IN a recent interview, Proscovia Nabbanja, the CEO of Uganda National Oil Company (UNOC), shared promising updates regarding Uganda’s Tilenga and Kingfisher petroleum projects, as well as the East African Crude Oil Pipeline (EACOP), revealing that they are on schedule for first production by 2025.
Nabbanja confirmed, ‘Tilenga is still on track,’ highlighting the arrival of three drilling kits in the country. Additionally, she noted the positive progress of Kingfisher, with three wells already drilled, and four wells underway for Tilenga.
The pivotal 1,445-kilometre East African Crude Oil Pipeline (EACOP), designed to transport crude oil from Tilenga and Kingfisher to Tanzania for export, is also expected to become operational in 2025. EACOP is a collaborative effort between the government of Uganda, TotalEnergies of France, CNOOC from China, and Tanzania Petroleum Development Corp (TPDC) in Tanzania.
Uganda has been in advanced discussions with the Chinese export credit agency, SINOSURE, to secure the necessary credit for the project, which comes with an estimated cost of $5 billion, including credit expenses. A senior Ugandan official disclosed that 40% of the required funds will be sourced through debt, while the remaining amount will be raised through equity.
Nabbanja acknowledged the challenge of climate concerns affecting the pool of financing available for oil and gas projects. Nevertheless, she expressed optimism, stating, ‘We still believe we should be able to pull off the financing we require across the different projects.’
The journey towards these projects has not been without controversy, as five activist groups filed a second lawsuit against TotalEnergies in a Paris civil court in June. The lawsuit accuses the oil major of failing to adequately protect people and the environment in connection with the Tilenga and EACOP projects.
Regarding the lawsuit, Nabbanja refrained from commenting but praised TotalEnergies as ‘a prudent operator.’ She emphasised that environmental considerations have been a priority since the inception of the projects. She added, ‘So I feel it’s a little bit unfair for the pushback across the project because I think all partners are aligned, and the two governments, Tanzania and Uganda, are aligned because we are there and we see the fundamental change the projects have made in the communities even before the first drop of oil comes on.’
As Uganda and its international partners forge ahead with these projects, they continue to navigate environmental concerns and financial challenges on the path to realising their significant potential for economic development and energy exports.
