TotalEnergies and CNOOC to develop $10 billion Uganda oil project

French oil group TotalEnergies and its partner China National Offshore Oil Corporation have reached a deal with Uganda and Tanzania to invest more than $10 billion in developing crude oil production in East Africa, the company said on Monday.

The Lake Albert Development Project, encompassing the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the East African Crude Oil Pipeline (EACOP) in Uganda and Tanzania, will see the construction of the world’s longest heated pipeline and make landlocked Uganda an oil producer for the first time.

The agreement was signed in Kampala in the presence of Uganda President Yoweri Museveni and Patrick Pouyanné, Chairman and CEO of TotalEnergies. “This project is a very important one for this region… This money will boost our economy,” Musevini said.

The project involves the development of oil fields, processing facilities and a pipeline network in Uganda, in addition to an export pipeline through Tanzania to carry landlocked Uganda’s crude to a port on the Indian Ocean.

The Tilenga project, operated by TotalEnergies, and the Kingfisher project, operated by CNOOC, are expected to start producing in 2025 and to reach a cumulative plateau production of 230,000 barrels per day, the French group said.

“The upstream partners are TotalEnergies (56.67 percent), CNOOC (28.33 percent) and UNOC (15 percent). Production from the oil fields in Uganda will be transported to the port of Tanga in Tanzania through the EACOP cross-border pipeline, whose shareholders are TotalEnergies (62 percent), UNOC (15 percent), TPDC (15 percent) and CNOOC (8 percent),” the company said in a statement.

Oil was first discovered in Lake Albert in 2006, but critical issues such as addressing the challenge of building the 1,443-km electrically heated pipeline to export the crude via Tanzania, led to repeated delays in the project.

"The development of Lake Albert resources is a major project for Uganda and Tanzania… We are fully aware of the important social and environmental challenges it represents. We will pay particular attention to use local skills, to develop them through training programs, to boost the local industrial sector in order to maximise the positive local return of this project," Pouyanné said in a statement.