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When completed, the East African Crude Oil Pipeline will carry oil from Uganda to a port in Tanzania. Photo: Handout

China and Ugandan leader decry EU’s call to halt planned African oil pipeline

  • The China National Offshore Oil Corporation is a major player in Ugandan oil exploration and owns a big stake in the oilfields and pipeline project
  • Environmentalists say the pipeline, which would pass near Lake Victoria, will contaminate water supplies, harm wildlife and displace thousands of people

China has criticised the European Union for trying to delay the development of Uganda’s oilfields and the construction of a 1,443km (897-mile) crude oil pipeline from Hoima in western Uganda to a port in Tanzania.

The Chinese ambassador to Uganda, Zhang Lizhong, said the EU “should not use the excuse of environmental and human rights issues to block development” of the oilfields and the US$5 billion pipeline.

“We hope that these projects will continue without disruptions and be completed in time so that it would achieve the desired results for national economic and social development for Uganda,” Zhang said last weekend. “And this project is also significant for China-Uganda relations.”

He spoke after witnessing the delivery of parts for an oil drilling rig at the Kingfisher Development Project, located on the eastern shores of Lake Albert in Uganda.

John Magufuli (left), who was then Tanzania’s president, and Ugandan President Yoweri Museveni stand in front of the project board for the East African Crude Oil Pipeline in Mutukula, Uganda, in 2017. Photo: AFP

Zhang was responding to a resolution passed by the European Parliament last month that called for a halt to the construction of the Hoima-Tanga oil pipeline because of environmental concerns and human rights violations.

Environmentalists say the pipeline, which would pass near Lake Victoria, will contaminate water supplies, harm wildlife, destroy ecosystems and displace thousands of people from their ancestral homes. They have petitioned potential lenders not to finance the project because of the risks it poses, and pointed out that millions of people rely on the Lake Victoria Basin as their source of water.

The China National Offshore Oil Corporation (CNOOC) and French oil and gas giant TotalEnergies are major players in Ugandan oil exploration, owning stakes in the oilfields and the construction of the East African Crude Oil Pipeline (EACOP) that would carry oil to Tanga, Tanzania.

In 2006, the British company Tullow Oil discovered commercially viable oil deposits on the shores of Lake Albert in western Uganda at the border with the Democratic Republic of Congo. In 2020, Tullow sold its stake in the project to TotalEnergies. Production has been delayed because of disagreements, funding issues and infrastructural setbacks.

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The companies plan to start drilling at two Ugandan oilfields in the Lake Albert region – the Kingfisher site, operated by CNOOC, and the Tilenga field, operated by TotalEnergies – by the end of the year.

TotalEnergies holds a 56.67 per cent stake in the oilfields; China’s CNOOC has a 28.33 per cent share; and the Ugandan government holds the remaining 15 per cent interest via the Uganda National Oil Company. CNOOC has started importing rig components to be assembled at the Kingfisher oilfield. After testing, drilling is expected to start in December, and production is scheduled to begin in 2025 and last for 25 years.

Uganda has an estimated 6.5 billion barrels of crude oil, the equivalent of 1.4 billion barrels of recoverable oil.

In February, the partners TotalEnergies, CNOOC and Uganda National Oil Company announced a US$10 billion final investment decision for the project, which includes the oilfield development and the construction of the pipeline to carry crude oil harvested from beneath Lake Albert and Murchison Falls National Park.

Ugandan riot police in Kampala detain a protester on Tuesday during a march in support of the European Parliament resolution to stop the construction of the East African Crude Oil Pipeline. Photo: Reuters

Uganda, Tanzania and oil firms Total and CNOOC agreed to build a 1,443km pipeline of heated underground pipes running from Lake Albert’s oilfields to a storage and loading terminal in the Tanzanian port of Tanga. TotalEnergies controls a 62 per cent interest in the pipeline; the Uganda National Oil Company holds 15 per cent; Tanzania Petroleum Development Corporation holds 15 per cent; and 8 per cent for CNOOC.

But last month, the European Parliament passed a resolution condemning the project. It calls for “Ugandan and Tanzanian authorities, as well as the project promoters Chinese and stakeholders, to protect the environment and to put an end to the extractive activities in protected and sensitive ecosystems, including the shores of Lake Albert”.

The European Parliament wants TotalEnergies to take one year before starting the pipeline “to study the feasibility of an alternative route to better safeguard protected and sensitive ecosystems”.

“More than 100,000 people are at imminent risk of displacement as a result of the EACOP project without proper guarantees of adequate compensation,” the parliament said.

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TotalEnergies’ chief executive, Patrick Pouyanné, has been asked to appear before the European Parliament on October 10 to answer questions about the pipeline’s construction.

TotalEnergies has tried to allay fears that the project might be abandoned. On September 29, TotalEnergies EP Uganda acknowledged the sensitivity of the Tilenga field but said: “Since the start of our operations, we have made the commitment to develop this project in a transparent, socially and environmentally friendly manner in line with” the UN’s 17 sustainable development goals.

TotalEnergies EP Uganda’s general manager, Philippe Groueix, has said that reducing carbon emissions should be gradual. “We can regulate but we cannot get rid of fossil fuels tomorrow,” he said. “This will take time. We need to decarbonise the energy worldwide, but you can’t jump from zero to 80 per cent.”

The European Parliament’s resolution outraged Kampala, with President Yoweri Museveni vowing that the project would “proceed as stipulated in the contract we have with TotalEnergies and CNOOC”.

Ugandan activists march in Kampala to oppose the construction of the East African Crude Oil Pipeline. Photo: Reuters

“We should remember that TotalEnergies convinced me about the pipeline idea; if they choose to listen to the EU Parliament, we shall find someone else to work with,” Museveni said last week.

“Some of these EU MPs are insufferable and so wrong that they think they know everything but should calm down. This is the wrong battleground for them. I hope our partners join us firmly and advise them. For us, we’re moving forward with our programme,” Museveni said while addressing an oil and gas summit in Kampala.

“The European Parliament has got enough work to do in its place. I would advise the MPs there to spend a bit more time doing that. East Africa has got more capable people who know what to do,” he added.

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The China National Offshore Oil Corporation also waded into the controversy, saying the pipeline project would be implemented as planned, despite the EU’s objections. CNOOC’s international vice-president, Dan Shao, told Tanzanian media outlet The Citizen: “It is normal for all big projects or those projects with massive investments to face challenges such as this one. We’ll ensure that the investment is executed by all means possible.”

He also noted that investors had already put a lot of money into the project.

“The issue of investment funds is nothing if the project makes sense commercially,” Shao said. “There is a lot of money in the credit markets around the world looking for borrowers; since the project is good, the money will be there.”

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