Uganda, Tanzania sign MOU on pipeline

Uganda and Tanzania have inked an agreement to evaluate the possible construction of an oil pipeline linking the two countries.

Uganda’s Ministry of Energy and Mineral Development released a statement on the proposed pipeline on Monday, saying the government is looking to increase the value of its yet undeveloped oil.

Costs and security are among the factors at play in the decision on the pipeline route.

Uganda has no sea access and would benefit from a pipeline to a port where it could ship the oil production it expects to begin in 2017 or 2018.

In July, the government shortlisted 17 oil and gas companies for the country’s first competitive bid round.

The energy ministry will award six licences for exploration of the Albertine Graben region, which holds around 6.5 billion barrels of oil.

Oil was first discovered in the East African country in 2006, and the government expects production to begin by 2018.