TANZANIA has finally sealed the Host Government Agreement (HGA) with TOTAL in implementing the East African Crude Oil Pipeline Project (EACOP), after protracted negotiations.
The long-drawn-out move in reaching an agreement with the French firm was due to unresolved harmonisation issues between Dar es Salaam and Kampala, two East African countries, which are sole beneficiaries of the 1.7tri/- project.
Speaking shortly after signing the agreement with the French multinational integrated Oil and Gas Company, the Attorney General of Tanzania, Dr Adelardus Kilangi, who also led the country’s team on the negotiating table, said the deal signaled Tanzania’s readiness and commitment in welcoming potential investors to the country.
Professor Kilangi insisted that Tanzania demonstrated its strong will in creating an enabling environment for foreign investors to conduct their business in the country.
“This was an open and transparent negotiation, which had to take place as the two countries had contrasting policies and laws that governed the gas and oil sector,” explained the AG.
He added: “Eventually, we had to achieve a win-win situation in the deal.”
Such an important milestone towards the implementation of the EACOP project, presents another successful step in the process, following the initialisation of the Ugandan HGA in September, this year.
Tanzanian President Dr John Magufuli and his Ugandan counterpart, Yoweri Museveni met in Chato, Geita last month in order to resolve the harmonisation issues between the two countries.
While in Chato, the two Heads of State agreed that each state would expeditiously conclude their respective HGAs for the much awaited lucrative deal.
Early last month, Tanzania representatives and those from the French firm converged in Arusha for a three-week grueling discussions, to conclude relevant negotiations for the Tanzanian HGA, covering among other things; project authorisation, land rights, local content, health safety and environment(HSE) as well as labor standards.
While the discussions lasted for three weeks, the one in Uganda took three months.
“Today we’ve finalised a very substantial agreement, which will provide a legal and construction framework that will allow the project to proceed,” explained TOTAL Africa President Nicolas Terraz.
Once it comes to fruition, the construction of the East African Crude Oil Pipeline from Uganda to Chongoleani area on Tanzanian seaport in Tanga on the Indian Ocean is expected to generate 496bn/- in revenues and offer 10,000 employment opportunities.
The multi-national plan is led by French petroleum giant in partnership with China's CNOOC and British group Tullow Oil, which is seeking to finalise selling its stake in the venture.
Work is scheduled to start by the end of the year on the East African Crude Oil Pipeline to exploit oil discovered near Lake Albert discovered in 2006. Reserves in the area are conservatively estimated at some 1.7billion barrels.