• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 hours Reality catching up with EV forecasts
  • 7 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 1 day 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 6 days A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 12 days The Federal Reserve and Money...Aspects which are not widely known
Everybody Loves Oil Again

Everybody Loves Oil Again

The reopening of the Chinese…

Oilfield Firms See Highest Profit In Nearly A Decade

Oilfield Firms See Highest Profit In Nearly A Decade

The world’s largest oilfield services…

Uganda’s First Oil Sees Setback As Players Quibble Over Tariffs

Uganda may be getting its first whiff of the so-called oil curse, as the government on Wednesday announced that production on a major oil pipeline may see a delay as its investors hold out for a higher tariff, beyond the $12.20 per barrel tariff originally agreed upon.

Uganda’s crude oil reserves are 6.5-billion-barrels-strong, and promise to bring Uganda prosperity—if it can manage to escape the resource curse, that is.

ADVERTISEMENT

The 1400 km Uganda-Tanzania pipeline in question will run from Hoima, Uganda, to Tanzania’s Port of Tanga. The financing for the project will come 70% from the governments of Tanzania and Uganda, with the remaining 30% from Tullow Oil and CNOOC. France’s Total also co-owns part of Uganda’s oilfields, and may be negotiating for a stake in the pipeline project.

ADVERTISEMENT

Uganda chose the Tanzania route for its oil pipeline over a perhaps riskier one through neighboring Kenya, who also has discovered oil and is anxious to move ahead with infrastructure projects. But this Tanzania route was chosen, the Uganda government says, on the basis that the tariff would not exceed $12.20 per barrel.

The renegotiations will likely delay final investment decision for the $3.5-billion pipeline project until June 2019—the previous date for the FID was by the end of 2018, but the project has already seen delays prior to that.

Part of the challenge Uganda will face in moving its oil to market is the viscous, waxy nature of its oil, which requires an insulated, heated pipeline that will keep the oil above 50 degrees Celsius so it will continue to flow.

The expected delay in pipeline will also delay first oil from Uganda. Still, Uganda is eyed as being an oil hotspot despite its challenges, which include its landlocked position; viscous, waxy oil; and civil protests.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

ADVERTISEMENT


ADVERTISEMENT


Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News