With key deals, Uganda's nascent oil sector nears maturity

KAMPALA, Uganda (AP) — Uganda, Tanzania and French oil company Total are set to sign agreements Sunday on building a heated pipeline to carry crude oil from western Uganda to the Indian Ocean coast. Construction of the pipeline, which would be the world’s longest at 897-miles, is expected to begin this year.

Tanzania's new leader, President Samia Suluhu Hassan, is in Uganda to sign the documents, perhaps her most important executive action since her inauguration last month. Ugandan President Yoweri Museveni and officials from Total, a majority shareholder in Uganda's oil fields, will also sign the agreements, which were long held up by tax disputes, administrative delays, and the death of Hassan's predecessor.

Despite anxiety over falling crude prices in recent years, hopes have remained high in Uganda over the potential for oil exports to lift the East African country into upper middle-income status by 2040. Annual per capita income in Uganda was less than $800 in 2019. A 2015 World Bank study emphasized that the economic benefits would be considerable if local companies are competitive enough to win lucrative service contracts in the oil sector.

Museveni, who has led Uganda since 1986, has sometimes suggested that the discovery of commercially viable quantities of oil in 2006 created an opportunity for him to remain in power.

“They are targeting my oil,” he said of his challengers in the country's 2016 presidential election.

Watchdog groups and others have warned against the personalization of Uganda's oil resources and heavy borrowing by national budget authorities anticipating oil revenue. It remains unclear when Uganda will export its first drop of crude, since developing storage sites, processing facilities and other key infrastructure will take time.

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