Uganda Oil Refinery

Uganda Oil Refinery
Location of Uganda Oil Refinery
Country Uganda
Province Buseruka Subcounty
Hoima District
Western Uganda
City Kabaale Township
Coordinates 01°30′00″N 31°04′48″E / 1.50000°N 31.08000°E / 1.50000; 31.08000Coordinates: 01°30′00″N 31°04′48″E / 1.50000°N 31.08000°E / 1.50000; 31.08000
Refinery details
Commissioned 2020 (Expected)[1]
Capacity 30,000 bbl/d (4,800 m3/d)

The Uganda Oil Refinery is a planned crude oil refinery in Uganda.[2]

Location

The refinery will be built on a 29 square kilometres (11 sq mi) piece of land in Kabaale Township, Buseruka Sub-county, Hoima District, Western Region, near the international border with the Democratic Republic of the Congo, along the eastern shores of Lake Albert.[3] This will be close to Uganda's largest oil fields in the Kaiso-Tonya area, approximately 60 kilometres (37 mi), by road, west of Hoima, the location of the district headquarters.[4] Tonya is approximately 260 kilometres (160 mi), by road, north-west of Kampala, Uganda's capital and largest city.[5]

Overview

Uganda has proven crude oil reserves of 6.5 billion barrels, about 2.2 billion of which is recoverable.[6] The International Monetary Fund was quoted in 2013 as saying that these reserves are the fourth-largest in sub-Saharan Africa, behind Nigeria, Angola, and South Sudan.[7]

Some of the largest oil fields are in the Kaiso-Tonya area in Hoima District. This area has been selected for Uganda's only oil refinery.[8] The strategy is to build a refinery that meets the petroleum products needs of Uganda and its regional neighbors, with any remaining to be exported.[9][10]

In addition to the refinery, a new airport[11] and a hospital[12] are planned. The Hoima–Kaiso–Tonya Road, which connects Hoima to Kaiso and Tonya along the eastern shores of Lake Albert, passes through Kabaale Village where the refinery will be located.[13] Also planned is the Nzizi Power Station, a 52 megawatt thermal power plant, using natural gas and heavy fuel oil as raw material.[14] The cost of the refinery is estimated to be US$4.3 billion, with 70 percent of that amount to be borrowed and the remaining 30 percent coming from shareholders.[15]

Two intake pipelines and one distribution pipeline, with a total construction bill of over US$200 million, are planned to bring crude to the refinery and distribute the finished products to a new terminal in Buloba on the western outskirts of Kampala.[16] The government hired the Ramboll Group A/S, a Danish company, in July 2015 to conduct an "'early phase' detailed route and environmental study for an oil pipeline that will run from the Albertine Graben - Hoima to Buloba...."[17]

History

The government of Uganda has, from the beginning, preferred a small production capacity to prolong the longevity of its new oil discoveries.[18] This preference initially pitted it against the three major exploration companies in the country, which preferred rapid harvesting and export of the crude via pipeline to the Kenyan coast.[19]

In March 2013, the government of Uganda engaged the US-based energy investment and consulting firm Taylor Dejongh to carry out an international search for a strategic investor in the refinery.[20]

In October 2013, the government of Uganda invited interested parties to bid for the construction, operation, and 60 percent ownership of the refinery in a public-private partnership arrangement.[21][22]

In January 2014, the Ugandan government shortlisted the following six consortia out of fifteen applicants for possible selection as strategic investor in the refinery: China Petroleum Pipeline Bureau (from the People's Republic of China), Marubeni Corporation (Japan), Petrofac (United Arab Emirates), RT Global Resources (Russia), SK Energy (South Korea), and Vitol (the Netherlands).[23]

In June 2014, media reports indicated that four of the six companies had submitted detailed proposals for the construction of the refinery.[24] At that time, the firms still left in the bidding were China Petroleum Pipeline Bureau, Marubeni Corporation, RT Global Resources, and SK Energy.[25][26]

On 25 June 2014, it was reported that consortia led by RT Global Resources and SK Energy had emerged as the two best contenders. They were requested to make a last and final proposal so that the winner could be selected by the end of August 2014.[27]

On 17 February 2015, media reports indicated that the consortium led by RT Global Resources (also including Telconet Capital Limited Partnership, VTB Capital, JSC Tatneft, and the GS Engineering and Construction Corporation) had won the bid to build the refinery.[28][29][30][31][32]

According to a 1 July 2016 published report, talks that had started in February 2015 between the government of Uganda and RT Global Resources broke down, followed by the consortium pulling out.[33] Uganda then began negotiations with the reserve bidder, the consortium led by SK Engineering & Construction of South Korea.[34] The new consortium members include SK Engineering and Construction, the KBD Global Investment Partnership Private Equity Fund, the China State Construction Engineering Corporation, Haldor Topsøe A/S, and Maestro Oil and Gas.[35]

Ownership

A private consortium will own 60.0 percent of the refinery. The government of Uganda has proposed that the remaining 40.0 percent be divided among itself, Burundi, Kenya, Rwanda, and Tanzania in equal shares,[15] except that Uganda would assume whatever ownership interests are not subscribed by the other countries.[15][36]

