The Democratic Republic of Congo’s (DRC) vision of earning billions of dollars in revenue from dozens of landlocked oil blocks will remain far from being connected to a single export route that will be operated by TotalEnergies.
Over the past decade, Congo has watched eastern neighbor Uganda discover and develop major oil fields, while some of its most promising resources remained untouched. Now, the country risks losing its best chance to bolster its oil industry if it cannot secure access to the planned East African crude oil pipeline that will connect the landlocked reservoirs to global markets.
Congo auctions blocks in the central and eastern areas, nearly a thousand miles from the nearest port. They are also located in environmentally sensitive terrain with almost no infrastructure.
The government is in talks with Uganda, Tanzania and South Sudan to build new pipelines or send their crude through Eacop, Didier Budimbu Ntubuanga, Congo’s oil minister, said last month in an interview at his office private in the capital, Kinshasa. Without a way out, a large portion of the country’s estimated 22 billion barrels of crude could be stranded as the world moves toward cleaner energy sources.
TotalEnergies, the operator of one of Uganda’s Lake Albert oil fields and the pipeline, said it will not be able to accommodate oil from Congo. “Eacop is expected to operate at or near full capacity based on Ugandan production for much of the first decade of its operation,” a company spokeswoman said in an emailed response electronic to the questions.
CEO of the French major Patrick Pouyanne told a French parliamentary commission in November that the company will not bid for the Congolese oil blocks. “TotalEnergies will not be in the DRC to make oil, so this famous pipeline will not be used to make oil,” he said.
The remarks upset Budimbu, who wants to avoid rejection by holding direct talks with the countries to negotiate a connection to the line. “It is not Total that will have the last word,” he said.
Revenue generated from 5.5 billion barrels of oil that Congo estimates lie in just five eastern blocs could be transformative for a country that International Monetary Fund data shows has a gross domestic product of just $69.5 billion and about 100 million people.
“If TotalEnergies does not allow external crude to be transported through the pipeline, then I believe there are no export options available on this side of the country.” Pranav Joshi, a Rystad Energy analyst said in response to questions.
WAITING FOR EXPLORATION
The Ugandan government is open to sending Congolese oil, but there are contingencies.
“Given that DRC volumes may take several years to be ready for transport, we believe the pipeline will have spare capacity,” he said, based on future exploration results from host countries, he said. Peter MuliisaDirector of Legal and Corporate Affairs of the Uganda National Oil Company Ltd.
Congo was always expected to be part of Eacop, says Ugandan energy ministry spokesman Shout out to Solomon. “The only problem is that Congo has not moved at the same pace as Uganda” in developing its own oil resources, he said.
Last week, the ministry postponed the deadlines for submitting bids on 24 blocks for the second time and announced another roadshow on May 11 in the City of London to publicize the tender.
Total and China National Offshore Oil Corp. will build the $4 billion 1,443 km Eacop pipeline to send oil from the Ugandan side of Lake Albert along the Congolese border to the Tanzanian port of Tanga as early as 2025.
“The discussion with Uganda is to be a stakeholder, to have shares in that pipeline there,” Budimbu said. A more expensive option would be to bypass Uganda entirely by building a pipeline through South Sudan and through Ethiopia.
Despite the logistical and environmental challenges, Budimbu estimates that two Lake Albert blocks could fetch just $1.5 billion, which would be difficult for smaller oil companies to achieve. “You can’t just think that being a senior is being Total,” he said. “These days there are majors even in China, they are everywhere.”
