TotalEnergies, CNOOC partner to develop crude oil production in East Africa

French oil group TotalEnergies and China National Offshore Oil Corporation (CNOOC) have signed a monumental deal with Uganda and Tanzania to invest over $10 billion in developing crude oil production in East Africa. The agreement is set to have a transformative impact on Uganda's oil sector, creating a ripple effect across the region and the continent. This long-awaited deal, which has been in the works for the past 12 years, marks a significant milestone for the countries involved and presents a multitude of opportunities for economic growth and job creation. Emmanuel Mugarura, CEO of the Association of Uganda Oil and Gas Service Providers, shared insights on the implications of this partnership. Mugarura expressed his excitement, stating that the $15 billion investment, which also includes plans for the refinery, is set to jumpstart various projects in the region. The breakdown of the deal includes $3.5 billion for the pipeline, $7 billion for upstream work in Kingfisher and Tilenga, and an additional $2 to $3 billion from exploration projects by Nigerian and Australian companies. This significant investment is not only poised to boost the oil sector but also spur growth in ancillary industries, from agriculture to logistics, creating an estimated 160,000 jobs over the next five years. One of the key decisions in this partnership was Uganda's choice to collaborate with Tanzania for oil exports, deviating from the initial plan to export through Kenya. Mugarura highlighted the challenges associated with the Kenyan route, citing congestion at the port of Mombasa and the high costs of compensation due to urban development. Ultimately, Tanzania emerged as the more favorable option, offering a strategic route with favorable tariff terms, setting the stage for a fruitful partnership between the two nations. Despite the promising prospects of this endeavor, concerns linger over the timeline for the commencement of commercial oil exploitation in Uganda. Mugarura explained that while construction and infrastructure development are estimated to take around four years, uncertainties around procurement processes and project execution could impact the timeline. The intricate nature of such projects, coupled with the need for meticulous planning and coordination, underscores the importance of efficient project management to ensure timely delivery and optimal outcomes. As Uganda embarks on this transformative journey with TotalEnergies and CNOOC, the spotlight now shifts to the effective implementation of the investment deal and the realization of its vast potential. The partnership holds the key to unlocking economic opportunities, driving job creation, and positioning Uganda as a significant player in the global oil market. With careful planning and steadfast commitment, Uganda's oil sector is poised to soar to new heights, catalyzing growth and prosperity for the nation and its people.