By April 2025, Uganda is looking towards selling its first commercial oil through the proposed East African Crude Oil Pipeline (EACOP) with the terminal at the Tanzanian port of Tanga, after the Lake Albert Development Project partners announced the final investment decision (FID) and the launch of the project which will involve an estimated $10 billion. During this development phase, some 160,000 jobs are also expected to be created.
To date, exploration findings indicate there are reserves of about 6.5 billion barrels of crude of which 1.4 billion is commercially recoverable in the Lake Albert region of western Uganda.
TotalEnergies and China National Offshore Oil Corporation (CNOOC) Uganda Limited are taking lead in developing the Tilenga and Kingfisher oilfields respectively.
President Yoweri Museveni officiated at the FID announcement in Kampala on Tuesday, in a colourful event graced by several dignitaries, including diplomats and representatives of the international oil companies.
Museveni told guests, “When this oil project came, I was very happy to see that it goes through Tanzania so that our Tanzanian brothers and sisters also benefit something, given their great contribution (through Mwalimu Julius Nyerere) to Uganda. It is good that his people will benefit from this pipeline.”
The Lake Albert development encompasses the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the EACOP in Uganda and Tanzania.
The Tilenga and Kingfisher projects are expected to start producing in 2025 and to reach a cumulative plateau production of 230,000 barrels per day.
Patrick Pouyanné, the Chairman and CEO of TotalEnergies said, “The development of Lake Albert resources is a major project for Uganda and Tanzania, and our ambition is to make it an exemplary project in terms of shared prosperity and sustainable development.
We are fully aware of the important social and environmental challenges it represents. We will pay particular attention to using local skills, to develop them through training programs, to boost the local industrial sector in order to maximize the positive local return of this project.”
He said, “With today’s signing of a framework agreement on renewable energy, we are laying the foundation to implement our multi-energy strategy in Uganda and contribute to people’s access to energy.”
The upstream partners are TotalEnergies (56.67%), CNOOC (28.33%), and Uganda National Oil Company (15%). Production from the oil fields in Uganda will be transported to the port of Tanga in Tanzania through the EACOP cross-border pipeline, whose shareholders are TotalEnergies (62%), UNOC (15%), Tanzania Petroleum Development Corporation (15%), and CNOOC (8%).
Representing Tanzania President Samia Suluhu Hassan, Vice President, Dr. Philip Isdor Mpango said, “With this project, the two countries are projected to realise their record level of foreign direct investment flows to the tune of $3.5 billion over the period 2022 to 2025 which is an increase of over 60% compared to the current levels of foreign direct investment flows.”
Highlighting the importance of Local Content energy and mineral development minister, Ruth Nankabirwa said, “I also want to commend Uganda’s private sector for continually building capacity to participate in the oil and gas sector.
It is through the participation of the private sector that the country will be able to optimize the benefits from the oil and gas sector and experience economic transformation.”
She said during 2020, 92% of the supplies and services to the oil and gas sector were provided by Ugandan entities while in 2021, 53% of the supplies and services were from Uganda entities.
According to a statement, TotalEnergies is committed to implementing action plans that will have a net positive impact on biodiversity as part of the implementation of these projects.
In close liaison with the authorities and stakeholders concerned with nature conservation in Uganda and Tanzania, these action plans will be implemented in collaboration with neighboring communities and under the supervision of an independent institution.
TotalEnergies and the Ugandan Ministry of Energy and Minerals also signed a Memorandum of Understanding (MoU) for the development of renewable energy with the objectives of developing 1 GW of installed capacity, promoting access to electricity and clean energy, supporting national climate change objectives through the deployment of carbon footprint reduction projects.