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Q&A: Inside Oil Firm Total E & P’s Drive into Murchison Falls National Park

Uganda is eager to realise oil production by 2020.

The French oil firm, Total E & P, which is leading the development activities towards production in the Tilenga Project Area Exploration Area 1 (EA-1) and Exploration Area 2 North (EA-2N) within the Albertine Region, says the industry is progressing steadily towards the achievement of a Final Investment Decision and towards the first oil about 36 months later.

In an interview with ChimpReports, Total E & P Chief Executive Officer, Adewale Fayemi, updates us on the investment decision on Uganda fields and challenges in maximizing national content.

He, however, says in some of these sectors, “contracts have been signed with Ugandan companies.”

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Fayemi also speaks out on preserving the eco-system in the Murchison Falls Park, a a unique natural treasure deemed worthy of protection

Excerpts:

When is Total making its final investment decision on Uganda fields?

For the Tilenga project, three contractors –Chicago Bridge and Iron Company (CB&I), US-based Fluor and Technip of Paris conducted the FEED on behalf of the JV partners CNOOC, Total and Tullow.

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After the first phase, CB&I and Fluor were shortlisted and are now undertaking phase 2 of the Tilenga project FEED studies.

Concurrently, Environmental & Social Impact Assessment (ESIA) and the development of Resettlement Action Plans (RAPs) to enable land acquisition for the project facilities are ongoing and reports have been submitted to relevant authorities for approval.

Compensation for the Tilenga RAP 1 (Industrial Area including the Central Processing Facility and associated facilities) is ongoing.

For the East African Crude Oil Pipeline, the Front End Engineering Design (FEED) studies have been completed.

The process for selecting the Engineering Procurement and Construction Management contractor is ongoing. In parallel we have started discussions on the Host Government Agreements (HGA) and on the establishment of the Pipe Co. Environmental and Social Impact Assessment (ESIA) as well as surveys for priority land acquisition are ongoing.

Once these are completed, this should enable the partners to arrive at a Final Investment Decision expected in 2018.

This will lead to the project execution and construction phase of both the Tilenga and East African Crude Oil Pipeline.

How prepared is Total E & P to accommodate local content in their operations?

Total pays strong attention to the professional knowhow of contracted service providers, as well as to their compliance to set standards. The company also endeavors to promote capacity building of local service providers through regular contractor and HSE forums.

In Uganda, a strategy has been developed to strengthen the ability of local service providers to provide local goods and services that are suitable for the project.

The reason for this is because there is potential for high national content especially in areas like transportation and civil works. The strategy encompasses strengthening the National content potential and the ability for local companies to compete favorably in areas such as logistics, steel and civil material.

It also covers the development of the required standards and capacities of local companies in areas such as Personal Protective Equipment (PPE), Scaffolding, logistics etc.

The strategy includes the need for formation of Joint Venture partnerships between local and foreign companies to allow for the transfer of knowledge and technology in order to enable the development of the necessary capabilities for the local companies. It also encompasses the need for international companies to establish local branches and promote technology transfer while managing associated risks.

Finally, the strategy covers the need for enhancement of local manpower through training and knowledge transfer.

For Total E&P Uganda, the plan is to maximize national content as much as possible. This strategy is indeed in-line with the national content regulations of Uganda.

Has any Ugandan company obtained big business from Total E & P in the last one year?

In all its operations worldwide, Total considers national content as key for the success of its operations.

As a major international oil and gas company, listed in several stock exchanges, Total abides by the local and international standards, rules and regulations in the respective countries with Total operations. Total pays strong attention to the professional knowhow of contracted service providers, as well as to their compliance to set standards.

The company also endeavors to promote capacity building of local service providers through regular contractor and supplier workshops as well as HSE forums.

Key sectors have been identified where Ugandan companies can benefit from business opportunities if they meet the required standards.

These are waste management, civil works, lifting services, camp management among others. In some of these sectors contracts have been signed with Ugandan companies.

What challenges has the company faced in absorbing local workers in its operations?

Oil and gas is a highly technical field and Uganda a fairly new oil nation therefore; the education system needs to be strengthened in terms of curriculum and certification within the oil and gas subject areas.

Workers especially craftsmen, technicians and engineers need to be certified in several disciplines, i.e. they need to receive accreditation allowing them to work on specific jobs and sites. Such types of certifications include; City and Guild certification, OPITO, American Welding Society (AWS) Certification for welders among others.

