TotalEnergies rows back on Uganda oil project timeline

The head of TotalEnergies' Ugandan operations said the company may miss its long-standing target to start crude production from the country's 230,000 b/d Lake Albert project by the end of next year.

"I want to answer this question that everyone is asking, will first oil flow in 2025? I am not sure end of 2025 will be the timeline," TotalEnergies' general manager in Uganda Philippe Groueix told an oil and gas conference in Kampala today.

The timing will depend on the agility of stakeholders to co-operate to resolve outstanding issues, Groueix said.

The Lake Albert project has been controversial since its inception. It involves building the world's longest heated crude export pipeline to connect the TotalEnergies-operated 190,000 b/d Tilenga and Chinese CNOOC-operated 40,000 b/d Kingfisher oil fields in Uganda's Lake Albert basin to the port of Tanga on Tanzania's Indian Ocean coast.

The project partners have faced a barrage of legal challenges in the last few years from environmental groups and non-governmental organisations who claim the pipeline poses a risk to the environment and the livelihoods of local populations. Meanwhile, international banks have come under pressure to distance themselves from the project and in 2022, the European Parliament passed a resolution calling on TotalEnergies to delay work on the pipeline by a year in order to study the feasibility of an alternative route.

Despite the above-ground challenges, TotalEnergies, CNOOC and the Ugandan government have stuck rigidly to a 2025 start-up. More recently, TotalEnergies tweaked its estimate to the "end of 2025", with chief executive Patrick Pouyanne telling investors in February that the project would be around 60pc complete by the end of this year. Groueix's comments today mark the first time the company has flagged a potential delay, although he did not offer a new timeline.

"First oil will depend on our agility to work together, although we are all aiming to produce as soon as possible," Groueix said, adding that four rigs are drilling at the oil fields, three at Tilenga and the other at Kingfisher.

"It is Uganda's right to exploit her natural resources and we shall produce this oil in the most responsible way possible to decarbonize," he said. "Our projects will not flare gas, but we shall produce LPG from this gas and this will reduce the use of charcoal and firewood by a big percentage, thereby saving trees and improving climate. So the activists should know that we are part of the agenda to promote the environment."

Uganda's energy minister Ruth Nankabirwa gave a sanguine response to news of a possible delay, comparing Uganda's oil and gas projects to a woman in labour. "The child can come before the set timeline or shortly after, but the signs are showing that the child is kicking," she said.

Nankabirwa said she will head to Beijing early next month to meet Chinese president Xi Jinping to discuss financing for the $5bn crude pipeline. Chinese export credit agency Sinosure is in talks to provide up to $3bn for the pipeline and is due to make a decision on this in June.

By Mercy Matsiko