Uganda moves closer to Kenya oil pipeline

April 19, 2010 at 1:02 PM
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KAMPALA, Uganda, April 19 (UPI) -- The Ugandan president called on his energy minister to seek a memorandum of understanding with Kenya for construction of a bilateral oil pipeline.

Ugandan President Yoweri Museveni called on Energy Minister Hilary Onek to approach Kenyan officials over the construction of an oil pipeline planned between the two countries, Uganda's biweekly newspaper The Observer reports.

Tamoil controls more than 76 percent of a joint venture tasked with building an oil pipeline across the region after the Kenyan government gave up control because of a lack of funding.

Tamoil, the newspaper said during the weekend, filed papers that would launch construction of the pipeline. The cost, however, has soared from $78.2 million to $300 million.

Executives with the The Kenya Pipeline Co. said in February that financing the project was a major obstacle to development. Tamoil said, however, the cost of raw materials justified the increase.

Uganda's interest in the project wavered, meanwhile, as the country emerges with significant oil finds. London-listed Tullow announced in September that it uncovered 700 million barrels of oil in Uganda in deposits associated with Lake Albert.

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