President Yoweri Museveni flew out of the country for the first time since the outbreak of the global-novel-Covid-19 pandemic to meet his Tanzanian counterpart John Pombe Magufuli and sign an implementation agreement for the East African Crude Oil Pipeline.<\/p>\n\n\n\n
Museveni is visit in Tanzania follows the signing of the Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) project between the government of Uganda and Total.<\/p>\n\n\n\n
Museveni said that although oil was a small fraction of the country\u2019s mineral resources , it will be a good spark for transformation. \u201cIt will bring money which we shall use to develop infrastructure, science and technology. This money will not be used for consumption. We shall use it to enhance our durable capacity.<\/p>\n\n\n\n
Total CEO and Chairman, Patrick Pouyanne signed on behalf of his company while Energy Minister Goretti Kituntu signed on behalf of the government of Uganda .<\/p>\n\n\n\n
HGA is an agreement between a foreign investor and a host government governing the rights and obligations of the foreign investor and the host government with respect to the development, construction, and operation of a project by the foreign investor. <\/p>\n\n\n\n
The pact has a stabilization clause designed to minimize the financial and political risks posed to foreign investors as a result of sudden changes in national law. An HGA is often required by foreign investors in countries where foreign investors’ rights are not otherwise protected by a bilateral investment treaty, experts say.<\/p>\n\n\n\n
Early this year ,France\u2019s Petroleum giant Total acquired Tullow\u2019s entire interests in a major deal that could kick-start Uganda\u2019s oil dream journey in the lake Albert multi-million project which had stalled for years.<\/p>\n\n\n\n
Total announced that it had bought Tullow\u2019s entire interests in Uganda Lake Albert Development project including the East African Crude Oil Pipeline.<\/p>\n\n\n\n
Total \u00a0paidTullow an estimated\u00a0 USD 575M with an initial payment of USD 500M at closing and USD 75M when the partners take the Final Investment Decision (FID) to launch the project which is dear to Yoweri\u00a0 Museveni\u00a0 Uganda\u2019s longest-serving president.<\/p>\n\n\n\n
In addition, conditional payments will be made to Tullow linked to production and oil price, which will be triggered when Brent prices are above USD62 a barrel. The statement indicated that the terms of the latest transaction have been discussed with the relevant government of Uganda and Uganda Revenue Authority (URA)officials and an agreement in principle have been reached on the tax treatment of the transaction.<\/p>\n\n\n\n
Under the terms of the new deal, Total will acquire all of Tullow\u2019s existing 33.3% stake in each of the Lake Albert project licences, EAI ,EAIA, EA2 and EA3A plus the proposed East African Crude Oil Pipeline (EACOP) system. The transaction , however, is subject to the approval of Tullow\u2019s shareholders, to customary regulatory and government approvals and to CNOOC\u2019s right to exercise pre-emption on 50% of the deal.<\/p>\n\n\n\n
Total\u2019s Chairman and Chief Executive Officer , (CEO) Mr. Patrick Pouyanne said that the acquisition will enable the company together with its partners to move the project forward thus driving the costs down in order to deliver a robust long-term project.<\/p>\n\n\n\n
Uganda\u2019s oil production has previously be bogged down by disputes over the tax revenues accruing to the Uganda government leading to legal battles in the High Courts of Uganda and the United Kingdom. Industry experts say that Uganda is likely to get far much less revenue in taxes on the current deal and the plummeting oil prices due to the Covid-19 pandemic cannot help matters either.<\/p>\n\n\n\n
Oil prices have gone negative<\/strong><\/p>\n\n\n\n For the first time ever, the price of U.S. crude oil went negative as the coronavirus pandemic obliterates demand for energy.<\/p>\n","protected":false},"excerpt":{"rendered":" President Yoweri Museveni flew out of the country for the first time since the outbreak of the global-novel-Covid-19 pandemic to<\/p>\n","protected":false},"author":1,"featured_media":1878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[90],"tags":[],"class_list":["post-1877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2020\/09\/Magufui-and-kaguta-1.jpg","jetpack-related-posts":[{"id":2987,"url":"https:\/\/prowebinhost.com\/anzu\/museveni-suluhu-sign-east-african-crude-pol-pipeline-oil-companies-say-oil-will-start-flowing-in-2025\/","url_meta":{"origin":1877,"position":0},"title":"MUSEVENI , SULUHU SIGN EAST AFRICAN CRUDE OIL PIPELINE; OIL COMPANIES SAY OIL WILL START FLOWING IN 2025","author":"MOSES SSERWANGA","date":"April 12, 2021","format":false,"excerpt":"President Yoweri Museveni\u00a0 of Uganda and his counterpart President Samia Suhulu Hassan of \u00a0Tanzania were joined by the two oil companies of Total E&P, and China\u2019s CNOOC to finally \u00a0sign the East African Crude Oil Pipeline in the Capital Kampala . 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Ruth Nankabirwa has underscored the Importance of the East African Crude Oil Pipeline (EACOP) (Special Provisions) Bill -as an important \"legislation of our time\"- because it seeks to facilitate the first crude oil pipeline development in Uganda and the East African\u2026","rel":"","context":"In "National Development"","block_context":{"text":"National Development","link":"https:\/\/prowebinhost.com\/anzu\/category\/national-development\/"},"img":{"alt_text":"","src":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2021\/10\/IMG-20211028-WA0070-1.jpg","width":350,"height":200,"srcset":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2021\/10\/IMG-20211028-WA0070-1.jpg 1x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2021\/10\/IMG-20211028-WA0070-1.jpg 1.5x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2021\/10\/IMG-20211028-WA0070-1.jpg 2x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2021\/10\/IMG-20211028-WA0070-1.jpg 3x"},"classes":[]},{"id":6684,"url":"https:\/\/prowebinhost.com\/anzu\/oil-pipeline-project-will-go-ahead-dispite-eu-resolution-says-president-museveni\/","url_meta":{"origin":1877,"position":2},"title":"OIL PIPELINE PROJECT WILL GO AHEAD DISPITE EU RESOLUTION SAYS PRESIDENT MUSEVENI","author":"UgandaUpdate","date":"September 18, 2022","format":false,"excerpt":"President Museveni has assured Ugandans and the EAC region that the East African Company Oil Pipeline (EACOP) project, will go ahead despite a resolution by European lawmakers calling for it to be delayed over \"rights violations\". 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