The East African Crude Oil Pipeline (EACOP)

1 Background

1.1 The Discovery of Oil in Uganda

In 2006, Lake Albert sparked hopes in Uganda when 6.5 billion barrels of oil were discovered in the Albertine Graben, the basin of Lake Albert. Located on the border between Uganda and the Democratic Republic of the Congo, Lake Albert is the northernmost of the chain of lakes in the Albertine rift.

Oil exploration company Hardman Resources discovered Uganda’s oil at three western fields: Weraga 1, Weraga 2 and Mputa. Out of the 6.5 billion barrels discovered, only 2.2 billion barrels can be extracted. Nevertheless, the oil reserves are expected to last up to thirty years, with production peaking at 230,000 barrels a day, so the discovery brought huge economic hope for one of the poorest countries in the world.

However, Uganda needed a pipeline to get the oil from the wells to the outside world. Fourteen years after the discovery of sub-Saharan Africa’s largest oil reserve, a great deal of preparatory work has been done in preparation for the construction of the longest heated pipeline in the world. They call it The East African Crude Oil Pipeline (EACOP).

1.2 Commercial Exploitation of Uganda’s Oil

Hardman Resources and Heritage Oil began undertaking seismic studies in the late 1990s before moving on to drilling in the early 2000s on the Eastern shore of Lake Albert.

In June 2006, Hardman Resources, in partnership with Tullow Oil, drilled the Mputa-1 well, striking oil for the first time in Ugandan history and bringing the country into the international spotlight. Heritage Oil then followed through with the discovery of the Kingfisher well. Multiple oil finds, including those made by Tullow, made 2006 the year to put Uganda on the map.

1.3 Planning of Pipeline for Exportation

Uganda and Kenya originally agreed to build a joint Uganda-Kenya Crude Oil Pipeline (UKCOP) to the Lamu Port in Kenya. Tullow Oil PLC (Tullow) favoured the route through Kenya for its interests in the Turkana area. Tullow discovered an estimated 250 million barrels of crude oil beneath the dry Turkana Country surface in March 2012. The vast land in the north-west of Kenya is an awakening economic giant.

France’s Total E&P favoured the Tanzania route. It argued that it is more cost-effective and does not have the security threats that the Northern Kenyan route poses; Lamu Port presented problems and the attendant costs would be enormous for all parties. The port is exposed to south-easterly waves coming in over the banks, with the surrounding islands of Lamu, Manda, Mwamba, Chongoi and Pate unable to shelter it. The Hoima-Lamu route also hosted ecologically sensitive and fragile ecosystems, and there were additional concerns related to the pipeline’s proximity and the potential for future violence associated with the 2017 and 2022 Kenyan general elections.

A report compiled by a team of technocrats in Uganda stated that the Hoima-Tanga route is the lowest-cost option for transporting crude oil to the East African coast. It has the highest availability, as it presents the lowest environmental footprint and has the shortest scheduled waiting-time to deliver the first oil export. The report also stated that Pemba Island shelters Tanga Bay from the South-East African monsoon, reducing their wave heights to less than 1 metre (while the wave heights reach 3.5 metres off Lamu during the monsoon season). The Tanga route also avoids the Coelacanth marine park and has a minor impact on biodiversity.

In April 2016, Uganda officially announced its choice for the Hoima-Tanga route for its crude oil, preferring the Mombasa or Lamu routes in Kenya. The EACOP foundation stones were laid in Tanga and Hoima respectively in August 2017 and November 2017.

1.4 What is its Current Date for Completion?

The East African Crude Oil Pipeline was scheduled to begin in January 2017 and be completed in 2020 but was delayed due to disagreements on the provisions of the Host Government Agreement, among others. Tanzanian minister of energy, Dr Medard Kalemani, recently stated that the priorities at hand, before April 2021, would be to complete the host government agreements (HGA), shareholders’ agreement (SHA), land lease agreement (LLA), port agreement (PA), and compensation for the affected people whose lands the project will pass through.

Conclusion of the four agreements will lead to arrival at the Final Investment Decision (FID), which would set the path for the project development phase. Once FID is undertaken, the construction will begin and will take about three years to complete.

HGA was signed between Uganda and EACOP on 11 September 2020 and EACOP and Tanzania on 26 October 2020. On the Tanzania front, Dr Medard Kalemani expressed his appreciation to Total E&P for continuous commitment to the project and urged Total to fast-track the ongoing processes to ensure that construction could commence by March 2021.

