After the cancellation of an earlier permit by Tamoil EA LTD from North Africa following the Libyan crisis of 2011-2012, the Kenya-Uganda pipeline for channeling oil resources across the border is under a fresh tendering process, with fourteen firms already confirming interest.
The terms of agreement will be the major determinant on who bags the deal since there are a number of memoranda, including the fact that the winning bidder must invest in and take possession of the pipeline for two decades, henceforth, prior to giving it back to the state.
In either case, the company, too, must have a yearly turnover of $500m, among other capital stipulations.
Feasibility studies envisage the construction of an enduring conduit that is 14 inches wide that will create an underground transit corridor from Eldoret to Kampala, for a distance of 352 kilometers.
Uganda is highly dependent on petroleum resources that it has traditionally obtained, in transit, and in refined form, from the coastal city of Mombasa in Kenya, but since 1995, the two governments across the border have been strategizing on creating conduit efficiency by increasing the reach of the pipeline into the Ugandan capital at a cost of $97m.
Uganda has had a boon of fortune knocking its doors since the turn of the millennium, when the country began in earnest to explore the possibility of tapping its own fossil reserves, and in the last quarter of 2002, a prospecting firm confirmed the existence of 1.2b barrels in an oil well to the west of the country.
Half-way through the decade, in 2006, another oil find hit the headlines in Waranga 1 through the prospecting efforts of a firm from Australia, a discovery that spurred the state to announce the beginning of production of the natural resource come 2009.
Though further oil discoveries have come to redefine the geological blocks of Uganda, no substantial effort on the part of the government has helped start the production process, but ever since Tullow Oil, which has also struck petroleum in the Kenyan north, stated of the availability of a billion barrels of oil in the Albertine Basin, there is the possibility of production in earnest, soon.
The country has major hydroelectric projects on Lake Albert and Owen Falls but mismanagement of the reservoirs often leads to biting shortages of power, especially in corporate Uganda.
Now that the new project is shaping up into a mega energy project, the country is bound to benefit from eschewing transit costs and clearance of tankers.
Here are the five companies of the twenty that have made the shortlist of the current pipeline undertaking:
- NOCK from Kenya.
- Japanese firm Punjloid
- Inpex Construction from Japan
- South Africa’s Capital Star Limited
- Seven Star Group from China
A notable geographical balance is apparent in this survey, including the fact that National Gas Co. from the Caribbean islands of Trinidad & Tobago has also become part of the culled twenty.