Oil & Gas

03 Nov 2021

Uganda Counts on TotalEnergies, CNOOC to Create New African Oil Hub

03 Nov 2021  by Bloomberg   
Ugandan President Yoweri Museveni is counting on TotalEnergies SE and CNOOC Ltd. to produce oil from its fields in four years, laying the foundation for a new regional fuel hub.

The East African nation expects to reach daily output of 230,000 barrels. While that’s much less than what Africa’s biggest producer, Nigeria, pumps, it will make Uganda bigger than some OPEC members on the continent.

Output starting by 2025 was agreed on with the oil companies “and nobody will change that,” Museveni said in an interview with Bloomberg News on Sunday, referring to his pact with the French and Chinese explorers. There’s nothing pending for the government to do with regards to starting production, and a final investment decision will be announced “soon,” he said.

Other prospects, including fields in South Sudan and Uganda’s planned 60,000 barrel-a-day plant, could make up a larger oil network. “Now that we have our own oil, there’s no way we can continue importing refined products with all that additional transport cost,” Museveni said.

Uganda is among a number of African nations -- from Senegal to Mozambique -- that expect to profit from planned oil and gas projects, even as many countries seek to cut reliance on fossil fuels because of the effect on global warming. The country is also facing opposition from civil society groups, whose concerns on the planned pipeline’s impact on the environment and local communities prompted potential funders such as Standard Bank Group Ltd. to assess their own involvement.

They are “just wasting people’s time,” Museveni said of the non-governmental organizations opposing the project. Uganda is responsible for a small fraction of greenhouse-gas emissions, compared with global industrial superpowers like China and the U.S.

Oil will remain important to the world as it has uses other than fuel, including the manufacturing of plastics, petrochemicals and fertilizer, Museveni said.

The president’s timeline for the projects will be a challenge. Uganda’s oil reserves were discovered about 15 years ago, followed by ongoing delays that included changing the export route. Breaking ground for the $4 billion refinery has also been elusive. The international companies are set to develop the fields, as well as a 1,443-kilometer (897-mile) heated pipeline to transport the waxy crude to the port of Tanga in Tanzania.


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