EACOP is a 36-month construction project, with potential construction start and end dates of 2021-2024.

1.5 Historic Oil Timelines

The earliest reference to oil in Uganda concerned an oil seepage near Kibiro on the shores of Lake Albert, which was known to the indigenous people who lived in the area. The first contribution to the evaluation of the Country’s hydrocarbon potential was made by E. J. Wayland, a government geologist, who documented numerous hydrocarbon occurrences in the Albertine Graben in the 1920s. Oil exploration continued intermittently through the 1930s but came to a halt during the Second World War. Serious exploration work commenced again in the early 1980s with the acquisition of aeromagnetic data across the entire Graben, and the subsequent follow-up ground geophysical and geological work in the late 1980s and 1990s. Seismic data was first acquired in the Graben in 1998 and several surveys have been undertaken since. Over 100 wells have been drilled from 2002 to date and more are planned.

Early Efforts (Pre-1980)

In 1925 Petroleum Potential of Uganda was documented by government geologist E.J. Wayland, in the publication “Petroleum in Uganda” (1925). This included reports of the existence of oil seepages in Uganda. From 1936 -1956, the first shallow stratigraphic wells were drilled by the African–European Investment Company. The first deep well, Waki B-1, was drilled in 1938 in Butiaba, Buliisa, and over 20 shallow wells were drilled in the Kibiro and Kibuku areas for geological correlation. Geological surveys carried out during the 1940s and 50s established the presence of sedimentary sequences of clays and silts (Memoirs of the Geological Survey, 1959).

Period of Limited Activity (1945 – 1980)

As the Second World War set in, significant policy changes were made by colonial masters; East Africa became a zone for agriculture and West Africa for oil exploration. Post-independence political uncertainties and instability rose in the country.

Consistent and Modern Efforts (1980 – 2005)

1983. 9,578 line-km of aeromagnetic data was acquired that identified three depo centres along the entire length of the Graben.
1984. The Petroleum Exploration Project was established to spearhead exploration promotion and the acquisition of geological and geophysical data over the Graben. The first Petroleum (Exploration and Production) Act was enacted (now repealed).
1985. His Excellency President Yoweri Museveni issued policy direction for the sector on capacity building, data acquisition and promotion, and monitoring of the compliance of licensed companies.
1986. The Cooperation Agreement between Uganda and Congo (DRC) for Joint Exploration and Development of Common Fields was signed.
1987. The first Production Sharing Agreement (PSA) between Petrofina Exploration Uganda and the government over the entire Albertine Graben was signed. The Petroleum Unit in the Geological Survey and Mines Department of the Ministry transformed into the Petroleum Exploration and Production Department (PEPD). PEPD commenced a follow-up of ground geological and geophysical surveys in areas identified by the aeromagnetic data. Data acquired was used to subdivide the Graben into nine smaller exploration areas and promote the areas for investment.
1988. Universities of Colombia, Leeds, Lubumbashi, and PEPD acquired gravity data on Lake Albert in an effort to understand the Graben.
1989. Petroleum Exploration and Production regulations came into force. Petrofina Exploration Uganda’s license was not renewed.
1990. Exploration Area 3 (Semliki Basin) was licensed to Heritage Oil and Gas Limited (Heritage).

1998–2000. Heritage acquired the first 2-D seismic data in Uganda and additional data acquired in the Semliki Basin.

2001. Heritage acquired an additional 228.39 line-km of 2-D seismic data in the Semliki Basin with identified drillable prospects and confirmation of structures mapped by gravity and magnetics. Hardman Resources and Energy Africa (now Tullow Oil) was licensed Exploration Area 2 (the Northern Lake Albert Basin).

2002–2004. Turaco wells 1, 2, and 3 were drilled by Heritage and Energy Africa, reaching a total depth (TD) of 2,487m, 2963m, and 2980m respectively. One of the horizons (zones) was tested and confirmed the presence of natural gas, but it was heavily contaminated by carbon dioxide.

2003. Seismic data over Lake Albert was acquired by Hardman, Energy Africa, and Heritage.
2004. Exploration Area 1 was licensed to Heritage and Energy Africa (Tullow Oil) in July 2004. Exploration Area 3A (Semliki Basin) was relicensed to Heritage and Energy Africa (Tullow Oil) in September 2004. The Turaco-3 well was drilled by Heritage and Energy Africa, reaching 2,980m TD. Heritage acquired 390km² of 3-D seismic data in the Semliki Basin.

