Business / #ForbesBusiness

August 16, 2018,   5:08 PM

U.A.E Plans To Build Oil Pipeline Between Ethiopia And Eritrea

Abisola Owolawi

I write about business, entrepreneurship, innovation, wealth and culture with a focus on global impact. Innovative, groundbreaking ideas and the structures that drive them over time, inform my subject choices. I cover industries that span manufacturing, service, technology, entertainment, healthcare and aviation among others, across Africa for Forbes Middle East. I have previously worked as Forbes Africa’s West Africa Correspondent, a wealth contributor on the annual Forbes rich list and as a CNBC Africa business contributor. FULL BIO

The U.A.E. government has announced that it plans to build an on-shore crude oil pipeline, which will connect landlocked Ethiopia to Assab—Eritrea’s port city—in a bid to reconcile the two countries after a two-decades-long war.

The project was announced on August 10 following a meeting of Ethiopia’s Prime Minister, Dr Abiy Ahmed and Reem Al Hashimy, the U.A.E.’s Minister of State for International Cooperation in Addis Ababa.

The agreement comes after the U.A.E. awarded laurels to Eritrean and Ethiopian leaders for ending the two-decade long diplomatic thaw between their countries.

The U.A.E. has been mediating the dispute between the two countries and extended $1 billion to Ethiopia last month to help the East African country deal with a foreign currency crisis.

Landlocked Ethiopia began to extract crude oil on a trial basis from reserves in the country’s Southeast in June and will require access through Eritrea to export it.

Historically, Ethiopia had used an oil refinery located in Assab port for its domestic oil needs before a clash ensued over the border demarcation between the two countries in 1998, which led to a drawn-out war.

Ethiopia has historically maintained poor relations with Gulf countries, but as the Arab states began to look at the Horn of Africa as key to food security and broader strategic interests, relations have started to strengthen.

Ethiopia’s new reformist Prime Minister, Abiy Ahmed, announced in June that he would accept a UN-backed border-demarcation, leading to reconciliation between the two countries.

The line will give Ethiopia an export facility in the Red Sea to facilitate its planned future crude production.

Al-Hashimy, who has been very instrumental to the reconciliation process between the two African countries, says that the U.A.E. is keen to exploit the investment opportunities available in Ethiopia.

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