Uganda Oil Deal

The Chinese and French oil giants have signed an agreement to build a huge oil pipeline in Uganda. The companies are to exploit the oil resources of the country. This has fumed the environmentalists.

What is the deal all about?

The National Offshore Oil Corporation of China and the Total Energies of France are to pump out the crude oil in Lake Albert of Uganda. The companies are investing 10 billion USD in this mega project. he oil reserves are located along the Uganda – Congo border. Uganda is land locked country.

About the pipeline

The companies will also construct a 1443 km long pipeline. After completion, the pipeline will become the longest pipeline in the world. The pipeline will pass through Tanzania.

What is worrying the environmentalist?

The drilling is to be done near the Murchison water falls. It is the largest national park in the country. The pipeline project will displace thousands of people. Also, the project is to endanger the water resources in the region. The Tanzanians and Ugandans are to face devastating impacts.

What was the issue around the pipelines?

The crude oil in Uganda is medium – light. It is low in sulphur and is very waxy. The pour point of Ugandan oil is 40 degrees Celsius. This makes the oil solid at surface temperature. This is why the entire stretch of 1443 km pipeline should be heated electrically. This consumes more energy. Heating such long stretch of pipeline is challenging. This is why the project did not kick start for a long time even oil resources were discovered in 2006.

Oil reserves of Uganda

The total oil reserve in the country is 6.5 billion barrel. The recoverable reserve is 1.4 billion barrels. According to the International Monetary Fund, the oil reserves in the country are the fourth largest in sub – Saharan region. The first three are Nigeria, Angola and South Sudan.

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