New boss determined to pump out Uganda’s oil in four years
Kampala, Uganda | RONALD MUSOKE | Philippe Groueix took over from Pierre Jessua on Sept. 01 as the General Manager of TotalEnergies EP Uganda with one critical goal on his mind: commercializing Uganda’s oil resources by 2025.
Uganda first discovered its oil in 2006 and currently has about 6.5bn barrels of oil in place out of which 1.4bn barrels are said to be recoverable or open to exploitation. But, it has been 15 years of back-and-forth negotiations between the government and oil company executives on the best commercialization strategy.
TotalEnergies acquired a stake in the Lake Albert fields in 2012— a development which put Uganda at the centre of the French oil major’s East African strategy. But since then, three of Groueix’s predecessors have come and gone with little success. The big question is; will he succeed where his forerunners, Pierre Jessua, Adewale Fayemi and Francois Rafin failed?
Groueix who holds a Master of Science Degree in Electronics from ENSEEIHT-Higher Education Institute in France joined TotalEnergies in 1990 and is described as “a seasoned and highly skilled oil and gas professional with over 30 years’ experience within TotalEnergies.”
Groueix is recognized for having successfully and safely managed large development projects associated with complex operations including his recent assignments in Gabon, Indonesia, Bolivia and Denmark.
Prior to his assignment to Uganda, Groueix was Managing Director of TotalEnergies EP Denmark, a large operating affiliate in the North Sea with an ongoing US$ 3bn major redevelopment project of Tyra field.
Much earlier, he was the Managing Director of TotalEnergies EP Bolivia from December 2017 to March 2020. Before the Bolivia post, Groueix had worked for four years as Executive Vice President for the French affiliate in Indonesia. But it appears his biggest task will be unlocking Uganda’s petroleum resources.
Huge task in Uganda
Glimpses of what exactly Groueix intends to do over the next 40 months came out during his Sept. 28 address of the Uganda International Oil and Gas Summit held virtually.
“We have made a commitment to work with all our stakeholders to ensure that the Tilenga, Kingfisher and EACOP projects deliver the intended benefits to the local communities, business sector and Uganda at large,” Groueix said referencing Uganda’s flagship oil projects, two of which are led by the French oil major, TotalEnergies. The Kingfisher project is under the solo stewardship of the Chinese oil giants, CNOOC.
The Tilenga project valued at US$4bn is located in Buliisa and Nwoya districts and is operated by TotalEnergies (56.6%), in partnership with CNOOC and Uganda National Oil Company (UNOC). It includes the development of six fields and the drilling of around 400 wells from 31 locations.
The EACOP, on the other hand, valued at US$ 3.5bn consists of the construction of a buried 1,443 km oil pipeline between Kabaale in Uganda and the Indian Ocean port of Tanga in Tanzania.
One of the fields scheduled for development is located inside Murchison Falls National Park while the others are outside the park, south of the Victoria Nile. The global conservation non-profit—the International Union for Conservation of Nature’s (IUCN) red list—shows how TotalEnergies’ project is in an area which hosts 14% of all of Africa’s amphibians and 52% of the continent’s birds, 35% of all butterflies and 39% of all mammals.
Some of the roads in Murchison Falls National Park are already being widened and conservationists say such activity might become an obstruction to animals like elephants. Others say an increase in traffic in the park could potentially increase the number of wildlife fatalities.
The other project, the East African Crude Oil Pipeline (EACOP), consists of construction of a buried 1,443km oil pipeline between the town of Kabaale in Uganda and the port of Tanga in Tanzania, and a storage terminal and loading jetty in Tanga.
The oil pipeline includes six pumping stations, powered by solar plants in Tanzania and a heat tracing system. Both projects are, however, located in or traverse a particularly sensitive natural environment teeming with rare animals and plant life.
For both projects, TotalEnergies says it is up to the challenge. Groueix adds that TotalEnergies’ has the commitment to developing low-cost resources with a low carbon footprint in the most socially and environmentally responsible manner.
“Our ambition is to be a world class player in the energy transition; we are committed to producing and providing more affordable, reliable and clean energy solutions.” Groueix said oil and gas remains a key part of the energy mix and will enable the energy transition.
His predecessors have told The Independent that the two projects have been well designed and the French firm will carry out activities in compliance with company, national and international standards specifically the International Finance Corporation (IFC) performance standards.