Strides are being achieved in this regard with the establishment of a partnership between the French Petroleum Institute (IFP) and Uganda Petroleum Institute Kigumba to ensure that appropriate certifications are acquired.

Total E&P Uganda has also launched in March 2018 a training for 200 welders from the Albertine and pipeline areas in order to develop a domestic pool of internationally certified welders of the American Welding Society Standard.

In addition, since inception, the affiliate has signed a Memorandum of Understanding with Makerere University which serves as a framework for trainings or lecture sessions such as Total Professur Associes (TPA) program to be conducted within identified colleges (Natural Sciences, Engineering etc) in various areas related to oil and gas.

These are conducted by various experienced former staff of Total who provide practical experiences to the students and enhance their learning. The TPA lectures are also delivered to other universities like Kyambogo.

The existing institutions need to be more oriented on oil and gas qualifications in order to match the oil industry requirements. This is not only because we are an oil company listed in several stock exchanges, but it is necessary to ensure that the highest standards of safety are considered due to the highly technical nature, the industry quality and safety that cannot not be compromised.

Total also has to abide not only to local regulations but as well to the international standards, rules and regulations in all countries where the company operates.

In our contracts, we emphasize employment of Ugandans and in doing so we enforce our contractors to provide additional training specific to the oil and gas sector to the employed personnel.

What unexploited local business opportunities exist in Total E & P?

The Industrial Baseline Survey conducted by the Joint Venture Partners points out a number of industries in which Ugandans can actively take part as a means to providing services to the oil and gas sector.

These industries include; transport and logistics, waste management, technical training, work safety products, light equipment and production and operation services among others.

What is Total E & P doing to limit environmental impact and diversity in your areas of operation?

What’s your assessed environmental impact on drilling, storage, testing, transportation, disposal and spilling etc.

Just like in the exploration phase, as we undertake the development phase of the project which involves the construction of facilities such as the Central Processing facility, flow lines, feeder pipelines and camps, we continue to work closely with the Uganda Wildlife Authority (UWA), National Environment Management Authority (NEMA), and other regulatory agencies in a long-term partnership to ensure compliance with national regulations prior to the commencement of any activities.

Environmental and Social Impact Assessments (ESIAs) are undertaken in order to ensure that all the potential impacts are identified and mitigation measures developed. In the development of an ESIA, environmental and social experts and technical engineers are consulted and the ESIA is subsequently submitted to NEMA for approval.

In addition to this, Total E&P Uganda has made a clear commitment to apply international best practices to the development of the oil resources, particularly the International Finance Corporation (IFC) Performance Standards, also known for being the most stringent standards on environment and biodiversity.

Total E&P Uganda has accepted the challenge of working in the sensitive area of the Murchison Falls National Park. Minimising any impact on the environment is a major priority for us because this forms the basis upon which the success of our project hinges.

With our internationally recognized expertise, we are committed to demonstrating that Uganda’s oil resources can be developed in harmonious co-existence with the environment, biodiversity and tourism.

As part of our commitment, we have also developed internal policies and procedures on the protection of environment and biodiversity such as the Biodiversity Charter which sets the guidelines for our operations to ensure protection of biodiversity.

In our work within the Murchison Falls National Park and the surrounding landscape, we are fully committed to carrying out all of our activities while avoiding negative impact on the ecosystem and biodiversity; minimising any unavoidable impact to the ecosystem and biodiversity and identifying impact to the ecosystem and biodiversity and managing restoration operations and considering the restoration of balance for any residual impact that might still be outstanding.

By applying the above mitigation hierarchy, Total E&P Uganda seeks to achieve No Net Loss and/or Net Gain to biodiversity and endeavour not to under-mine the ecological value of Murchison Falls National Park.

To facilitate implementation of the mitigation hierarchy and ultimately achieve No Net Loss and/or Net Gain, Total E&P Uganda is heavily investing in environmental research.

Fayemi

In addition to ESIA baseline studies, Total E&P Uganda performs detailed studies on habitats to define the ecosystems and specific surveys of threatened species to help us understand their ecological contexts and effectively manage potential impacts on the biodiversity.

All these studies are being carried out in collaboration with the Uganda Wildlife Authority and other research institutions.