Recent Developments (2005 – Present)

2005/2006. Hardman and Energy Africa/Tullow Oil acquired 2-D seismic data over the Kaiso-Tonya area and the Buhuka/Bugoma area, EA 3A by Heritage. Exploration Area 5 (the Rhino Camp Basin) was licensed to Neptune Petroleum (Tower Resources). The Mputa-1 well was drilled by Hardman and Energy Africa Oil in the Kaiso-Tonya area, becoming the area’s First Discovery Well. Tullow Oil acquired Energy Africa and Hardman Resources.

2007. Dominion Petroleum was licensed to Exploration Area 4B (Lake Edward and George Basin).
2008. Cabinet approved the National Oil and Gas Policy for Uganda; its implementation commenced.

2010/2011. A feasibility study on refining was undertaken by the government; implementation commenced.

2008–2014. Twenty-one discoveries were made, 116 wells drilled, and 6.5 billion barrels of STOIIP confirmed. 499 billion cubic feet of gas was produced.

2012. The Oil and Gas Revenue Management Policy was approved, Tullow Oil finalised its acquisition of Heritage assets and farm-down to CNOOC and Total.
2013. The Petroleum (Exploration, Development and Production) Act 2013 and the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act 2013 were implemented.

The first production license was issued over the Kingfisher field.

2014. A Memorandum of Understanding (MOU) was signed between the government and licensed oil companies on commercialisation.

July 2016. It was announced that construction of the pipeline would begin in January 2017 and last 36 months. Completion of the pipeline was planned for 2020.

2017–2018. EIA studies covering both environmental and social aspects were conducted in close collaboration with all stakeholders.

25^th June 2017. Uganda and Tanzania signed the Intergovernmental Agreement (IGA).

(Uganda and Tanzania sign IGA: https://www.youtube.com/watch?v=eIviNk30rpo)

4^th September 2017. President Yoweri Museveni and his Tanzania counterpart Joseph Pombe Magufuli commissioned the construction of the 1,444km-long East African crude oil pipeline from the Hoima district in Uganda to the Tanzanian port of Tanga.

September 2019. Total suspended all work on the pipeline construction following the collapse of a deal to buy a stake in Tullow Oil Plc oil fields in Uganda.

6^th February 2020. Tanzania EIA Certificate Reception brief. Total East Africa Midstream BV (TEAM BV), the current custodian of the East African Crude Oil Pipeline (EACOP) project, received the Environmental Impact Assessment Certificate for the EACOP project activities in Tanzania: Establishment of Onshore East African Crude Oil Pipeline (1,147km), Marine Storage Terminal, Offshore Trestle Jetty and Load-Out Facility.

April 2020. The Tullow wind-down standstill was resolved, with Total reaching an agreement to buy out Tullow’s shares in the Lake Albert project licenses for 575 million USD, as well as reaching a tax agreement with the Ugandan government. Total stated at the time that the sale would allow them, together with CNOOC, to move forward towards a final investment decision (FID) on the pipeline project.

June 2020. Total confirmed its continued commitment to the EACOP project. Tanzania’s Minister of Energy stated that construction was slated to begin in April 2021.

11^th September 2020. Total S.A. and the government of Uganda signed the Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) project, at State House Entebbe.

(Uganda signs HGA: https://www.youtube.com/watch?v=6c5Yhq5Q0Ow  https://www.youtube.com/watch?v=Hj2XtJc5kEI&t=5s)

26^th October 2020. The East African Crude Oil Pipeline (EACOP) project and the government of Tanzania initialized the HGA between the Government of the United Republic of Tanzania and the East African Crude Oil Pipeline (EACOP) project. This important milestone towards the implementation of the EACOP project represented yet another successful step in the process.

11^th September 2020. The governments of Tanzania and Uganda signed an agreement on the pipeline’s construction. The agreement followed the signing of an HGA between Uganda and Total, which protects the French company’s rights and obligations in the pipeline’s construction and operation.

1.6 Planned Timelines

Final project investment decisions are expected to be issued by partners by December 2020, where construction of the project infrastructure is expected to begin in early 2021. Other pending agreements include the Shareholders’ Agreement (SHA), Ports Agreement (PA), and Land Lease Agreement (LLA). Following the global pandemic, that has had a negative impact on Africa’s oil and gas industry, the Ugandan government has officially announced that the final investment decision for the EACOP project will be signed off during the first quarter of 2021 to 21^st November 2021.

