KAMPALA – Uganda and the DRC are set to sign an MoU that will see oil produced at exploration blocks in the DRC’s Albertine Graben transported via the East African Crude Oil Pipeline.
The pipeline is a 1,443km-long heated pipeline connecting Uganda’s Kingfisher and Tilenga oilfields with international markets via the Tanga Port in Tanzania.
Following a bilateral meeting in Kampala this week between Uganda’s Minister of Energy and Mineral Development Dr. Ruth Ssentamu and DRC’s Minister of Hydrocarbons Didier Budimbu Ntubuanga, it was agreed that a formal memorandum of understanding will be signed between the two states following the preparation of reports by the respective technical teams.
The move will mark a new era of energy security and regional trade on the back of the EACOP as the agreement will be centered on the strengthening of regional relations and advancing access to regional infrastructures.
African Energy Centre welcomed the move, saying the agreement as a step in the right direction towards monetizing DRC oil, increasing revenue generation through exports, and trigging newfound growth across the East African economy.
“The bilateral meeting held between the energy and petroleum ministries of Uganda and the DRC represents a crucial step towards lifting East Africa out of energy poverty. At the Chamber, we commend the efforts taken by the countries towards maximizing the EACOP. The pipeline offers critical opportunities, not just for Uganda and Tanzania, but for the East African region as a whole,” NJ Ayuk, AEC Executive Chairman, said.
While the construction of the EACOP continues to be criticised by international environmental groups, the bilateral meeting and upcoming MoU are a testament to the role the pipeline will play in East Africa, AEC added.
Civil society organisations have criticised the project, arguing that the pipeline threatens one of the most ecologically diverse and wildlife-rich regions of the world.
They say the pipeline would run through numerous important habitats and nature reserves – home to a number of iconic and endangered animals, such as lions, elands, lesser kudu, buffalo, impalas, hippos, giraffes, roan antelopes, sitatungas, sables, zebras, aardvarks, and the red colobus monkey.
“On its way from Uganda to the Tanzanian coast, the pipeline will disturb nearly 2,000 square kilometers of protected wildlife habitats, including the gorgeous Murchison Falls National Park, the Taala Forest Reserve, the Bugoma Forest, and the Biharamulo Game Reserve – these are multiple reserves critical to the preservation of vulnerable species such as the Eastern Chimpanzee and African Elephant,” For Nature lobby group argues.
However, AEC says the pipeline will enable Uganda to export oil from oilfields located in the Albertine Rift Basin, located on the country’s western border, shared with the DRC.
“With an MoU, the pipeline will also enable the DRC to export oil. The Albertine Graben – also known as the Lake Albert Basin – lies on the western border of Uganda and the eastern border of the DRC, and despite its significant potential, much of the rift area remains underexplored. Now, with the DRC opening up 30 oil and gas blocks for exploration in 2022, new discoveries are on the horizon as players move to replicate success seen across the border in Uganda,” AEC added in the statement.
In addition to benefits created through revenue generation from exports, the pipeline and associated upstream buzz is expected to open opportunities for job creation, infrastructure development, market access and other crucial economic prospects. The pipeline will also enable East African consumers to tap into regional energy supplies, thereby tackling security across the energy-poor region.
Currently, the EACOP is on track to commence production in 2025, with both the governments of Uganda and Tanzania confident that they will be able to secure the funding required.
While international lenders have recently pulled out of the development, caving into pressure from environmental activities, China is expected to step in as the primary financier, leveraging the country’s already strong presence in both the region and the pipeline’s development to see the EACOP’s completion.
As the construction gains momentum and the DRC begins opening up its oil-rich Albertine Graben prospect, East Africa is on the precipice of widespread economic growth on the back of oil and gas monetization and intra-African infrastructure development.
“The Chamber has and will continue to maintain its unwavering support for the development of the EACOP. The pipeline will bring the economic development opportunities that East Africa so desperately needs. The region has significant quantities of untapped oil and gas, and it would be a crime to leave them in the ground.
“With over 600 million people currently without access to electricity and over 900 million without access to clean cooking solution, Africa needs its oil and gas to develop, industrialize and grow. The AEC will continue supporting and promoting this critical infrastructure project,” Ayuk said.