Experts discuss Uganda oil taxation

SYLIVESTER DOMASA

A PARIS based team of oil experts are in Tanzania to discuss proposed new developments and those already on the drawing board regarding the construction of a 1,410km-long East Africa crude-oil pipeline from Hoima in Uganda through Tanzania to the Indian Ocean

The team scheduled to depart today from Julius Nyerere International Airport (JNIA) has been in a meeting with Tanzania's officials to deliberate on the tax modalities and benefits for the hosting country - Tanzania regarding the four billion US dollars project.

Minister for Energy and Minerals, Prof Sospeter Muhongo has identified the presence of French experts in the country to follow this week's decision by the Ugandan government to grant international oil marketing companies -extraction licence at Ugandan oil rich area -Hoima.

"Uganda has just issued extraction licences to international oil marketing companies, signifying the project is at a good stage of its implementation," Prof Mhongo said during a live broadcast programme aired by Tanzania Broadcasting Corporation (TBC).

He named the international OIM which has been granted the green-light to dive into the oil rich Hoima are French oil giant Total SA, the UK-based Tullow Oil and Chinese state-owned oil company Cnooc Ltd.

The three firms will develop Uganda’s oil fields as well as invest in the Ugandan pipeline which will have an estimated capacity of 200,000 barrels a day.

At least 100,000 new jobs are expected to be created and the Energy and Minerals Minister says there are more opportunities for Tanzanians and the East African Community (EAC) member states to benefit. "Out of the expected 1,410km, about 1,100kmlong pipeline will be in Tanzania.

The investors are also expected to play part in the improvement of the Tanga Port where crude oil will be discharged," he said. Notably, the government in Democratic Republic of Congo (DRC) is also discussing with Uganda to take up some stake in the crude oil export pipeline.

According to the Minister, DR Congo is expected to start export of crude oil at 30,000 barrels a day and projects to rise to 100,000 barrels at its full capacity production. "This is very profitable for Tanzania considering we're bordering DR Congo through Lake Tanganyika.

We expect also the oil and gas reserves in the lake Tanganyika can be exported via the pipeline," he noted, identifying the project will help open up new oil and gas explorations in the country.

Meanwhile, the minister outlined a grand plan to train local Tanzanians in the oil and gas sector, saying they expect the country to become the regional hub of oil and gas experts in 10 years.

Mr Muhongo said as it stands now, Tanzania Petroleum Development Corporation (TPDC) had about 300 experts and the targets were to get 500 experts. "There are more efforts being undertaken by the government and development partners including China and Norway.

We expect to have 1,000 experts in ten years from now. We want our experts to work all across the region providing oil and gas expertise," he said