Page 5 - AfrOil Week 10 2021

AfrOil COMMENTARY AfrOil

To this end, Total is making information avail- support for EACOP pending the completion
able to the public about the studies it has con- of a new study. “We have engaged an independ-
ducted in Uganda, he noted. “In view of the ent firm to help us assess the environmental
questions raised by stakeholders, the commit- and social impact of Total’s East African pipe-
ment of Total is to answer to all questions and line project, which environmental groups have
to ensure complete transparency on the studies opposed,” the bank said in a statement last week.
conducted by Total and independent third par- It indicated that its decision on proceeding with
ties and the actions taken as a result,” he said. funding for EACOP would hinge on the out-
Among the documents made public are the come of this study.
independent reviews and environmental/social
assessment reports conducted for operations in Route selection
the Nwoya and Buliisa districts related to the According to previous reports, Total intends
development of the Tilenga oilfield, he added. to build EACOP along a 1,445-km path from
Total affirmed these assertions in its statement, Hoima, a town in western Uganda, to Tanga,
saying: “Several independent reviews have a port on Tanzania’s coast. The Tanzanian sec-
been conducted by third-party organisations tion of the link will be 1,147 km long, while the
to ensure that the projects are implemented in Ugandan section will be 298 km. The latter will
compliance with social and environmental best pass through 10 districts in Uganda, including
practices. These reviews also allow assessment 25 sub-counties and 72 villages. Standard Bank
of the effectiveness of the actions undertaken to The French major has said in the past that it
identify areas of improvement and have resulted selected this route on the basis of several crite- Group has
in related action plans.” ria, including: the anticipated environmental
The French major also said it was cognisant impact of construction and the difficulty of con- engaged an
of the sensitivity of the matter for communi- struction, with respect to topography and land independent firm
ties living near work sites. “These [Ugandan] availability. After studying its options, it has con-
projects are undertaken in a sensitive environ- cluded that the Hoima-Tanga route represents to conduct an
mental context and require the implementation the fastest and most economical path towards
of land acquisition programmes with a specific completion of the pipeline. environmental
attention to respecting the rights of the commu- When finished, the pipeline will be able to
nities concerned,” he said. handle 216,000 barrels per day (bpd) of oil from and social study
Blocks 1, 1A, 2 and 3A in western Uganda. Total of the EACOP
Statements follow NGO letter is serving as operator of Blocks 1 and 2, which
Pouyanné spoke shortly after the NGOs pub- include the Tilenga oilfield, while CNOOC project
lished their open letter. is operating Blocks 1A and 3A, which include
The groups signing the document described Kingfisher. These two fields are slated to begin
EACOP as a major social and environmental production in 2025 and will eventually yield at
risk. They sent copies of the letter to a number least 260,000 bpd of crude. The fields contain
of banks that are expected to provide part of the waxy crude, so EACOP will have to be heated to
financing for the pipeline – including but not facilitate oil flows.
limited to Credit Agricole (France), HSBC (UK), According to previous reports, development
JPMorgan Chase (US), Mitsui UFJ (Japan), Miz- of the Ugandan blocks is likely to cost around
uho Securities (Japan), Société Général (France) $6.7bn and will include the construction of
and Standard Chartered Bank Nigeria. (Total two central processing facilities (CPFs) and
and its partners have said that they expect to a network of local feeder pipelines. Ugandan
cover about 70% of the cost of building the link authorities hope to direct around 60,000 bpd of
through bank loans.) oil, or about 23% of anticipated peak produc-
The primary addressees were, however, the tion, to a refinery that will turn out petroleum
three banks that are acting as transactional products for the local market. The cost of this
advisers for Total, its partner China National facility, which has yet to be built, is likely to reach
Offshore Oil Corp. (CNOOC) and the govern- $480mn.
ments of Uganda and Tanzania on the $3.55bn It is not yet clear whether the NGOs will also
EACOP project. These banks are ICBC (China), seek to cut off funding for this refinery project.
Standard Bank Group (South Africa) and Sumi- But if they succeed in doing so for EACOP,
tomo Mitsui (Japan). Total may have to rethink its upstream plans in
Since the publication of the letter, Standard Uganda, where oil development is not likely to
Bank has announced that it will suspend its be profitable without an export outlet. ™

(File photo)

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