Oil and Gas Sector in Uganda: An Interview with Obi Imemba of Total Uganda

Interview with Obi Imemba, Managing Director of Total Uganda

What is your assessment of the oil and gas sector in Uganda?

The oil and gas sector in Uganda is quite unique because you have the upstream and the downstream segments. The downstream sector has been in existence since the pre-colonial days and the upstream sector has just begun to evolve in the last ten years. On the downstream side, the market is quite advanced and there are several players. Total is the only international player in the market. We have had several international players like Exxon-Mobil, Shell, Chevron. However, these have all left. Total acquired the assets of Chevron and Gapco. Total has thrived in this sector for more than 64 years, since 1955. The downstream sector is well-developed and mature. We have several independent players, several medium players, a few regional players, and then Total is the international player. In the upstream sector, the main players are Total with our joint venture partners CNOOC and Tullow. These companies are working to develop the main oil blocks in the Lake Albert field. It is called the Lake Albert Oil and Gas Project. There are three blocks. Block 1, 2, and 3A are operated by Total, Tullow, and CNOOC, respectively. They are working together with the government today to find a model to develop these blocks in a commercially viable manner that is beneficial for both the partners and the government. In general, the oil and gas sector in Uganda is quite developed in the downstream side and in the upstream side, the recent developments and the discovery of about 1 billion barrels worth of recoverable oil in the Lake Albert region has given the country an opportunity to become a major player in the upstream sector, particularly in East Africa. There is no other such discovery in East Africa today.

Total is a major player on the upstream side. Why has Total decided to come here and be the only international company on the downstream side?

That speaks volumes as to what Total is made of. We have five core values. The first is safety. Among the other four, we have a “pioneer spirit” which is about being innovative, being bold, stepping into territories that others cannot go into, taking very calculated risks, and being resilient in all circumstances. That is what we are made of. It is our DNA. Secondly, Total has made Africa our home. We believe that Africa is our main area of play. We are number one in both downstream and upstream and we have a competitive advantage here. We have invested a lot here. We have been present here for close to 100 years. Africa is our area of expertise and competitive advantage. The majority of the upstream deep-water development in Africa has been done by Total. In the downstream sector, we have the highest market share in Africa. Most of these other international companies have left and sold to us. We know the people and we understand them. We empower a lot of African talent. Total is an international company and a lot of our affiliates are managed by Africans like myself. I am Nigerian originally and I was recruited right out of school and was empowered to develop into a leader in Total today. We understand Africa and we have tailored our operations to meet those requirements. We understand the culture, we understand the language, and we do not just impose ourselves, rather we try to understand and adapt.

What are your competitive advantages downstream compared to others?

Through rigorous practices and requirements that we impose on our operations, we are able to preserve the people that work for us, preserve our communities, preserve the environment, and preserve our society at large.

In the downstream sector, because we are an international company, we bring our international standards in the quality of our stations and how we design, operate, and run them on a day to day basis. The second thing we bring is the quality of our products. We are selling a differentiated product. We sell an additive called Excellium and we are the only people selling this in the market. All of our competitors sell conventional fuel. This gives us the advantage of making the journey of our customers more enjoyable. Excellium removes deposits that are found in car engines. Excellium also has anti-corrosion properties that extend your engine life. It also minimizes pollution that results from the combustion of these engines. What we sell is better for the environment, gives the rider a better experience, gives the customer peace of mind, and makes his engine last longer. For the same quantity of fuel, you can go farther using Excellium than what the conventional fuel will give you. So, we give differentiated products, differentiated service, and we bring international ethics. Total is a company that everyone can attest to that we uphold the highest level of ethical standards. We are never involved in any activities that will compromise the integrity of our services. We protect the interests of our shareholders who are based all over the world. We know that we are international and whatever we do locally here will be judged on that international scale. In addition, we are heavily involved in human capital development in this country. We have invested in several young people. We have invested in the dealers that run our stations. Today, more than half of them are people that were customer attendants that we took through the ranks, trained them, gave them money, empowered them, put them through an apprenticeship process, and today they have become their own business owners. Some of them run up to four stations for us today. We have also invested in an entrepreneurship development program called Startupper where young people are given startup capital, they are trained, and they are posed by Total over a period of time to become employers of labor. This program over time has a multiplier effect, it is very scalable, and we have seen a lot of businesses come out of this. There is so much value we bring to this country. In terms of investments, we have invested heavily in our stations. They have a very modern design, we have put a lot of money into them, and the ratio of investment in our stations compared to conventional stations is close to ten times more. In our depots, we build them to international standards. There are no fire incidents or explosions, and we make sure that people, the environment, and neighbors are protected. In terms of the trucks that carry our goods and services, we make sure that they are up to international standards. Those trucks have a minimum age. Most times, we only embark trucks that are brand new. We have a maximum age at which they will have to leave the fleet. After ten years, we do not use them anymore. We install a tracking system in our vehicles and we use specific tires. We are the only company that does not drive at night, where others will drive 24/7. Our drivers do not drive for more than 8 hours a day and they must rest after every 2 hours. We have very stringent safety requirements implemented. This leads to less accidents on the road, less damage of the road, and the overall protection of the environment. Every time there is an accident or spill, the environment is affected – there may be fires or explosions and lives may be lost. Through these rigorous practices and requirements that we impose on our operations, we are able to preserve the people that work for us, preserve our communities, preserve the environment, and preserve our society at large. We bring a lot of value to this country and to this environment and we are proud of that.

