By Nicholas Bariyo
KAMPALA Uganda--France's Total SA (TOT) is pressing the Ugandan
government to approve the construction of a crude export pipeline
ahead of the planned development of the country's vast oil reserves
in the Lake Albertine Rift Basin, a company spokeswoman told Dow
Jones Newswires Monday.
Total's top executives, led by its president for Africa Jacques
Marraud, met Uganda's long-serving leader, Yoweri Museveni, in
Kampala earlier this month in a bid to persuade him to break the
impasse over the construction of a refinery and crude pipe line,
according to Ahlem Friga-Noy, Total's spokeswoman in Uganda.
The development underscores Total's growing frustration with the
Ugandan government, more than a year after the company acquired a
stake in the country's oil assets.
"The discussion raised the issue of the refinery and the crude
export pipeline. Total underlined to the President its
understanding of the need for a refinery... and restated its view
that this refinery should be combined with an export crude
pipeline" Ms. Friga-Noy said. "We are hopeful that parties will
soon reach a convergence of views."
A presidential spokeswoman confirmed the meeting, but declined
to delve into details. Total has indicated that its $12 billion
project with the U.K.'s Tullow Oil PLC (TLW.LN) and China's Cnooc
Ltd. (CEO) to develop the oil fields in the country is in danger of
stalling unless Uganda approves the construction of a pipeline to
export crude to overseas markets through the East African
coast.
Mr. Museveni has insisted that Uganda will not export crude oil.
The government wants companies to construct an up to 180,000
barrels-a-day refinery to refine most of the crude locally to
maximize benefits from the resource. But Total and its partners
have been pushing for the construction of a smaller refinery to
supply only the local market, creating a stand-off which continues
to push back the planned date of oil production.
Last month, Total Chief Executive Officer Christophe de Margerie
told analysts in London that everything in Uganda is "ready to
start" apart from the issue of the crude pipeline. Tullow, Total
and Cnooc want to quickly recoup billions of dollars they expect to
spend in the country and are considering investing at least $5
billion in pipelines to the East African coast.
But Mr. Museveni is also under pressure to translate the
newfound oil wealth into jobs. Uganda said on Monday that
cumulative investments in oil exploration in the country had
reached $1.7 billion, leading to the discovery of at least 3.5
billion barrels of crude reserves.
Write to Nicholas Bariyo at nicholas.bariyo@dowjones.com