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Kenya and Uganda said on Monday they were looking for a strategic private investment partner to build and operate a pipeline to transport refined petroleum products between the two east African countries.
The new pipeline, estimated to cost $300 million, is expected to join an existing pipeline from Eldoret, western Kenya, and ferry oil to Uganda's capital Kampala, a distance of about 352 km (220 miles).
"The pipeline will interconnect with the existing 14-inch diameter pipeline running from Nairobi to Eldoret and should be able to transport products to and from Kampala, Uganda and Eldoret, Kenya including spur line in Jinja," the two governments said in a joint call for bids published in Kenyan newspapers.
"The project will also include a common user depot at the pipeline terminal in Kampala," they said, adding that it would be developed under 20-year Build-Own-Operate-Transfer arrangement.
Landlocked Uganda currently transports all of its fuel - imported primarily through Kenya's Mombasa seaport - in tankers over several hundred kilometres of road. Officials say the method is unreliable, costly and damages roads.
The contract to build the pipeline from western Kenya to Uganda was originally awarded in 2007 to the east African unit of Libyan-owned petroleum firm Tamoil. The contract was cancelled in September last year after the project faced multiple delays.
Both Kenya and Uganda have discovered oil reserves but production has yet to start.
on going portfolio management; focus on high value oil and early
& Appraisal campaigns to target 1 billion boe with over 40 wells
planned for 2013
Tullow Oil plc (Tullow) issues this Operational Update summarising key
activities since the Interim Management Statement on 14 November 2012 and a
Trading Statement in respect of its financial year to 31 December 2012. This is
in advance of the Group’s Full Year Results, which are scheduled for release on
Wednesday 13 February 2013. The information contained herein has not been
audited and may be subject to further review.
"Tullow accomplished much in
2012. We have had significant exploration success in establishing Kenya as a
new hydrocarbon province and continued to add to and mature our exploration
portfolio. Jubilee production issues were successfully and cost effectively
resolved and gross production from the field is now around 110,000 bopd.
Commercial reserves have also increased, benefitting from the submission of the
TEN development plan in Ghana. We also significantly strengthened our balance
sheet in 2012 by concluding the Uganda farm-down and by refinancing and
extending the maturity of our $3.5bn reserves based lending facility.
Tullow continually reviews its
portfolio to ensure that it allocates capital appropriately to enhance
shareholder value. We accelerated this process after the farm-down in Uganda
when we conducted a thorough review of the exploration assets carried on our
balance sheet. In 2012 we further reshaped the portfolio with entry into five
new countries, including highly prospective licences in the North Atlantic
through the purchase of Spring Energy. Our increasing focus on light oil
exploration has led to our planned disposal of our Asian and Southern North Sea
gas production assets.
This continuing process of portfolio
management, alongside increased Jubilee production and a strengthened balance
sheet, provides a strong base from which our exploration-led growth strategy
can continue to deliver. Tullow is now well positioned for a very successful
2013 and growth beyond."