2 Pipeline Route and Key Locations

2.1 General Route

The oil pipeline begins in the sub-county of Buseruka, Hoima District, 1,120m above sea-level in Uganda’s Western Region. It will travel in a general south-easterly direction, passing through Masaka in Uganda and Bukoba in Tanzania, and loop around Lake Victoria’s southern shores.

The Lake Victoria Basin, which 30 million people depend on for their livelihoods, is one of East Africa’s most prominent landmarks. It provides the headwaters of the White Nile. It is also central to the development and regional integration of the East Africa Community and the second-largest freshwater lake in the world.

EACOP reaches a maximum elevation of 1,738m above sea-level along the Tanzania route portion when crossing the East Africa Rift zone. The pipeline continues through Shinyanga and Singida town and terminates at the Port of Tanga—the most northerly port city of Tanzania, on the west of the Indian Ocean.

The Ugandan section of the pipeline will be approximately 296km long, starting near Hoima (close to Lake Albert) and traversing ten districts and 25 sub-counties to the Tanzanian border between Masaka and Bukoba. The Tanzanian section will comprise approximately 80% of the pipeline’s total route length. It will run for approximately 1,147km from the Uganda-Tanzania border and traverse eight regions and twenty-five districts to terminate at a peninsula north of Tanga in Tanzania.

2.2 Upstream Exploration Locations

Uganda’s Energy Minister, Mary Goretti Kitutu, said that construction work has begun at the Kingfisher and Tilenga oil fields in Uganda. The China National Offshore Oil Corporation (CNOOC) and French fossil fuel giant Total intend to sink over 500 wells. The companies have already spent an estimated 4 billion US dollars in infrastructure on the pipeline.

The Kingfisher oil field, discovered in 2006, will be one of the first major upstream oil projects to be developed in Uganda. CNOOC Uganda operates the southern Kingfisher field on the eastern bank of Lake Albert. The Kingfisher oil field development will be comprised of 4 well pads, 20 production wells, and 11 water injection wells. The Kingfisher project’s crude output will either be refined at the proposed Kabaale refinery for domestic use or transported to the Tanga Port in Tanzania through the proposed EACOP for export to international markets.

Total operates the project’s northern Tilenga field, stretching into Murchison Falls, Uganda’s largest national park.

The Tilenga project refers to the development and production of oil fields within Murchison Falls National Park (MFNP): north of the Victoria Nile in the Nwoya District, and south of the Victoria Nile in the Buliisa District. The project comprises 6 fields with 34 well pads where 400 oil wells will be drilled, and will employ an estimated 6,600 workers.

2.3 Termination Depots and Export Facilities

EACOP’s marine export storage terminal and the load-out facility will be located north of Tanga Port over the Chongoleani peninsula. The marine storage terminal will include a 2km-long trestle and an oil loading platform for oil tankers. The terminal will consist of five 500,000bbl heated storage tanks, with additional area for future 500,000bbl tanks to maintain oil at temperatures above 63°C.

Port Tanga is historically the oldest operating harbour in the nation, with its roots dating back to around the 6th century. There are existing roads and railways and available land for marine terminals and yards. The marine terminal has the capability of exporting 1,000,000 barrels in 24 hours into SUEZMAX class tanker.

3 Pipeline and Crude Specifications

3.1 General Structure

The 1,444km-long EACOP system, consisting of a 24-inch-wide carbon steel pipeline, will be buried to a depth of up to 2 metres along most of its route. The oil from the Lake Albert basin has a very high viscosity. The entire pipeline will be thermally insulated with polyurethane foam (PUF), and electrical heat tracing (EHT) will be installed. The heating system consists of EHT cables powered through a buried high voltage cable (33kV) that feeds EHT substations and mainline valve sites along the route to maintain a minimum temperature of 50° Celsius along the entire pipeline length so that the wax remains in solution. The EHT cables (6.6kV) provide up to 30W/m of heat. The pipeline will be insulated with 70mm of polyurethane foam (PUF) material for heat retention.

For precautionary purposes, the pipeline is specified with a fusion-bonded epoxy anti-corrosion coating applied to protect the pipe throughout its operational life against external corrosion. This fusion-bonded epoxy coating will act as a second barrier in water ingress below the bonded thermal insulation system.

3.2 Pump Stations

The pipeline will be buried at a depth of 1.8–2 meters along most of its length, though it will be buried deeper at river and road crossings. The only elements of the pipeline infrastructure that will be visible are the pumping stations, electrical heat tracing stations, block valve stations, marine storage terminals (MST) and loading facilities; these are known as Above Ground Installations (AGIs).