TotalEnergies published a statement early this year saying its aim is to limit its Tilenga project’s footprint within Murchison Falls National Park in line with the “Avoid-Reduce-Compensate” principles that underpin its 2020 Biodiversity Policy.
The company said it is also committing to implement action plans designed to produce a net positive impact on biodiversity in the development of these projects. These plans will be defined in close cooperation with the authorities and stakeholders in charge of nature conservation in Uganda and Tanzania.
“We acknowledge that Tilenga and EACOP projects represent significant social and environmental stakes, which we are taking into consideration responsibly,” Patrick Pouyanne, the chairman and CEO of TotalEnergies, said in statement on March 08.
“We are mobilizing substantial resources to ensure that these projects are carried out in an exemplary manner and create value for the people in both countries.
TotalEnergies’ first oil promise
On April 11, this year, TotalEnergies’ CEO and Chairman, Patrick Pouyanné, sat calmly alongside President Yoweri Museveni, Tanzania’s Samia Suluhu Hassan and CNOOC Uganda President, Chen Zhuobiao, at State House, Entebbe, as three key agreements necessary to commercialize Uganda’s oil were finally signed.
These included; the Host Government Agreement, the Shareholders Agreement and the Tariff and Transport Agreement. With the agreements now in place, the government and oil company executives said approval and award of contracts for the engineering, procurement and construction to contractors would begin in earnest.
In June, this year, TotalEnergies EP Uganda signed conditional letters of award for the main surface facilities for engineering, procurement, supply, construction and commissioning (EPSCC) as well as five drilling packages for the Tilenga project located in Nwoya and Buliisa Districts.
The awards went to a consortium comprising CB&I UK Limited (a McDermott Company) and Sinopec International Petroleum Service Corporation (SINOPEC) for the engineering, procurement, supply; construction and commissioning (EPSCC) of the Central Processing Facility (CPF), flowlines, and other associated surface facilities. Other firms that have received contracts include; Schlumberger Oilfield Eastern Limited for three well engineering packages; Vallourec Oil and Gas France and ZPEB Uganda Co. Limited.
“Thanks to this first step, the Tilenga project development phase has a target to achieve first oil in 43 months. All the companies will deploy their years of expertise and best-in-class technology to delivering the project while also ensuring sustainable value retention in the economy through promotion of national content,” said Pierre Jessua, TotalEnergies EP Uganda’s immediate former General Manager.
Groueix says the signing of those agreements have paved the way for a change of pace in the Lake Albert Development Project. He says, in the case of Uganda, he awaits the “last piece of the puzzle.”
These include; the outstanding joint venture approvals and the passing of the enabling legislation (EACOP) bill, Public Finance Management bill and the Income Tax Amendment bill that is before Parliament. Across in Tanzania, he is also waiting for the passing of the corresponding EACOP enabling legislation in Tanzania.
“We have acquired 100% of the land needed for the construction of the Tilenga Industrial Area, and signed a number of CLOAs (conditional letters of award) with the main EPC contractor and various drilling packages which enabled us to start early works and site preparation activities,” he said.
“We are now moving to land acquisition for sites outside the industrial area including compensation of project affected persons under resettlement action plans.” Groueix says this will enable them have access to the land needed for the construction of well pads, feeder pipelines, access roads and other infrastructure.
He says the common objective for both the upstream projects and the EACOP is to maintain an aligned schedule between the upstream projects (Tilenga and Kingfisher) and the midstream (EACOP) to achieve first oil, targeted for 2025.
Groueix says TotalEnergies is focused on ensuring the maximization of use of Ugandan national content, based on three pillars—local companies providing goods and services capacity enhancement including training and technology transfer.
Going forward, Groueix says TotalEnergies is committed to progressing the detailed engineering and execute the procurement of long lead items, progress land acquisition and various activities including implementation of various environmental and social management plans.
“We have also ramped up recruitment activities which will be complemented by knowledge transfer from some of the experts within TotalEnergies that will be deployed from around the world to support the development of the project.”
“We have about 700 Ugandans working directly or indirectly on the projects and are based both locally and internationally. Some of our national content initiatives include welder and heavy goods driver trainings, supplier development workshops, industry enhancement centre development.”
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