EA tensions are a notch down, so here come the petrodollars
Saturday February 05 2022
Total Energies CEO Patrick Pouyanné 9second left) and Rwandan President Paul Kagame (second right) with other officials at Urugwiro Village in Kigali, Rwanda, on January 30, 2022. PHOTO | COURTESY
It was a very busy few days for French oil and gas giant TotalEnergies on the eastern flank of Africa. In Kampala, it signed a deal for the long-awaited Final Investment Decision (FID) for the 1,443km Uganda-Tanzania crude oil pipeline to the Tanzanian port of Tanga, and Kingfisher and Tilenga oil projects in the Lake Albert region.
There was also something about developing renewable energy.
Next door in Rwanda, TotalEnergies inked a memorandum of understanding to increase investment in renewable energy and electric mobility in the country. Among other things, it will see more electric charging stations installed in Kigali to service the region’s largest fleet of electric motorcycles and cars.
Then, in Maputo, it announced it would resume work on its natural gas project in Mozambique this year. The $20 billion gas liquification plant near Palma on the northeast coast of Mozambique's Cabo Delgado Province is the largest foreign investment in Africa. The site was inactive for over a year being repeatedly attacked by militants linked to the Islamic State (IS) group.
The picture of TotalEnergies that was on display in the week was a polygamous multinational, dabbling in old-school fossil fuel, hybrids, and clean energy. It also was a masterclass of capitalism on the march. In East Africa, at least, no gas and oil major is splashing out like TotalEnergies.
You are certain to see more of its new stations than any belonging to its global rivals. Not too long ago, I drove into a lonely and sleepy corner of Uganda. When I turned a corner, there it was; a brand new TotalEnergies petrol station. A few months later, the rutted road running in front of it had been tarmacked.
The week’s activities also revealed a bigger global and regional geopolitical play. A month ago, the European Commission outraged some environmental fundamentalists when it proposed plans to label some gas and nuclear power as green. TotalEnergies’ stock of natural gas investments in Mozambique probably gained a premium with that.
It is also only able to move forward again with the natural gas in Cabo Delgado, thanks to Kigali, which last August dispatched its military to the region to help a hapless Maputo government beat back the rebels and retake control of the province.
Uganda, for its part, at the end of November last year, sent its troops into the eastern Democratic Republic of Congo to chase down IS-linked Uganda militant group Allied Democratic Forces (ADF), blamed for a series of suicide bomb attacks in the capital Kampala.
The bonus pay-off, however, was likely to remove the threat of the ADF from the shadow of the oilfield in the Lake Albert region, allowing TotalEnergies to write a cheque with less worry.
Rwanda and Uganda also marked a thawing in icy relations, with the announcement of the opening of the Gatuna/Katuna border, the busiest crossing between the two countries, bringing the uncertainty and risk profile surrounding their three-year stand-off a few notches down.
One observer noted that days later it was announced that the twice-postponed Commonwealth Heads of Government Meeting (CHOGM) would be held in Kigali in June.
And, so, everyone went home happy.
That is Realpolitik 101.
Charles Onyango-Obbo is a journalist, writer, and curator of the “Wall of Great Africans”. - Twitter@cobbo3