The Final Investment Decision that has had Uganda on tenterhooks to unlock much needed Foreign Direct Investment to catapult the oil and gas sector was to be achieved at whatever cost.
A jovial Total Energies President, Patrick Pouyanne, towering over the podium at 6’3″, on a mild Tuesday morning as he made his remarks at a ceremony where the International Oil Companies and Joint Venture Partners (JVPs) committed to the FID, made the revelation to an enthusiastic crowd of foreign dignitaries, delegates and government officials.
“This day would not have been possible without clear leadership and involvement of President Museveni from Uganda. I will remember for long the night of November 2019 where both of us, alone, decided that we reach this FID, whatever it cost,” Pouyanne said.
Pouyanne, who was appointed TotalEnergies Chief Executive Officer in 2014, with a trademark for cost-cutting in business operations, revealed that Uganda is the country he visited most in the world since 2018, which was no doubt a period of intense back and forth negotiations between the oil companies and Government of Uganda to clear hurdles that were holding back progress towards reaching the FID.
He cited that it was definitely a day of happiness for all including the JVPs in this Lake Albert Development Project and hoped it was for the people of Uganda and Tanzania too.
“Today is the D-day for us to be clear where we committed the $10 billion we shall require to develop the Tilenga project, Kingfisher project in Upstream Uganda but as well this very long 1,445 km pipeline from Hoima to Tanga, from Uganda to Tanzania,” he said, adding that “it is a day we are committing to go to first oil in 2025 or maybe a little earlier if they could.”
Masterpiece of the Lake Albert Project
Much has been said about the East Africa Crude Oil Pipeline (EACOP), including its record for being the longest electrically heated pipeline in the world, at least by design thus far.
The JVPs on the EACOP, valued at $4 billion, include Total Exploration and Development Uganda (TEPU) with majority shares of 62%; China National Offshore Oil Corporation (CNOOC) with 8%; Uganda National Oil Company (UNOC) with 15% and Tanzania Petroleum Development Corporation (TPDC) with 15%.
Uganda will host only 296km of the pipeline with the rest of it in Tanzania. Last year in April 2021, Pouyanne witnessed the signing of key agreements between Uganda and Tanzania that effectively put a project framework for EACOP in place.
At the occasion of announcing the FID, Tanzania was represented by Vice President Phillip Mpango, who noted in his remarks that Uganda and Tanzania are projected to realise record foreign direct investments flows of $3.5 billion over three years, an increment of 60% from the current inflows.
The EACOP is also expected to create up to 10,000 jobs, foreign exchange earnings in form of dividends and service receipts from handling project cargo estimated at 500,000 tonnes of imported equipment.
Get to work
The long years of protracted negotiations have eventually yielded fruit. Pouyanne noted that the signing of the FID officially flags off major construction works for the Tilenga, Kingfisher and pipeline projects following over 10 years of arduous efforts of “building enough trust among the JVPs to invest over $10 billion in the Lake Albert oil development project.”
“This is a historic day, the D-day; but, in fact it is also the departure day. Departure day for the team to work hard to build the project. We have spent 10 years, we entered into Uganda in 2012 as Total by that time to achieve this commitment. We have four years now to build it. We should not forget because before this was a time of long negotiations. Now this a time of execution and time is money. So we must not lose a day…”
