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DRC Interested In Uganda’s Crude Pipeline Project

The Democratic Republic of Congo (DRC) has formally expressed interest to join the East African Crude Oil Pipeline Project (EACOP), Oil in Uganda has established.

Uganda and Tanzania plans to construct a 1,445 km long, 24-inch diameter, heated pipeline to provide access for Uganda’s crude oil to the international market.

Uganda’s Minister of Energy and Mineral Development, Irene Muloni noted that Democratic Republic of Congo government is considering EACOP as an alternative route to access the international market for its crude from newly discovered oil resources in the eastern part of the country.

“The DRC government has formally expressed interest to join crude pipeline project. They see it [EACOP] as an alternative route for their crude to the market,” she said, while launching the Front End Engineering Designing (FEED) for the crude oil pipeline project recently.

An American Company Gulf Interstate is conducting the FEED study that is expected to provide the actual designs, costs and route for the crude oil pipeline. The study that was launched early January 2017 is expected to be completed within 8 months.

Muloni explained that when they (Uganda and Tanzania team) was  inspecting the Tanga port last year, they were joined by an official delegation from the Democratic Republic of Congo’s Ministry of Hydrocarbons, and the delegation expressed interest to participate in the crude oil pipeline project.

“This is potential route for them to access the international market,” she explained.  This means DRC government, if admitted will be expected to acquire a stake in the EACOP and pay a tariff of $ 12 dollars per every barrel of crude oil transported through the pipeline.

The Democratic Republic of Congo (DRC) has so far discovered 3 billion barrels of oil around Lake Albert Eastern and part of the country, which neighbors Uganda. However, it is yet to be confirmed how much of the 3 billion barrels is recoverable. It is therefore cheaper for DRC to transport its crude through EACOP and the Alternative being construction of a 6,500 kilometer long pipeline running though the vast jungles to the country’s western coast line.

Last year, Giuseppe Cicarelli, the Chief executive officer of Oil of DRCongo, one of the companies exploring for oil in Eastern DRC, said access to the least cost option to get crude to the international market is vital to the next round of investment the company is supposed to make.

“Oil of DRCongo is actively working to find viable solutions for the future evacuation of the crude oil from block I and II of Lake Albert, having already completed an extensive seismic campaign,” he said. Oil of DRCongo, operates two blocks around Lake Albert.

DRC’s expression of interest follows, President Museveni recent appeal to his Congolese counterpart, Joseph Kabila to consider joining the northern corridor projects, in particular the East African crude oil pipeline.

French oil giant, Total S.A is one of the companies exploring oil in northeastern DRC. Total holds 66 percent stake in Block 3, located along Lake Albert alongside with South Africa’s SacOil.

Total ‘has 54.9 majority stake in Uganda’s’ following a partial farm- down with Tullow, though the transaction awaits government approval. With oil exploration activities in DRC, a controlling stake in Uganda’s oil fields and interests in Tanzania’s oil exploration activities, it makes economic sense for the company to push DRC government to join EACOP.

Total has already indicated its willingness to finance to the crude oil pipeline is likely to be the biggest financier of the crude oil pipeline.

Report by Edward Ssekika