While the product begins its journey with natural pressure, it loses momentum over time and distance due to friction losses. Pumping stations are positioned throughout the pipeline’s length to intermittently boost the pressure, pumping the product along the line and monitoring the flow and other relevant information about the crude transfer. EACOP will have a total of six pumping stations and two pressure reduction stations.

Uganda’s 296km pipeline section consists of two pumping stations to keep the oil moving. It also has nineteen valves at critical locations where the oil flow can be reduced or stopped as well as electrical substations that are collocated with valves to power the electrically heated cable.

Tanzania’s 1,149km pipeline section consists of four pump stations. Two pressure reduction stations (PRS), fifteen prefabricated electrical heat tracing (EHT) substations and an integrated SCADA/ICS system with redundant control functions at Tilenga and the marine storage terminal via fibre-optic cabling and telecommunications.

Pump station locations are determined by pipeline hydraulics, taking into account factors such as pipe size, topography, frictional losses related to oil flow, and the location of other pumps in the system. Selection of pump station locations also considers proximity to roads and power lines, land use, and environmental characteristics.

Each pump station will require a total area of 310×400 m, plus a 50×50 m helipad. Each pump station will establish security facilities and an emergency evacuation area outside the pump station fence. The emergency pipeline repair system (EPRS) will most likely be at PS3 and 5 and the marine storage terminal (MST), or close to existing industrial activities near the EACOP route.

Pump Station #3 is approximately 105km from the Border of Uganda. Pump Station #4 is 205km from Pump Station #3 and 214km from Pump Station #5. Hydraulic spacing is due to a gradual elevation descent of 143m over the 419km distance.

The elevation of Pump Station #5 is the lowest of all four stations, with an elevation ascent of 454m before reaching Pump Station #6. The permanent access road of approximately 800m is also the shortest of all of Tanzania’s facilities. Each pump station is self-contained with its power generation.

3.3 Elevation

The pipeline will be buried at a depth of 1.8–2 meters deep along most of its route.

3.4 Heat Tracing

Uganda’s oil has a high viscosity, making it difficult to transfer. The EACOP will include heat tracing to increase the crude oil’s temperature above its pour point and, as much as possible, above the temperature at which it has a thick waxy appearance, making it possible to transport.

Temperatures will be maintained at 50°C by a combination of PUF insulation and an EHT system. Bulk heaters may be installed later in field life to manage the temperature losses in the pipeline. The EHT system consists of three heat-tracing electric cables inserted through three dedicated aluminium channels within the typically 70–80mm-thick PUF insulating material, protected by a high-density polyethylene extruded covering. The EHT system and bulk heaters will only need to operate for flow conditions lower than the design capacity and as required during start-up, maintenance, or when there may be no flow.

Due to the oil’s nature—the pipeline would need to keep the oil warm enough to flow in an uninsulated pipe—35 oil-powered heating stations would be needed. However, this number of heating stations (which will be placed in Tanzania) can be reduced to only two by insulating the pipeline. Insulation will mean a higher initial cost, but less impact on people and the environment, and a lower long-term cost over the project’s lifetime.

Three types of insulation were considered: foam made from a man-made resin (polyurethane), glass, and pipe within another pipe. Polyurethane foam was chosen as the best option, as it gives the best insulation at the lowest cost.

The EHT system will receive power from three high-voltage electrical power cables buried in a dedicated trench, parallel to the pipeline trench. Power Station #3 and #5 will supply power and the MST. They will install electric substations at 50–60km intervals along the route to transform electricity from the high-voltage power cable to the voltage of the heat tracing system.

Construction will lay a main fibre-optic cable in the same trench above the pipeline over the full distance. This cable is designed for communications and transmission of control data between AGIs. The fibre-optic cable will also be used for pipeline leak detection and, as an option, intrusion detection. During the construction phase, they will install a second fibre-optic cable for strain detection in areas prone to faulting or risk of landslides.

4 Financials

4.1 Capex

The EACOP project is estimated to cost $3.5bn and is built to transport crude oil from Uganda’s oil fields in Hoima to the Tanzanian port of Tanga.

The 1,444km planned pipeline is expected to be built at a budgeted cost of US$3.5 billion. Thirty percent of the project costs are expected to be provided by the equity investors in the project, with the remaining US$2.5 billion to be provided via project finance loans.

