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Kenya and Uganda stall on talks over oil pipeline route

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World Pipelines,

Negotiations between Kenya and Uganda over a proposed crude oil pipeline deal have hit a dead end, it has emerged.

Kenya and Uganda's presidents and oil company executives met yesterday to hold further discussions on a route for a pipeline to transport the two countries' oil.

Resolving the route of the pipeline is crucial to helping oil companies involved in Uganda and Kenya to make final investment decisions on developing oilfields.

The discussions were deferred to the technical teams of the two countries after President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni failed to agree after a lengthy meeting.

Uhuru is set to travel to Kampala in two weeks when the technical teams are expected to deliver their verdict on whether the pipeline would pass through Kenya or Tanzania.

Public disagreements between the main oil companies involved in the US$4 billion pipeline project — Total of France, Tullow Oil of the UK and China’s CNOOC — over the preferred route are stoking tensions between the governments of Uganda, Kenya and Tanzania.

The pipeline’s route appeared to have been settled in August, as leaders signed a deal for a pipeline from Uganda’s fields in the Lake Albert basin via Kenya’s oilfields near Lake Turkana, and on to Lamu on the Kenyan coast.

This month came an announcement from the Tanzanian and Ugandan governments that the pipeline would go via Tanzania to the port of Tanga, and that Total had raised the funds it needed to finance it.

After Monday’s talks both options still seemed to be on the table, along with a third route through southern Kenya that passes further from Somalia than the Lamu option.

Edited from various sources by Elizabeth Corner

Sources: Financial TimesThe StarReuters

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