Uganda first oil exports face delays

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Uganda’s plan to produce the first oil from resources in the west of the country within three years could suffer a delay, according to reports.

Pipeline investors have said they want the fees for transporting the crude to be increased.

In 2016, Uganda opted to build a pipeline to transport oil from the region around Lake Albert to the port of Tanga in Tanzania, saying it was more cost effective than the original scheme to export oil from Lamu in Kenya.

Uganda has discovered more than six billion barrels of oil, which is being developed by Total of France and the Chinese energy group CNOOC, along with the Irish firm Tullow.

The oil companies are funding 30% of the cost of building the 1,400km (870 miles) pipeline and they have asked for a higher fee despite an existing agreement to cap it at $12.20 (£9.66) a barrel.

The demand will test the government, because it fears higher transport costs would undermine profits from selling the oil to customers abroad. The issue could delay the first exports of oil, planned for 2021.

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