The minister for energy and mineral development Irene Muloni has expressed fears that the cost of transport Uganda’s crude from Hoima in western Uganda to international market through Tanga port in Tanzania could be costly. She also hinted that that emerging cost from the prior estimation is failing negotiations between government and oil companies.
“One of the reasons for choosing the Hoima-Tanga route was because it was the least costly, not more than $12.2 per barrel of oil transported through the pipeline. That was the understanding and agreement,” the minister told reporters in Tanzania after a bilateral meeting between Uganda and Tanzania.
"But down the road as we are trying to finalise the [negotiations] the financial model brought out different issues, which were going to go beyond what we had agreed upon and therefore that held us back. We needed to negotiate and discuss and agree so that [the companies] are able to move again,” she revealed further to the reporters in Dar es Salaam last Friday.
"As the Ugandan government we have been able to communicate with the companies what our expectations are, and now we have to harmonise our understanding with the government of Tanzania so that each one of us enters into the Host Government Agreement (HGA) with the pipeline companies so that work can commence.”
Uganda has set a new deadline for first oil as new issues between oil companies and government keep emerging. Government have not only delivered the much awaited final investment decision, they are yet to complete key FEED studies.