- THERE is no need for bad blood after all since experts have assured that the US$ 10 billion extraction of Ugandan crude oil at Lake Albert is certain to be an economic game changer for East Africa.
Total E&P Uganda General Manager, Adewale Fayemi, said the project which will involve several minor projects within the region will create jobs for thousands, provide a market for locally produced goods and services but also add value to commodities.
“It’s a huge project, the first of its kind for Total in the region,” Fayemi told an East Africa Oil and Gas Summit which was held in Dar es Salaam last week. He pointed out that the project will provide opportunities for everyone in the region because of its magnitude.
Fayemi insisted that although world market prices for oil are falling, Total as the single largest investor in the project has decided to pursue it because future prospects are bright and even at current prices it is profitable.
“Apart from the pipeline, the project will involve construction of a refinery, railway line, warehouses, offices and other infrastructure,” said the Total E&P Uganda General Manager.
Among other things, the over 1,400 kilometres pipeline project will create over 5,000 direct jobs and create a gigantic market for food, drinks, housing and other services.
“When construction work begins, there will be around 3,000 trucks transporting people and goods around the project area,” said Planning Engineer, Genevieve Munduru.
Munduru pointed out that the project will involve production of 230,000 barrels of crude oil which will create by-products like liquefied petroleum gas, an electric plant which will produce for both own consumption and national grid.
“In the process of the crude oil production, there will be a lot of activities going on because this process also involves production of waste material,” Munduru pointed out.
Experts estimate that in all, there will be production of 18 tons of solid waste and over 20 tons of liquid waste daily.
Kenyan Energy and Petroleum Ministry Legal Advisor to the Cabinet Secretary, Daniel Kiptoo agreed that the project is a game changer for East Africa urging governments of Kenya, Tanzania and Uganda to work together.
“We are calling on our brothers and sisters from Tanzania and Uganda to work together on this project so that it can have a bigger impact for our region,” said Kiptoo, whose country has been at loggerhead with the two countries over the construction of the pipeline to Tanga port denying his country’s northern route to Lamu port alternative.
“Kenya is open for least cost route, it is important that we consider all options available and make a decision based on the cost factor, whichever way it goes, Kenya prefers a joint project,” Kiptoo stressed.
Kenya which has an estimated 600 million litres of crude oil in its northern region of Turkana, wants the Ugandan pipeline to pass the region to the port of Lamu. But Uganda which has over 6.5 billion barrels prefers the shorter and much secure route from Lake Albert to the port of Tanga.
Giving the break down, the Kenyan Energy and Petroleum Ministry Legal Advisor further argued that if Kenya and Uganda construct the pipeline jointly there will be a savings of over US$600 million which will evaporate once each of them go their way.
The Lake Albert pipeline to Tanga port project is estimated to cost US$4.5 billion, the northern Kenyan route will do US$ 5.5 billion while a third route through southern Kenya to Tanga will cost US$4.7 billion.
Total E&P Uganda, which is the main project investor, partners with Tullow Oil and China National Offshore Oil Company in implementing the project which is set to go into production by 2017 and increase Africa’s share to a total group production to over 700,000 barrels per day or 30 per cent of the total.