What role do international companies play in the EACOP project

Introduction

International companies play several crucial roles in the East African Crude Oil Pipeline (EACOP) project:

Major Shareholders

TotalEnergies (France): The largest shareholder, holding 62% stake in the project

China National Offshore Oil Corporation (CNOOC): Holds an 8% stake

These international oil giants are the primary drivers of the project, providing expertise and significant financial backing.

Financial Advisors and Potential Funders

Three banks were appointed as financial advisors for the project:

Stanbic Bank of Uganda (subsidiary of South Africa’s Standard Bank)

Sumitomo Mitsui Banking Corporation (SMBC) of Japan

Industrial and Commercial Bank of China (ICBC)

However, SMBC has since stated it is no longer involved, highlighting the project’s financial risks.

Contractors and Service Providers

WorleyParsons Europe Limited (UK): Appointed as the early services Engineering, Procurement, Construction and Management contractor

China Petroleum Pipeline Engineering Company Ltd (CPP): Contracted to construct the pipeline and above-ground installations

Panyu Chu Kong Steel Pipe Company (China): Signed a $370 million contract to supply steel pipes

Potential Insurers

While many Western insurers have publicly distanced themselves from the project, Chinese state-owned insurance company Sinosure has shown interest in underwriting equipment supply contracts.

Technology and Capacity Building

International oil service companies are expected to partner with local firms, facilitating technology transfer and capacity building for Ugandan companies.

Conclusion

Despite the involvement of these international players, the project faces significant challenges in securing full funding and insurance coverage due to environmental and social concerns