TotalEnergies: Uganda’s mega oil project under scrutiny

By Maureen Sogne, Buliisa correspondent
Posted on Thursday, 28 July 2022 19:23

Murchison Falls or Kabarega Falls, on the Nile River in Murchison Falls National Park, Uganda, between Lake Kyoga and Lake Albert. ©Guenterguni/Getty Images

Crossing a natural park and a primary forest, and forcing the displacement of hundreds of thousands of Ugandans, the TotalEnergies project has raised the hackles of international NGOs but represents a huge development opportunity for the country.

In the Hoima district, near the TotalEnergies oil site, a concrete road now runs alongside the path of red sand upon which clothing and doughnut vendors are lined up one after the other, taking shelter from the sun under their umbrellas. Behind them are colourful shop fronts bearing the logos of Airtel or MTN, the telecom operators active in the country. In the same area, billboards advertising the arrival of a new hotel or a variety of new construction sites are legion.

“Five years ago, this was a ghost town. Everything was dust here,” says one resident, who believes that the hotel boom and a combination of public and private investment have helped to revitalise the area. The construction of schools, a hospital, a football field and street lights… The so-called “oil road”, linking Buliisa to Hoima, has fundamentally changed northern Uganda, which was previously cut off from the rest of the country.

Behind these infrastructural developments is TotalEnergies’ massive petroleum and gas project, which has been heavily criticised for its environmental and human impact. The Tilenga project, named after the region in which it is located, is jointly managed by France’s TotalEnergies (57% stake), the Chinese state-owned oil developer Cnooc (28%) and the Ugandan national oil company (15%).

Work on it has recently accelerated, following the final decision on a $10 billion (€9.98 billion) investment by the two main players, announced in February at a ceremony in Kampala attended by the chairman and CEO of TotalEnergies Patrick Pouyanné and Ugandan President Yoweri Museveni.

Multiple impacts in rural areas

But the region has also become famous for the cascade of criticism directed at the Tilenga project. It is located within the Murchison Falls National Park, in a habitat dense with animal life but occupying less than 1% of the park. With a total of 426 wells and 31 well pads to be constructed, this rural project will impact people’s habitat, smallholder farming activities and wildlife – much of which is endemic – in addition to introducing a level of industrial activity on a scale the region has never seen.

There is no way that oil will not find buyers.

By 2025, Uganda is expected to produce 230,000 barrels of oil per day (bpd), which would make it the seventh largest energy producer on the continent for the first time, coming in between DRC (271,000 bpd in 2021) and Ghana (189,000 bpd in 2021), and far behind the largest producers Nigeria (1.36 million bpd in 2021) and Libya (1.17 million bpd in 2021).

The crude oil is then to be exported via a 30-metre wide, 1,443-kilometre long, 50°C-heated pipeline across Uganda and Tanzania to the port of Tanga. The cost of this East African Crude Oil Pipeline (EACOP) – is estimated at $5 billion and will be shared between TotalEnergies (62%), the Ugandan national company (15%), the Tanzanian national company (15%) and the Chinese company Cnooc (8%).

At the ceremony for the final investment decision, Uganda’s President Yoweri Museveni said the global movement for clean energy would not be a problem. “We have studied the issue, there is no possibility that the oil will not find buyers,” he said. His government and TotalEnergies have agreed to develop 1 gigawatt of renewable energy by 2030.

Map of East African Crude Oil Pipeline (https://eacop.com/)

Expropriations and rebuilding

The global oil and gas giant says its Tilenga development site has been designed to minimise its footprint, in collaboration with the authorities and nature conservationists. The same applies to the human impact of the project, with a network of local partners reporting any problems encountered to the group.

“Local residents are tasked with asking us questions and we accept that,” explains Jeremy Roeygens, in charge of land acquisition, societal impact management and civil society relations at Total and who previously held the same position in New Guinea, Nigeria and several Middle Eastern countries. “We are in constant contact with local NGOs, civil associations and our local liaison officers; if there is something to be improved, we adapt it,” he says.

Since the implementation in 2017 of the first “resettlement action plan” (which looks at the populations to be displaced before allowing for the construction of the industrial zone), the eyes of international activists and local civil associations have been riveted on the process.

It includes compensation payments, transitional support, resettlement and home building. Four more resettlement plans are still underway, involving 4,905 registered households. To date, 92% of the compensation agreements have been signed and 86% of compensations paid. For the rest, 131 cases are being processed due to “internal discord among families and administrative problems”, according to TotalEnergies.

Today, out of the 622 households affected by the establishment of the industrial area, 100% of the compensation has been paid and 30 houses have already been built and delivered, according to the French company.

My life will change, I will be able to buy a car and pay for my children’s school.

Judith Beroiwroth, 38, is one of the local residents who chose a compensation payment. With her home situated about 100 metres from the industrial estate, she has opted for building a new house and hopes to supply workers with fruit and vegetables that she grows on her land.

“I have opportunities now. My life will change, I will be able to buy a car and pay for my children’s school”, says the future vendor. In this village, where most people still live in mud huts with thatched roofs, the arrival of TotalEnergies opens up previously unseen prospects. “They want to know how they can benefit from the project, what opportunities will open up for them,” says Stella Atugonza, liaison officer for the EACOP project, for which the stakes are similar.

