Joint venture partners in Uganda’s Oil and Gas sector signed the Final Investment Decision (FID) on 1st February. The FID by TotalEnergies, China National Offshore Oil Corporation (CNOOC) and Uganda National Oil Company (UNOC) is expected to see money invested towards the development of the Kingfisher and Tilenga projects in the Albertine Graben and the construction of the East African Crude Oil Pipeline (EACOP) from Hoima to the Chongoleani peninsula near Tanga port in Tanzania.
A Final investment decision on Kingfisher development will allow CNOOC to award $460 million worth of contracts to Chinese and Ugandan players waiting to cash in from engineering, construction and logistics supply deals among others.
“So FID is a series of actions that basically ensure the projects are sanctioned for execution, it's never a one event or a contract that is signed. With the signing of the contracts that was done on the 11th, the projects have really been sanctioned," the Chief Legal and Corporate Affairs Officer at the Uganda National Oil Company, Peter Muliisa clarified. "You will soon see Parties committing to spending by grant of contracts to subcontractors.”
The late Magufuli was due in the country with his line ministers to sign off the deals on the pipeline company shareholding plan and the crude oil transportation tariff, which were the last remaining issues.
The two agreed on the conditions of how the Uganda National Oil Company (UNOC) will join and participate in the East African Pipeline project, as well as on the Host Government Agreement which will govern the export pipeline in Uganda. The project is expected to cost the consortium USD 3.5 billion with construction expected to start early next year.
Tullow said on Wednesday that 99.9 per cent of its shareholders had voted for the transaction that will see all its interests in Uganda’s oil industry be taken over by the French oil giant Total E&P. Tullow will be paid USD 500 million payable at completion and USD 75 million payable after the project's final investment decision.
Rubondo like other players insists that Final Investment Decision is simply an event adding that what is a key is for those planning to participate is to make adequate preparations as well as participate in ongoing works.
But the Final Investment Decision which would constitute decisions made by various partners to inject money in projects to commercialize Uganda’s oil resource still eludes the country as joint venture partners Total E&P, China National Offshore Oil Company-CNOOC and Tullow Oil Plc continue to register setbacks to their efforts.
The final investment decision (FID) was expected to open the tap for money to start flowing, paving the way for projects like the US$3.5bn East Africa Crude Oil Pipeline.
Construction of the 1400 km heated oil export pipeline from Hoima in western Uganda to Tanzania’s port of Tanga on Indian Ocean has stalled.