This information forms the basis of the required mitigation measures to be put in place to protect species and their ecosystems for example; an ecological sensitivity map of key biodiversity features and areas that should be avoided during operations was developed following baseline biological studies.

Total E&P Uganda has invested in research, planning and highly innovative technologies such as the cable-less 3D seismic technology used for the first time onshore in Africa as well as the drilling of the first horizontal well in East Africa to minimize environmental impact.

This will continue during the development phase where we are designing the facilities in such a way that reduces the footprint of our activities.

The environment team at Total E&P Uganda is also working with an independent Biodiversity and Livelihoods Advisory Committee comprising of national and international experts in the field of biodiversity and livelihoods management to ensure that our operations are carried out with respect to the environment and livelihoods.

The impact assessment is still ongoing however; Total E&P Uganda considers oil spill response preparedness a top priority in planning its activities.

We have an oil spill contingency plan to cover the activities in our area of operation and are training intervention teams for emergency response. Equipment to fight spill accidents is strategically prepositioned at our sites and the intervention teams regularly trained on the response scenarios and the manipulation of the equipment.

Of course, ahead of this, we are making all the necessary efforts to conduct safe operations to avoid as much as possible any possible accidents and oil spill. “Safety” is the number 1 value guiding our operations and not just a slogan.

In line with this, the company has instituted relevant oil spill contingency and emergency response plans and procedures which include identifying the various potential spill accident scenarios; defining the very first measures to be taken immediately after a spill; building up the response scenarios corresponding to the selected accident scenarios and defining a specific organization capable of ensuring a fast and efficient response, with an inventory of internal and external emergency resources.

What’s the extent of your public and stakeholder involvement in EIAs?

Public and stakeholder engagement is a continuous process throughout all the project activities. Engagements are carried out with local communities and stakeholders at national, and – at relevant – international levels.

EIA related engagements are dictated by national requirements and also undertaken in respect of international standards such as the International Finance Corporation Performance Standards, the most stringent on biodiversity and environment.

We work closely with the Uganda Wildlife Authority (UWA), National Environment Management Authority (NEMA), and other regulatory agencies in a long-term partnership to ensure compliance with national regulations prior to the commencement of any activities.

How will your activities limit noise, vibrations from equipment, contamination of soil and vegetation clearance? How will Total E & P avoid elimination of connectivity between natural habitats which could negatively impact on wildlife movements and possibly lead to eventual endangering or extinction of species?

In our work within the Murchison Falls National Park and the surrounding landscape, we are fully committed to carrying out all of our activities while avoiding negative impact on the ecosystem and biodiversity; minimising any unavoidable impact to the ecosystem and biodiversity; identifying impact to the ecosystem and biodiversity and managing restoration operations and considering the restoration of balance for any residual impact that might still be outstanding.

By applying the above mitigation hierarchy, Total E&P Uganda seeks to achieve No Net Loss and/or Net Gain to biodiversity and endeavour not to under-mine the ecological value of Murchison Falls National Park.

To facilitate implementation of the above mitigation hierarchy and ultimately achieve No Net Loss and/or Net Gain, Total E&P Uganda is heavily investing in environmental research.

In addition to ESIA baseline studies, Total E&P Uganda performs detailed studies on habitats to define the ecosystems and specific surveys of threatened species to help us understand their ecological contexts and effectively manage potential impacts on the biodiversity.

All these studies are being carried out in collaboration with the Uganda Wildlife Authority and other research institutions.

This information forms the basis of the required mitigation measures to be put in place to protect species and their ecosystems for example; an ecological sensitivity map of key biodiversity features and areas that should be avoided during operations was developed following baseline biological studies.

The Company has since 2012 undertaken thorough baseline data collection aimed at characterizing the habitats and species in the project area and the wider landscape.

These surveys include but are not limited to Ecosystem Services; Habitat assessment; Ramsar; giraffe survey, Aerial surveys for animals counting, Wildlife Telemetry for key species like elephants, etc. This data is used with existing literature and input from national and international experts in order to guide the project design and in support of the ongoing impact assessment and future monitoring. Avoidance of sensitive areas and reduction of the project footprint are key considerations in the design of project facilities and this will contribute to the overall impact mitigation.

The project will include both surface and buried installations which will be designed to minimize any potential impacts on wildlife movements.

  1. Where do you see Uganda’s oil sector in the next five years?

We are progressing steadily towards the achievement of a Final Investment Decision and towards first oil about 36 months later.

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