TotalEnergies is walking a tightrope as new hurdles threaten to delay the pipeline project

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BY JULIUS BARIGABA

International oil company TotalEnergies is due to answer charges of environmental and human rights abuses in a new threat against the realization of its East African crude oil pipeline (Eacop) and related upstream oil projects in Uganda’s Albert Sea region before the European Parliament on October 10 in Brussels.

The European Parliament has invited CEO Patrick Pouyanné to Brussels to justify the project that lawmakers denounced last week.

He will appear before Parliament’s Environment, Food and Natural Resources Committee and Human Rights Committee. The outcome will determine how the company navigates this recent crisis.

Struck by opposition from environmentalists on one side and besieged by financiers on the other, Total is now walking a tightrope as it pushes Eacop forward.

Last week, the European Union Parliament passed a resolution urging the French oil company and its joint venture partners to delay the projects by a year to address environmental and human rights concerns.

That decision was rebuffed by Ugandan President Yoweri Museveni, who said the country would look for alternatives if Total obeyed the European Parliament.

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The oil company, which is siding with President Museveni, has also vowed that the projects – which are now in the development phase – will not be stopped.

As Total pondered how to handle this crisis, President Museveni was on a warpath with the company, which is Eacop’s largest shareholder at 62 percent. Uganda National Oil Corporation (UNOC) and Tanzania Petroleum Development Corporation each own 15 percent of the shares, while China National Offshore Oil Corporation (CNOOC) owns 8 percent of the shares.

First, in a meeting with the ruling party’s MPs on September 16, the President warned that TotalEnergies is ready to take them to international arbitration should TotalEnergies give in to pressure from the European Parliament and stop Eacop or withdraw from the project agreement.

He later tweeted that he opposed the EU Parliament’s resolution, but more importantly that he fired a warning shot at the French oil giant.

“We should remember that TotalEnergies convinced me of the pipeline idea; If they choose to listen to the EU Parliament, we will find someone to work with,” the Sept. 16 tweet read.

Total is a corporate citizen of the EU and could be influenced by the legislator.

However, it is evident that the European Parliament’s decision has shaken government officials at the Ugandan Ministry of Energy, as well as at TotalEnergies and Eacop Company, all of whom have previously been sparing with information. They all now seek voluntary information about the project, either through media briefings or on their websites.

For example, this week the Eacop Company uploaded on its portal the Status of Compensation for Project Affected Persons (PAPS) – a key tenet on which EU censorship is partly based, as well as the environmental and social impact assessment.

Before the Brussels resolution, this information was not available.

displaced persons

With construction slated to start later this year, only 331 of Eacop’s total 9,513 PAPs in Tanzania are being physically evicted and selected as replacement shelters, but the website says “construction of these homes is underway” with no indication of completion timelines.

In Uganda, out of 3,648 PAPs, only 203 are physically displaced and the majority of them have opted for alternative housing. According to the website, these are also under construction, but no completion dates have been given.

The EU Parliament’s resolution puts the number of people affected at more than 100,000 – mainly farmers who are already being evicted from their land without prior and fair compensation, a figure which the resolution also describes as an imminent risk of eviction for communities.

Ugandan government authorities are also sweating to dispel claims that Eacop will traverse numerous protected ecosystems impacted by the heating pipe operating at 50 degrees Celsius. Officials counter that there are only five small rivers and of the pipeline’s 1,443 km, only 8 percent is forest reserve.

Protected Areas

The EU resolution called for an end to mining activities in protected and sensitive ecosystems, including the shores of Lake Albert, and referred to the 132 wells Total plans to dig in Murchison Falls National Park.

“You will find it very difficult to navigate past it,” said Omar Elmawi, coordinator of the Stop Ecop campaign, a network of organizations opposed to the project.

“This project has many problems. The biggest of these is human rights abuses,” he added.

EU Parliament resolutions often bite those concerned when adopted by the European Council, the arm that implements policy. So far the Council has said little.

TotalEnergies has kept a brave face in the face of the far-reaching implications of the EU Parliament’s resolution that could put its $10 billion investment on hold.

The project was signed by TotalEnergies with joint venture partners CNOOC and Uganda National Oil Company in February this year.

Since passing the resolution on Sept. 15, the French oil giant has played the sovereignty card, tweeting that Uganda and Tanzania are sovereign states that have made the strategic choice to use their natural resources to contribute to their countries’ development, and as such , are not bound by resolutions of the EU Parliament.

“TotalEnergies recalls the importance of the Lake Albert/Eacop project to Uganda and Tanzania and we will do everything we can to ensure that the project is implemented with the utmost excellence in terms of transparency, shared prosperity, social and economic progress and sustainable development, including the environment and respect for human rights,” said Pouyanné.

“The EU resolution to stop the construction of the pipeline is not binding on all nations of the world, Europe, the European Commission or even a sovereign country like Uganda or Tanzania,” said Ali Ssekatawa, Uganda’s director of legal and corporate affairs Petroleum Authority.

“The progress of our project will continue, and even rigs needed for oil production have reached Mombasa and efforts are being made to bring them to Hoima and Buliisa so that they can start operations,” Ssekatawa added.

stick to a schedule

Indeed, executives from TotalEnergies and the state-owned UNOC say the projects are progressing according to plan, with site preparations currently underway for the two upstream oil production infrastructures at Kingfisher and Tilenga.

The joint venture partners – TotalEnergies, CNOOC and UNOC – are targeting commercial production of oil and gas by 2025 and are poised to defy EU calls to delay the project.

The main infrastructure of the project is a 1,443 km pipeline worth US$5 billion from Hoima in western Uganda to the port of Tanga in Tanzania.

The EU resolution builds on a series of financial and reputational crises Eacop has faced, as well as protests in several cities over the project. There were also delays and postponements due to tax disputes between Uganda and TotalEnergies.

For example, according to Peter Muliisa, chief legal and corporate affairs officer at UNOC, shareholders were expected to announce financiers who would provide the project’s debt financing before the end of July 2022.

But UNOC chief Proscovia Nabbanja says shareholders have not yet reached financial close for the project and are yet to raise equity contributions that will account for 40 percent of the $5 billion required, while the remaining portion is debt financing, which is “progressing as planned.” “

She revealed that all of the International Finance Corporation’s standards on environmental and social impact assessment, the land acquisition process and technical standards – which are critical to obtaining financing – have been met and verified by independent auditors hired by lenders.

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