Negotiations and the search for international lenders are ongoing. The Standard Bank of South Africa is advising Uganda and Tanzania, while Sumitomo Mitsui Banking Corporation is advising Total SA. The London-based law firm Clifford Chance is advising Total SA on legal matters, while the Industrial and Commercial Bank advises CNOOC of China. The Standard Bank of South Africa and Sumitomo Mitsui are also acting as joint lead arrangers for the project loan.

In April 2020, the African Development Bank (AfDB) publicly responded to a letter sent by a coalition of civil society organisations asking the bank not to fund the project. In its response, the AfDB denies that it ever considered funding the project.

4.2 Schedule

The East African Crude Oil Pipeline project will take full responsibility for the construction, maintenance, operations, and safety of the pipeline, as outlined in a comprehensive set of regulations.

5 Ownership and Stakeholders

5.1 Historic Ownership Changes

As of August 2017, the list of potential equity partners includes Uganda’s government (represented by Uganda National Oil Company), the government of Tanzania (represented by the Tanzania Petroleum Development Corporation), Total SA, Tullow Oil, and China National Offshore Oil Corporation (CNOOC).

5.2 Current Ownership

In April 2020, Tullow Oil Plc sold its interests in Uganda’s Lake Albert development project, including the East African Crude Oil Pipeline, to Total SA, for US$575 million. As of April 2020, the owners of the EACOP are Total SA (with 45%), Uganda National Oil Company (UNOC) (15%), China National Offshore Oil Company (CNOOC) (15%), and Tanzania Petroleum Development Corporation (TPDC) (5%).

5.3 Taking Oil to Market

Tanzania and Uganda agreed in March 2016 that a pipeline to transport crude oil from the Lake Albert basin in West Uganda to the markets overseas be routed through the Port of Tanga. Once extracted, the oil will be partly refined in Uganda, to supply the local market, and partly exported to the international market via the EACOP. The crude oil, transported by the pipeline, will be stored in the Terminal located on Chongoleani in Tanga bay, before being shipped and sold to other countries.

6 Contractors

The front-end engineering and design (FEED) contract for the project was awarded to the US-based Gulf Interstate Engineering (GIE) company in December 2016. The FEED was officially launched in January 2017 and completed in February 2018.

6.1 Construction (EPC Contractors and Key Sub-Contractors)

The Engineering, Procurement and Construction Management (EPCM) contract was awarded to WorleyParsons (now Worley Limited), and the UK, working with Newplan Engineers and Infra Consulting Services from Uganda together with Norplan Tanzania and Inter Consult Ltd from Tanzania.

The stakeholders of the pipeline project, which is estimated to cost £2.7bn ($3.5bn), are the Uganda National Oil Company (UNOC), the Tanzania Petroleum Development Corporation (TPDC), CNOOC, Total and Tullow Oil. Total agreed to buy Tullow’s stake in the pipeline in April 2020.

6.2 Record of Decision (i.e., When the Go-Ahead Happened)

The review process for the EACOP ESIA began on 15^th January 2019 when the project proponents made the initial submission. According to regulations, the ESIA review period can last up to 6 months.

Total East Africa Midstream BV (TEAM)—as the project development proponent with national and international environmental practitioners from RSK and Eco & Partner Consult—have undertaken the EACOP project ESIA. In consultation with the lead agencies, NEMA is responsible for the review and approval of the ESIA.

6.3 Key Findings and Recommendations/Mitigations from ESIA Reports

In a 2017 report, WWF Uganda warned that the EACOP pipeline “is likely to lead to significant disturbance, fragmentation and increased poaching within important biodiversity and natural habitats” populated by elephants, lions, and chimpanzees that are on the international Red List of threatened species. It “has a greater environmental and social risk” than other pipelines planned in the region, said Paolo Tibaldeschi (of WWF Norway and author of the 2017 report) as it is “longer, crosses a hilly and seismic region near Lake Victoria, and several biodiversity habitats down to the coast,” he noted.

Nearly a third of the planned pipeline (460km) will be constructed in the basin of Africa’s largest lake, Lake Victoria. More than 30 million people depend on Lake Victoria for water and food production. The pipeline also crosses several rivers and streams that flow into the lake, including the Kagera River. The Kagera River is the most crucial incoming river of Lake Victoria.

Possible spills from the pipeline due to inadequate maintenance, accidents, third-party interference or natural disasters, risk freshwater pollution and degradation in this area—a likelihood that is even greater since the area around Lake Victoria is an active seismic area.

