Monday April 8 2013

Total roots for oil pipeline in Uganda

By Frederic Musisi


France’s Total SA (TOT) is encouraging government to approve its plans of constructing a crude pipeline, as an optional venture to a refinery.

Once approved, the oil giant has ambitions of laying a pipeline to South Sudan (where it is already operating) en route to Kenya for refining and export purposes.

Ms Ahlem Friga-Noy, the Total corporate affairs manager, told this newspaper that together with its partners—Tullow and CNOOC— Total is of the view that sufficient resources are available in the Lake Albert Graben in support of an appropriate sized refinery consistent with the local demand, supplies to power/industry and an international crude oil export pipeline. “This, in our partners’ view, is key to underpinning the National Development Plan and future success for the oil and gas sector in Uganda,” Ms Friga said.

She added that Total understands government’s need for a refinery and its strategic value for Uganda, but it is of the view that an oil export pipeline be combined with an optimally sized refinery to provide maximum benefit to the wider economy.

“Discussions at the highest level have been held between the Ugandan authorities and the three oil companies on this issue,” she said, adding: “We are hopeful that parties will soon reach a convergence of views on the development and the commercialisation scheme.”

As to whether government will agree to this move, Ms Friga said that since both parties were currently locked in negotiations, it was ‘too technical and premature’ to arrive at any conclusions.

The oil firm which entered Uganda in 2010 after the farm down by UK’s Tullow PLC, views the crude pipeline as a feasible and cost effective project compared to a refinery that necessitates heavy infrastructure upgrading, among other establishments, currently not in existence. “It is true that shared regional infrastructure (pipeline) will trigger synergies and cost reduction benefits to the different stakeholders,” Ms Friga said.

Officials from the government’s petroleum department confirmed the ongoing consultations with the stakeholders but declined to give further information.