Uganda Looks to Chinese Backers After Pipeline Funders Withdraw

28 September 2023

Harare — Uganda is in the closing stages of talks with Chinese bankers to help fund a contentious pipeline project after some Western partners withdrew, a top official said on Wednesday, the East African reports.

The multibillion-dollar project is being led by French energy company TotalEnergies, which will construct oilfields in Uganda and transport the crude through a 1,445-kilometer (900-mile) pipeline to a port in Tanzania.

Human rights organizations and environmental activists, who claim the plan will endanger delicate ecosystems and the livelihoods of tens of thousands of locals, criticized the plan.

At least 26 Ugandans filed a lawsuit against French oil firm TotalEnergies in Paris, France, seeking compensation for alleged human rights abuses at the company's huge megaprojects there. Two enormous TotalEnergies projects, the East African Crude Oil Pipeline (EACOP) project, a 1,500km pipeline bringing crude oil to the Tanzanian coast through a number of protected nature reserves, and the Tilenga exploration of 419 oil wells, one-third of which are in Uganda's largest national park of Murchison Falls, are at the centre of their complaint before the Paris court.

The government vowed to move through despite the resistance, and TotalEnergies said that procedures were followed to protect the environment and fairly compensate those who have been displaced by the project.

With a 62% ownership in the pipeline, TotalEnergies is the largest shareholder, while state-owned oil corporations from Tanzania and Uganda each own 15%, and China National Offshore Oil Corporation owns eight percent. The pipeline is part of a U.S.$10 billion plan to develop Lake Albert's oilfields in Northwestern Uganda and transport the crude to global markets via Tanga, Tanzania's port on the Indian Ocean.

A total of 6.5 billion barrels of crude are believed to be beneath the lake, of which 1.4 billion barrels are currently thought to be recoverable. Nearly 20 years after the reserves were discovered, Uganda's first oil is anticipated to flow in 2025. President Yoweri Museveni praised the project as an economic windfall for the landlocked nation, where many people live in poverty.

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