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Uganda is constant improvement work on an oil refinery regardless of the exit of a serious consortium in June, and is in discussions with companions from Africa, the Center East and China, in keeping with a senior government on the authorities regulator.
In accordance with Ali Ssekatawa, director for authorized and company affairs on the Petroleum Authority of Uganda, the Uganda Nationwide Oil Firm has stepped in to proceed improvement work whereas the federal government seems for a strategic accomplice. He expects the following steps to be introduced inside the subsequent three months.
“There’s lots of urge for food and curiosity in creating the refinery,” he tells African Enterprise.
He confirms experiences that discussions have taken place with Algerian state-owned firm Sonatrach and says that talks have additionally been opened with varied events from Africa, the Center East and China.
“The popular possibility is the Uganda Nationwide Oil Firm working along with one other nationwide oil firm to take ahead this mission,” says Ssekatawa, although he provides that Uganda is able to contemplate proposals from different entities.
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Doubts over 2027 deadline
The newest blow to the mission got here on the finish of June, when the Albertine Graben Refinery Consortium (AGRC) failed to satisfy a deadline for a ultimate funding resolution, having been unable to line up financing for the $4.5bn mission. As such, AGRC has misplaced its rights to develop the refinery, with the Ugandan authorities pressured to return to the drafting board.
Ssekatawa factors out that though AGRC finally failed to succeed in a ultimate funding resolution, it did attain a number of vital milestones. Any new strategic accomplice is not going to have to start out from scratch. Entrance-end engineering and design work and environmental impression assessments have already been accomplished, whereas many of the land wanted for the refinery and related pipelines has been acquired and cleared, he says.
Nonetheless, the purpose of commissioning the refinery in 2027 appears bold, on condition that Uganda nonetheless must discover a development contractor and put financing in place. Ssekatwa acknowledges “a bit of little bit of uncertainty,” however says that the Ugandan authorities is not going to scale back the deliberate dimension of the refinery and continues to consider a ribbon-cutting can happen in 4 years’ time.
“Primarily based on the milestones achieved, regardless of the expiry of this contract [with AGRC], we predict that we’re nonetheless on the right track for that timeline.”
The lengthy street to a refinery
Nearly 20 years have handed since oil was first found in industrial portions in Uganda’s Lake Albert area. Progress in bringing these assets into manufacturing has been gradual, though drilling is now underway to permit oil to start flowing from 2025.
Whereas many of the oil will probably be exported through a controversial pipeline working by way of Tanzania, the Ugandan authorities has lengthy been decided to refine a portion of its oil domestically.
The necessity to import petroleum merchandise is a serious drain on the nation’s overseas alternate reserves, particularly at a time of rising international costs. The Financial institution of Uganda reported that the gasoline import invoice doubled within the 2022 fiscal 12 months.
Nonetheless, efforts to assemble a 60,000 barrels-per-day facility close to the city of Hoima have endured repeated setbacks. A Russian consortium was chosen as the popular bidder to assemble the refinery in 2015, however the deal broke down the next 12 months. The AGRC consortium, which included US and Italian companies, was then handed the contract in 2018.
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