Total SA has suspended, according to Bloomberg, a US-based online news agency, all planned activities on the $3.5b crude export pipeline.
The pipeline, which stretches from Hoima District in western Uganda to Tanzania, is said to have been suspended after the collapse of a deal in which Tullow Oil Plc had hoped to dispose at least 21.7 per cent of its stake in Uganda to joint venture partners Total E&P and CNOOC.
Bloomberg reported Wednesday, without providing more details that Total E&P had terminated all activities related to the 1,445-kilometer pipeline.
It is not yet clear what impact the suspension will have on various local companies who had invested significantly in anticipation of the huge windfall linked to the USD3.5bn to be spent on the project.
The Uganda–Tanzania Crude Oil Pipeline, also known as the East African Crude Oil Pipeline, had been hoped to be the main transport channel that would move crude oil from Uganda to the Port of Tanga in Tanzania.
The suspension is likely to be a major setback and will further delay oil production, whose production deadline had been pushed to 2023.
Without providing further details, Reuters quoted an industry source who said: “All East African Crude Oil Pipeline activities, including tenders have been suspended until further notice because of the collapse of the [Tullow farm-down deal].”
An email, this website has seen from Total to bidders for the project advises all bidders that the project is now on hold.
“Dear team, be advised that the Package EACOP (East Africa Crude Oil Pipeline)- MLC Main Logistics Contractor has been updated. Project is now on hold as bid activity has been suspended indefinitely by Total,” read the email.
Details of the suspension are still scanty.
Last week, Tullow Oil was forced to abandon plans to sell a stake in its Ugandan project to joint venture partners – Total E&P and China’s CNOOC. The stake sale was called off at the close of August due to a tax dispute with the government of Uganda.
According to Reuters, the collapse meant uncertainty in terms of who will meet what cost in developing the project that had been built on a similar shareholding structure like that of the oilfields.
However, Arnaud Breuillac, President Exploration & Production of Total in a August 29th statement said that: “Despite the termination of this agreement, Total together with its partners CNOOC and Tullow will continue to focus all its efforts on progressing the development of the Lake Albert oil resources.”
Arnaud Breuillac, President Exploration & Production of Total
“The project is technically mature and we are committed to continuing to work with the Government of Uganda to address the key outstanding issues required to reach an investment decision,” he said, adding however that, “a stable and suitable legal and fiscal framework remains a critical requirement for investors.”
Reports indicate that key employees, who had been hired to work on the pipeline, have already been laid off.
However, this news website could not confirm the claim.
I will pursue Bank of Uganda to the end; if I die, my son will take over- Dr. Sudhir vows
“Nobody has been in the past been able to win Central Bank – they have stolen 7 different banks and not accounted to any shareholder and this is the unfortunate part of the whole scenario. You take somebody’s assets, you steal it, you profit from it and you don’t account for it; this is so ridiculous! Then, they sued for $100 Million; the money they stole, they are suing me for it. How?” he wondered.
Pictorial: How Meera Investments is changing Kampala’s skyline
Today, Meera Investments, the property development arm of the Ruparelia Group officially inaugurates their Electrical Plaza, the latest addition to their mixed use building portfolio in the city centre.
Since 1994, Meera has been part of a number of innovative property solutions in mainly, the commercial and residential space and today owns sectors and to date owns over 300 properties in Kampala and other major towns like Mukono, Jinja, Mbale and Mbarara.
The company, according to its Chairman and founder, Dr. Sudhir Ruparelia, is the largest developer of commercial and residential properties and also owns the largest number of ongoing real estate projects. It is also the largest private owner of commercial land in Kampala.
Meera Investments Limited was in 2017/18 rated as a top rental income taxpayer by Uganda Revenue Authority (URA) while Dr. Sudhir Ruparelia, the Chairman/Managing Director of Meera Investments, was rated the second biggest individual rental income taxpayer.
Over the last 3-4 years, the company has been on a construction spree, raising several properties across Kampala, which have both redefined city architecture and changed both Kampala’s skyline, as well as the look and feel of the Kampala City.
Today, we revisit and review some of those projects, especially those developed over the last 3-4 years
“The development of SGR isn’t behind schedule at all as far as harmonization agreement is concerned,” Says Coordinator
” The Standard Gauge Railway was adopted in 2014, by the East Africa Presidents who launched the multitrillion project meant to modernise the traditional railway transport system geared towards boosting economic growth by facilitating a faster movement of goods across borders. “
The SGR Coordinator, Canon Perez Wamburu while appearing before the Public Accounts Committee yesterday to respond to audit queries raised in the 2017/2018 audit report that raised concerns over the delays in implementation of the perceived regional railway, he affirmed that Uganda is on schedule for the construction despite compensating only 11% compensation of the project affected persons within three years.
His remarks were in response to a call by some MPs like Theodore Ssekikuubo (Lwemiyaga County) who questioned why taxpayers have to continue funding the team in charge of SGR yet no single kilometer of the railway has been constructed, five years from the time it was launched in 2014.
Ssekikuubo said, “We are incurring nugatory expenditure on this white elephant. Is it about time we launched the standard gauge railway. After a decade of the launch, not even one kilometer has been put on ground. Kenya has already started on its side, ours was launched at a hotel in Munyonyo, it has remained there, dead and buried there unless the contrary is proved, are we as a country right to continue appropriating money to a non-starting project.”
In response, Wamburu said, “We agreed that Kenya and Uganda arrive at Malaba at the same time. The development of SGR isn’t behind schedule at all as far as harmonization agreement is concerned. Uganda SGR isn’t late at all.”
The Standard Gauge Railway was adopted in 2014, by the East Africa Presidents who launched the multitrillion project meant to modernise the traditional railway transport system geared towards boosting economic growth by facilitating a faster movement of goods across borders.
President Uhuru Kenyatta of Kenya flagged off the maiden passenger train on the newly completed Mombasa-Nairobi SGR in March 2017 and although Uganda had promised to start construction in June 2015, but three years down the road, Government is yet to complete funding negotiations with Exim Bank China.
On Uganda’s side, project is to cost USD2.8Bn approximately, of this, Exim Bank will bring on board USD2.3Bn which represents 85%, while the remaining 15% will be footed by Ugandan tax payers.
Big Story2 weeks ago
INVESTIGATION: How cleaners and tea girls were used to steal billions of cash from BoU’s tightly guarded strong rooms
Commercial Justice3 weeks ago
“Everyone who stole my bank, is going to pay,” Sudhir vows
The CEO 1002 weeks ago
Meet Paddy Muramiirah, the man spearheading Crown Beverages’ aggressive comeback
Big Story2 weeks ago
Inside Total’s decision to suspend indefinitely the USD3.5bn crude oil pipeline and the anxiety it is causing to the private sector
Company News3 days ago
Meera Investments, to launch Electrical Plaza today; customers to get 2 free months rent
The CEO 1003 weeks ago
Orient Bank’s Julius Kakeeto to head Post Bank
Technology4 days ago
With UGX1.5 tn in accumulated losses, UGX258.3bn in debts amidst declining sales, how long can Africell hold its ground?
Big Story1 week ago
TOO MANY COINCIDENCES: Why we still believe BoU officials printed illegitimate currency but the matter was hushed by the state in national interest