Total Uganda, part of France-based oil and gas exploration and production multinational Total, has recently announced that despite falling oil prices it maintains its plans to export Ugandan petrol to international markets through Tanga’s port in Tanzania’s coastal region.
This position has been also confirmed by Total’s partners in Uganda, the British Tullow Oil Plc and the Chinese CNOOC that proposed their host country to turn to Tanzania to export its oil reserves after Kenya raised some security concerns in September, 2015.
The route through Tanzania is in line with Uganda’s President Yoweri Museveni’s petition of transporting the oil to the coast through a low-tariff pipeline which passes by safer areas and guarantees reliability of operations, explained Total’s CEO and Chairman, Mr. Patrick Pouyanne.
Total is committed to produce and transport the oil through Tanzania as soon as possible despite current low prices since the business is still profitable due to low-cost resources that make it competitive in the international markets, Mr. Pouyanne added.
According to Total, the route through Tanga offers the best option due to its lowest unit cost since the other route through Lamu in Kenya’s coastal region, represents a higher investment due to the roads and water infrastructures that need to be constructed to pave the land for the pipeline.
In addition, the Memorandum of Understanding (MoU) signed between Uganda and Tanzania in October, 2015, is more competitive than that one signed between Uganda and Kenya in August, 2015, since the latter engages the source country with the development of a pipeline for a longer distance.
Moreover, the MoU signed with Tanzania is a flexible one that lets both countries to modify key terms in order to enhance it and achieve the lowest transportation costs for the oil according to Uganda’s Ministry of Energy and Mineral Development.
Tanga port currently counts with two storage tanks for petroleum products with the capacity to store up to 1,000 metric tonnes (MT) either for import of export purpouses.