Uganda, Total strike deal on UNOC's role in pipeline

Uganda has reached a deal with Total that will guide the participation of the national oil company in the crude (oil) export pipeline. The Uganda National Oil Company (UNOC) will hold a 15% stake in the project.

The agreements spells out how UNOC will finance its participation and operation of the over 1,400km Uganda-Tanzania pipeline.

In a September 11 statement issued by Total, the French oil giant said that the decision to allow UNOC to participate in the pipeline project was reached between President Yoweri Museveni and its chairman and chief executive officer, Patrick Pouyanne, at State House Entebbe on Friday.

Museveni speaking after the signing of the deal

The Total E&P managing director, Pierre Jessua, said the decision is a major milestone that will lead to the Final Investment Decision (FID) for Uganda's oil projects in the coming months.

"We now look forward to concluding a similar HGA (Host Government Agreement) with the Government of Tanzania and to completing the tendering process of all major engineering, procurement, and construction contracts," he added in the statement.

He added that the conditions are "set for the ramp-up of project activities", and added that land acquisition will resume. This, the statement added, will be undertaken in accordance with the "highest human rights standards"

"Total E&P reiterates its willingness to pursue a constructive dialogue with the communities and NGOs regarding all project activities," the statement said.

The meeting between Museveni and Pouyanne follows the purchase of Tullow's final 33.33% stake in Uganda's oil sector by Total. The deal was announced by the buyer and the seller in April. The purchase has been approved by the seller's shareholders.

Total purchased the assets for $575m. Total, together with its Chinese partner, Cnooc, had agreed to buy Tullow's 21.57% for $900m in 2017 to facilitate the long-awaited FID for the oil projects. But the deal collapsed last year after Uganda and the oil companies failed to agree on the tax treatment of the transaction.