The East African Crude Oil Pipeline Project (EACOP): An Economic Spurt or A Total Nightmare?


The proposed EACOP pipeline would supply up to 216,000 barrels of crude oil a day; the channel will be the first of its kind in East Africa and also will be the longest electrically heated oil pipeline in the world, if completed.

The East African Crude Oil Pipeline Project (EACOP) is a proposed 1,443km pipeline that connects the oil fields around Lake Alberta, located in Uganda, to an export terminal at the port of Tanga, in Tanzania.

Tanzania is expected to earn an estimated $3.24 billion once the project will be is operational and create more than 18,000 jobs over the next 25 years.

The project was announced in July 2016, expected to begin in January 2017 and last for an estimated 36 months. The Ugandan president Museveni and the Tanzanian president Magufuli had laid a symbolic foundation stone signifying the project’s start in August 2017.

The project is being developed by Total SE (NYSE: $TOT) and CNOOC (NYSE: $CEO) through a joint venture. Total holds 66.7% and CNOOC holds 33.33% of the JV deal. Total agreed in April 2020 to acquire Tullow Oil’s (LSE: $TLW) 33.33% entire stake in the Ugandan Lake Albert oil assets as well as the oil export pipeline for $575 million.

The completion of East Africa’s Crude Oil Pipeline project was planned for 2020. But as most of such large-scale cross-government projects, things drag out. Finally in September 2020, Uganda and Tanzania signed a Host Government Agreement (HGA) for the EACOP project between the governments and the French oil and gas multinational company Total SE.

Though the government’s have not yet formally announced a date for when the construction will actually begin – by the end of 2020, the financing of the $3.5 billion dollars EACOP deal and the final investment decision (FID) is expected to be finalised.


In Albertine Graben, the basin of Lake Albert, on the border between Uganda and the Democratic Republic of Congo, approximately 1.7 billion barrels of recoverable oil have been discovered.

The extraction will take place on the Kingfisher field operated by China National Offshore Oil Corporation Ltd (CNOOC), and the Andy Tilenga field will be operated by Total SE.

The extracted oil is planned to be partly refined in Uganda, supplying the local market, and partly exported to the international market.

However, the project is facing significant resistance from the local communities.

The EACOP project is projected to cause several environmental and social rights violations to protected wildlife, massive scale displacement of communities, water resources, and wetlands throughout Uganda and Tanzania.

    • The project threatens tens of thousands of people’s livelihood through massive scale displacement of the communities along the pipeline route.
    • The pipeline will cross the Lake Victoria basin – where an oil spill could prove disastrous for millions of people that will rely on the lake for drinking water and food production.
    • The project is also attracted to open critical ecosystems, including chimpanzees and other wildlife, Murchison Falls National Park, elephant habitats to oil extraction.

Thirty-three tonnes of CO2 per year is estimated to emit from the oil’s burning will be transported through the pipeline alone.

While the world is facing a climate crisis, world scientists are revealing that new fossil fuel developments need to stop if the world is to tackle the climate crisis.


Africa’s biggest lender, the Standard Bank through its Ugandan subsidiary Stanbic and the Japanese Sumitomo Mitsui Banking Corporation (SMBC), proceeded with financing a loan for the $2.5 billion of the cost pipeline project while the remaining one billion dollars will be provided by the equity investors.

The deal has gone through – while completely failing to address and entirely ignoring the negative impacts of the projects and the opposition of local groups.

The region is in appal over how institutions of such caliber are gladly financing a project like the EACOP, instead of seeking to finance renewable infrastructure to help meet the Africa’s energy needs in a clean and rights-compatible manner for many future generations.

An investigative report titled “A Nightmare called Total’ by the French chapter of ‘Friends of the Earth’ and ‘Survie’, shows how a humanitarian crisis is evolving on the back of the EACOP development.

The two French NGOs that published the report ahead of a court order – in which the two NGOs are seeking Total SE to disclose how it will address the adverse impact of its activities – cited an obligation for the company to do so under the Vigilance act of France.

The vigilance act applies to alleged abuses committed by overseas french companies.

Time will show how this plays out, and wether Total and CNOOC can afford ignoring the environmental and rights violations.

In the meantime let’s look at some price action.

Neither of the companies have even remotely recovered to pre-covid levels. And one can’t blame them – the crude oil market has treated the industry players viciously this year.

Considering the general uncertainties in the market with elections and the second wave of COVID-19, and the project specific uncertainties of construction timeline, bureaucratic matters, pending court order and potential lawsuits – we would keep a close eye on these companies in the coming 3-6 months, eying the right opportunity.