Uganda is earthquake-prone. For example, on 7^th September 1990, an earthquake in Lake Victoria measuring 5.0 on the Richter scale destroyed semi-permanent buildings. On 9^th October 1991, an earthquake in the Lake Albert area measuring 5.3 on the Richter scale caused similar destruction. This creates a greater risk of natural disasters in the area around the pipeline

The pipeline route also traverses several heavily populated districts in Uganda and Tanzania, and large-scale land acquisition and resettlement are expected due to pipeline construction and its associated oil extraction and infrastructure, on both a temporary and permanent basis. Between 9,500 and 14,500 farms are estimated to be affected by construction in Tanzania alone.

The first 20km of the pipeline project traverses areas mapped as having medium, high, and very high species richness. The 160km Lake Albert provides 30 per cent of Uganda’s fish catch. On Lake Albert’s eastern shore, the NCEA’s analysis states that the Kingfisher project leaves the future of the 400-square-kilometre Bugoma Forest—which has been protected for 90 years and has a large population of chimpanzees—looking “bleak”. The forest faces encroachment by pipelines, roads, an airport, and migrants who will come to work on the project and will likely clear land to grow crops and cut trees for charcoal.

The EACOP project is located within 100m of the Wambabya Forest Reserve. The Wambabya reserve has the highest population density of chimpanzees in the Albertine Rift. The Tilenga feeder pipeline also lies within 200m of Maseege Forest Reserve. This forest is part of a wildlife movement corridor between Lake Albert and Murchison Falls National Park and is valuable for wildlife connectivity. Another reserve, Bugungu Wildlife Reserve, holds the Tilenga feeder pipeline route corridor. Bugungu Wildlife Reserve is maintained for wildlife and tourism and classified as a natural monument. Despite intensive poaching, this reserve supports Uganda’s kob, buffaloes, waterbucks, warthogs, and baboons.

Furthermore, EACOP is 3.7km north of the Bugoma Forest Reserve, which supports 38 species of mammals (of which, four are globally threatened) and 257 species of trees and shrubs. The Tilenga feeder pipeline will also be within 500m of the Bujuwe Forest Reserve. This reserve comprises pine and eucalypt plantations and is used for subsistence farming. The EACOP project’s 2km-wide corridor also traverses a short section of the Kansana-Kasambya Forest Reserve. This part of the reserve is exclusively made up of pine tree plantations that are commercially harvested.

Across the border in Tanzania, the pipeline splits the Biharamulo game reserve, which contains one of the world’s last five populations of ashy red colobus monkeys, hippopotami, elephants, zebras, and (tour companies claim) mountain gorillas. Further east, it will traverse 32km of the Wembere Steppe: a seasonally flooded grassland known for its birdlife. Outside the reserves, WWF says, 510 square kilometres of elephant habitat is likely to be disrupted.

6.4 ESIA Report

Where the oil industry is operating outside of communities, degradation of the Lake Albert region’s ecological biodiversity is under threat by poor environmental governance. The pristine natural environment and rich wildlife of the Albertine Graben, along with eco-tourism in Murchison Falls National Park, is under threat if the industry does not follow the international environmental standards.

Since Uganda’s oil is waxy, infrastructure requirements are more extensive and will leave a large footprint on the natural environment. EACOP will need additional powerplants to deal with the heating, storage, and transport of oil. The shallow depths of the oil wells and weak natural flow pressures will require significant water injection for oil extraction.

In June 2019, the Netherlands Commission for Environmental Assessment (NCEA) published an independent quality review of the Ugandan part of the Environmental and Social Impact Assessment (ESIA) of the project, following a request from the Ugandan National Environmental Management Authority (NEMA). The NCEA concluded that “the ESIA report does not yet provide enough information for sound decision making”, citing exaggerated claims about jobs and other economic benefits, significant potential adverse impacts to wetlands due to open trench water and wetland crossings, unsubstantiated claims of negligible impacts on land ownership, and poor treatment of energy/CO2 impacts. The project will allegedly “displace thousands of small farmers and put key wildlife habitat and coastal waters at risk”.

Civil society organisations have petitioned funding agencies not to support the project, citing potential social and environmental harm that the pipeline will cause. Maria Isabel Cubides, a researcher at FIDH’s globalization and human rights desk, stated that “individuals and communities whose property has been confiscated for the project want more information and fair compensation for lost land and property. Families worry that oil projects are shattering their community structures and undermining their traditional lifestyles and cultures”.

