and induced employment.
However, there is concern if citizens in both Uganda and Tanzania are up to standards to take up the jobs.
“To this end, and in order to reduce imports, it will be crucial that both government, private sector, development agencies and oil companies embark on measures to implement recommended actions,” a joint statement by oil companies, reads in part.
Joint ventures
Uganda’s National Oil Policy of 2008 for example, requires that oil companies provide employment to locals. In case of lack of local expertise, the regulation demands that firms with capacity and capability form joint ventures with local companies in order to qualify for contracts. “I can comfortably say that we have over 12 joint ventures between local and international companies by far. The biggest challenge for local companies is money to be competitive,” says Mugarura.
Q Sourcing, a human capital management firm, for example, formed a joint venture with a French based company, Servtec International.
But, financial capacities are affecting some local companies. According to Mugarura, some ventures have collapsed before coming to fruition because some local companies are unable to raise capital requirements.
The Petroleum Exploration and Production Act 2012, defines a local company by shareholdings of at least 48 per cent. This means that some local companies are failing to raise 48 per cent for the joint ventures to materialise.
“The reality will be different if businesses do not have the capacity and experience to participate in oil and gas activities. We believe businesses have major impacts on growth, income and employment” says Mugunga. A 2021 update on the National Supplier Database shows that 1,299 Ugandan companies have registered while 508 are foreign entities.
The current training seeks to enable the local companies to register in the database. Uganda has capacity to produce 6.5 billion barrels of oil per day. It is anticipated that the production phase will completely transform some sectors in order to be at par with the future needs. The transport and logistics sector for example, will need trucks of at least 20 tonnes carriage capacity
Bemuga, a local logistics company, for instance has partnered with Famy, a Chinese company dealing in constructions equipment, in a move intended to boost its capacity.
Tanzania, Uganda in bid to help locals tap into $3.5billion pipeline project
The governments of Tanzania and Uganda have belatedly begun to build capacities of micro, small and medium scale enterprises seeking to benefit from the $ 3.5b East African Crude Oil Pipeline...