What projects do you have in the upstream segment?

The Lake Albert project is a very important and strategic project. It contains about 1 billion recoverable oil reserves. This project will require an investment of more than 10 billion dollars to bring it to realization. Total and our partners, namely Tullow and CNOOC, together with the government are working very hard to bring this project to fruition. There is a lot of work that has gone into this including the design and the engineering studies that have been completed. Today, the environmental and social impact assessment has been completed together with the government agency responsible, NEMA. We have published this report and it is available to the public. This location is very sensitive to the environment. It is close to a National Park. So, Total and our partners have put a lot of effort into making sure that the impact of this project on the environment, the people, and the society is minimized as much as possible. That is why the investment in this assessment is very important. In terms of the potential of this project, there is a lot of potential of creating a lot of employment opportunities for the people of Uganda. There will be a lot of local jobs that will be available, a lot of contracts and services for the locals to provide in logistics, construction, transportation, material procurement, etc. There will be a lot of opportunity for people to benefit from this project. All the people located within that area have been considered in the assessment. Teams are on the ground to discuss everything with them. However, many people are not aware of all these efforts, studies, and assessments that have been performed and the actions and mitigation measures that have been put into place. We have published our report in the dailies, the national newspapers, and online and we encourage people to look at it. People will be able to understand that there has been a very conscious and deliberate effort to make sure that every aspect and every detail of the consequences of this project has been considered and is being taken into account.

This project has been delayed for various reasons. What is your forecast for this? Has this delay affected the development and even the credibility of the country?

Total and the partners in this project have a very strong desire to bring this project to realization as soon as possible. The technical requirements are under control and the future of these technical requirements has also been considered. Today, what we are discussing are the physical conditions. The government and the partners are trying to find a common ground to be able to proceed with the sanctioning of the project in such a way that it will be commercially viable for all parties. This will be achieved very soon. There is a very strong commitment on the part of the partners and the government. Uganda is a new player in the upstream sector so it is not unusual to find some delays in trying to being able to sort out the laws and find the right balance between trying to start this new sector and trying to make sure that the country understands what they are going into and how to benefit from it in the best interest of the country. Of course, this has taken some time. We hope that the time that it has taken has helped all the parties to learn some lessons. That will also help in the very near future to be able to find an amicable solution to the issues that have been in contention. It is difficult to give exact dates. The most important thing is to have a final investment decision. That is a point of no return where all parties agree to proceed on the mutually agreed upon terms and conditions. That is the first milestone and we expect to get that soon. Once that takes effect, everything else will be assured. A few months after that, we expect the real oil production to begin and the country will start benefitting. Once the FID is taken, the sector will immediately open because that is when the main investment will be done. We expect more than 10 billion dollars to be invested during this period. Once that comes into the economy, it will change the dynamics of the economy and everyone will benefit.

What is your vision for the company in the future?

We have been here since 1955. We have been with the country through thick and thin, during the pre-colonial era, during the post-colonial era, during the wars and conflicts. Our goal and our vision is to remain here in Uganda continuing to be a development partner of the country. Every year, we pay more than 100 million dollars in tax to the government. It is a big contribution to the economy. We invest tens of millions of dollars every year in bringing about new sites, assets, and depots. We invest a lot here. In the coming future, we expect to continue these investments. We will invest in extending the reach of our network. We want to be found in every corner of Uganda. Wherever you are, wherever you live, and wherever you go, you should be able to find Total products and services. We want to continue serving the people of Uganda in all areas. We provide premium fuel, premium LPG gas, best in class lubricants, the best solar products, and all our convenient services to them wherever they are. We do not want any of our customers to be stranded on the road. We also want to continue to invest in the human capital. We want to continue to develop young Ugandans. We want to encourage Total employees to take higher positions in Total. Today, 80% of our management team are Ugandans and 99% of all our staff are Ugandans. More than 50% of our dealers are Ugandans that we trained and empowered. We want to continue that. We have a program called the Young Graduate Programme. We recruit graduates fresh from school, train them, expose them internationally, and get them ready to become very senior staff in Total with positions of high responsibility in the future. We also want to remain in our CSR space with our Startupper where we empower young Ugandans to start viable enterprises. We want to remain in the leadership of Safe Way Right Way which is an NGO focused on road safety. They help Ugandans with road safety education, road safety policies, road safety training. In that way, we can reduce the mortality on our roads and help the current generation and the future generation to have a sustainable living. We want to remain a reliable partner to the government and responsible citizens of this country. We want to continue to inculcate our ethical behavior to society and help people to know that it is good to be ethical, responsible citizens of this country.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.