Onshore oil projects require extensive amounts of land, and these projects are no exception. Land acquisition—a national priority for both Uganda and Tanzania governments—is set to impact hundreds of families around Lake Albert and over 12,000 families along the midstream route. Communities along the pipeline route shared similar fears with Oxfam’s partners as explained in Empty Promises Down the Line?. They expressed concern about the level of social services in the new resettlement villages as well as access to water, electricity, the security of tenure, and roads.

There is precedent for their concerns: resettlement camps for the Kabaale industrial park around Lake Albert built under the responsibility of authorities consist of compounds with open-pit latrines, poor hygiene and sanitation standards, low-quality farming land, lack of ownership titles, and limited public service provisions, as detailed in FIDH’s report New Oil, Same Business?. Residents around the Kingfisher and Tilenga fields denounce an increasingly limited amount of available drinking water and the destruction or contamination of individual drinking wells by road construction and exploration activities. The publication, Empty Promises Down the Line? documented the concerns of communities interviewed along the pipeline route about a potential increase in water-related diseases and potential outbreaks of typhoid, dysentery, and cholera in project areas.

Any oil spill into Lake Albert, Lake Victoria, or Murchison Falls would entail grave consequences for the region’s unique ecosystem and the communities who rely on it. The watersheds from both lakes are vital to tens of thousands of people across East Africa. The remoteness of the oil wells and the pipeline would make cleanup activities particularly challenging, notwithstanding the crude’s high wax content. Pipeline construction poses significant risks to water bodies, especially where pipes need to be buried.

Moreover, the pipeline will transport the oil over the mangrove and sensitive coral reef area. There are complex coastal environments, Pemba-Shimoni-Kisite reserve on the border with Kenya, and the Tanga Coelacanth marine park known for their coral reefs, dugongs, dolphins, and sea turtles. Near the Tanzanian port of Tanga, they will load tankers up to 300 meters with crude oil. The risk of pollution may be the greatest around the pipeline’s ocean terminal on the Chongoleani peninsula near the Tanzania port.

Oil production in East Africa might bring welcome investment to Uganda and Tanzania but it has already been preceded by significant disruptions for the communities impacted by current and proposed projects. Unfortunately, many communities around Lake Albert and downstream are worried about the empty promises of oil money. While these reports reflect people’s concerns directly impacted by oil development in Uganda and Tanzania, many impacted communities and human rights defenders do not have the space or freedom to challenge or question these projects directly.

For these oil projects to move forward, companies, financing institutions, and governments must reconsider their approach and put communities at the centre of their decision-making. Our organisations urge companies to take further measures before the final investment decision is made, to avoid human and environmental disasters around Lake Albert or down the line.

7 Economic Impact on Uganda and Tanzania

7.1 Job Creation

Uganda’s Minister for Energy & Mineral Development, Hon. Mary Goretti Kitutu, made the declaration during the sixth edition of East Africa Oil & Gas Summit 2020 that the EACOP project will create 10,000 jobs. Minister Medard Kalemani challenged Tanzanians to be prepared, saying there will be 5000 jobs during construction of the Pipeline and 1500 jobs when construction is completed.

Available data show that Tanzania has so far managed to register 255 firms that are earmarked for various tenders related to the crude oil pipeline and other related projects. The pipeline will create short-term employment during construction (2-3 years) and skills development that can be used in other infrastructure projects and activities. It is expected that casual workers who are willing and able to be involved in the construction phase of the proposed project will be sourced locally, from the project’s vicinity, which will further promote the development of local capacity.

Local content plans are being developed in each country to guide the implementation process. It is expected that the Pipeline will provide training for people involved in its implementation, from welders through to pipeline operations staff, who will primarily comprise nationals, sourced locally from the vicinity of the project. In doing so, this increase in their capacity will benefit these groups in the long-term since they will work for similar projects or other industries in the future.

7.2 Estimated Contribution to GDP

It is projected that the EACOP project will result in an over 60 per cent increase in foreign direct investment (FDI) in Tanzania and Uganda during the construction phase. While visibility on the FID’s timeline remains unclear, the project is very competitive even in a depressed, low-oil-prices environment. Indeed, the cost per barrel of the integrated Lake Albert Development Project is estimated at around $50.

While Total is following a global trend of drastically cutting expenses in light of the COVID-19 pandemic and the collapse of oil demand and oil prices, the project’s economics make it one of the most likely to receive FID soon.