Blockades and intimidation

Despite the oil company’s apparent willingness to follow good practice codes, a French NGO, Les Amis de la Terre – LAT – (Friends of the Earth), decided in 2019 to take TotalEnergies – which is headquartered in France – to court, citing a 2017 law ordering the vigilance of parent companies.

The legal action was originally aimed to prevent possible human rights abuses during the expropriation of people’s land. After a two-year legal battle, the Court of Cassation ruled in favour of the NGO in late 2021 by recognising the “right of option” it enjoys as a non-commercial claimant, thus bringing the case back to the first instance to be examined by a judicial court on 12 October in Paris.

There have been several investigations and reports of violating freedom of the press. On 25 May 2021, an Italian journalist, Federica Marsi, was arrested in Buliisa (a district in the Total mining area) while trying to talk to the affected communities, along with Maxwell Atuhura, an environmental rights activist. Marsi’s investigation followed in the footsteps of a mission by the European Union delegation and the embassies of France, Belgium, Denmark, Norway and the Netherlands, which was blocked at the boundaries of the oil zone on 9 November 2021.

In addition, actions are being carried out by people directly affected by the project. To date, some 5,527 households (equivalent to about 118,000 people according to data compiled by LAT based on TotalEnergies documents) have signed two petitions between 2021 and 2022 denouncing land expropriations without compensation.

Regarding these compensations, several NGO reports, including from LAT, the International Federation for Human Rights and Oxfam, published in 2020, denounced “significant pressure to force people affected by the project to sign the agreements”. A similar report examining the compliance of EACOP’s activities with the environmental and social standards advocated by the International Finance Corporation (IFC) was published in early July by the African Institute for Energy, Inclusive Development International and BankTrack.

Uganda, a symbol of the struggle against oil

An alarming story has dominated the international media but has been denied by Ugandan authorities. “Local civil organisations have never stopped fighting when it comes to the issues of population displacement and the environmental stakes of the project,” says Ernest Rubondo, executive director of the Petroleum Authority of Uganda (PAU) since 2016, who denies there have been any attempts at intimidation.

He strongly opposes the discourse of international NGOs, which he describes as groups with unclear objectives, originating from oil-producing countries yet seeking to “halt the economic development of Uganda”. According to Kampala’s projections, the project will – contrary to what NGOs have said – bring the country a revenue boost of $1.2 billion, or nearly 3% of GDP, and benefit local contractors to the tune of $1.7bn. A boost intended to feed the Petroleum Fund, public monies that will largely be used to finance infrastructure that the country still lacks, says Honey Malinga, director of petroleum at the ministry of energy.

“Some countries started production before concerns about climate change emerged. I’ve been to California and the environmental degradation before legislation was in place is worse than anywhere else in the world,” says Rubondo. Uganda’s legal framework, he says, is among the world’s strictest.

A litmus test

So we have a large-scale, fossil-fuel based project, while the International Energy Agency declared last year that in order to achieve net zero carbon by 2050 and limit global warming to 1.5°C, it was necessary to simply stop all new oil and gas exploitation. In fact, the EACOP pipeline is becoming a litmus test for the willingness of banks and insurers to work on such controversial projects.

This is against a backdrop with many African officials insisting that renewable energy cannot replace the hydrocarbons needed to make steel, run factories and create jobs in an Africa that will reach a population of 2.5 billion by 2050. Or, as Benedict Oramah, the chairman of Afreximbank, who has chosen to maintain its financing of fossil fuels, argues, “There is no shame in financing them”, since the continent faces a double dilemma: closing its energy gap while meeting its commitments to reduce emissions, given that nearly 600 million Africans have no access to energy and that hydrocarbons are crucial resources for the economies of some countries.

Financed by debt, the entire project, estimated at $10bn, still requires financing to complete the EACOP pipeline, according to TotalEnergies. This situation is playing into the hands of the project’s opponents, whose pressure has already dissuaded 20 banks, eight insurance companies, the African Development Bank (AfDB) and the British Export Credit Agency from lending their support.

No one in the world has yet succeeded in industrialising using renewable energy!

“Many of the banks that refused to support EACOP directly are still making ‘blanket loans’ to Total, tying them to the damage and exposing them to the risks. It’s time for the banks to say ‘no’ to any new financing for Total, unless it abandons its plans for EACOP and all other new fossil fuel projects,” says Ryan Brightwell, head of human rights at BankTrack, a member organisation of #StopEACOP, an international coalition of over 260 NGOs.

To support its strategy, Total will, however, be able to count on the grumbling of African heads of state, who happen to be dependent on oil revenues to ensure their countries’ development.

“We will not accept that the polluting countries, responsible for the planet’s situation, tell us that we are no longer going to finance fossil fuels,” said Macky Sall, presiding head of the African Union and president of Senegal – a future oil producer – in June at the United Nations General Assembly. A position also defended on several occasions by Nigerian Vice-President Yemi Osinbajo: “No one in the world has yet succeeded in industrialising using renewable energy!”

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