Kenya has agreed to purchase a 2.5 percent interest in the refinery for an estimated KES:5.6 billion.[37][38] It has not decided whether to increase that interest to the maximum of 8.0 percent, saying that it needs to further evaluate the project's commercial value in light of the government's budgetary constraints.[15]

Burundi and Rwanda have submitted letters of interest to Uganda.[39] Burundi has not decided the extent of its ownership interest, waiting on the feasibility study of the refinery and a detailed statement of anticipated costs.[39]

Tanzania has committed to pay US$150.4 million for 8 percent ownership in the refinery.[40][41]

In October 2016, it was reported that Total SA of France had committed to acquiring 10 percent shareholding in the refinery.[42]

See also

References

  1. ↑ Nalubega, Flavia (1 May 2015). "Uganda: Refinery Will Take Five Years to Complete". Oil In Uganda (Kampala) via AllAfrica.com. Retrieved 2 May 2015.
  2. ↑ Paul Richardson, and Fred Ojambo (30 September 2014). "Uganda Mulls $1 Billion Eurobond Sale to Fund Infrastructure". Bloomberg News. Retrieved 17 February 2015.
  3. ↑ Zitouny, Ismail (17 February 2015). "Russia to build first oil refinery in Uganda". RT.com (RTC) Quoting Reuters. Retrieved 2 February 2016.
  4. ↑ GFC (2 February 2016). "Distance between Hoima, Western Region, Uganda and Kaiso, Western Region, Uganda". Globefeed.com (GFC). Retrieved 2 February 2016.
  5. ↑ GFC (2 February 2016). "Distance between Hoima, Western Region, Uganda and Kaiso, Western Region, Uganda". Globefeed.com (GFC). Retrieved 2 February 2016.
  6. ↑ Patey, Luke (October 2015). "Oil in Uganda: Hard bargaining and complex politics in East Africa" (PDF). Oxford: Oxford Institute for Energy Studies. Retrieved 28 April 2016.
  7. ↑ Fred Ojambo and, Nidaa Bakhsh (8 October 2013). "Uganda Seeks Investor to Build $2.5 Billion Oil Refinery". Bloomberg News. Retrieved 9 May 2014.
  8. ↑ Ladu, Ismail Musa (18 September 2012). "Uganda confirms more oil deposits". Daily Monitor. Kmpala. Retrieved 9 May 2014.
  9. ↑ Ouga, Samuel (14 August 2013). "Uganda's Oil Refinery – An Opportunity for transformation". New Vision. Kampala. Retrieved 9 May 2014.
  10. ↑ Business Monitor International (13 June 2012). "Hoima Refinery Threatened By Kenyan Discoveries". Downstreamtoday.com. Retrieved 8 March 2015.
  11. ↑ Kazibwe, Kenneth (11 June 2015). "OIL: Government to Construct Airport in Hoima, Pipeline". Kampala: Chimpreports.com. Retrieved 19 February 2016.
  12. ↑ Robert Atuhairwe, Benedict Okethwengu (15 November 2014). "Refinery land: Sh30b compensation paid". New Vision. Kampala. Retrieved 2 February 2016.
  13. ↑ Vision Reporter (11 August 2011). "Hoima-Kaiso Tonya Road Works Start". New Vision. Kampala. Retrieved 30 August 2014.
  14. ↑ OIUM (2 July 2013). "Gas: not the main meal but a useful side dish". Kapala: Oil In Uganda Magazine (OIUM). Retrieved 2 February 2016.
  15. 1 2 3 4 Makene, Prosper (4 June 2015). "Government to speak on eight percent share purchase in Ugandan oil refinery when the time is ripe". Dar es Salaam: IPP Media. Retrieved 2 February 2016.
  16. ↑ Downstream (27 May 2013). "Uganda to build petroleum distribution terminal and two new pipelines". Oil Review Africa. Retrieved 2 January 2015.
  17. ↑ Musisi, Frederic (17 July 2015). "Government hires Danish firm to study oil pipeline route". Daily Monitor. Kampala. Retrieved 2 February 2016.
  18. ↑ Nakazzi, Esther (14 June 2011). "Shs14.7 billion allocated towards in-country refinery". Daily Monitor. Kampala. Retrieved 2 January 2015.
  19. ↑ Staff Writers (18 April 2013). "Uganda wanes off foreign pressures as oil production nears". Daily Monitor. Kampala. Retrieved 9 May 2014.
  20. ↑ Ssekika, Edward (1 March 2013). "Govt hires transaction advisor for oil refinery". The Observer (Uganda). Kampala. Retrieved 2 February 2016.
  21. ↑ Kasita, Ibrahim (9 October 2013). "Uganda invites interested firms to build oil refinery". New Vision. Kampala. Retrieved 9 May 2014.
  22. ↑ Musoke, Ronald (17 December 2013). "Uganda shortlists six firms to build oil refinery". The Independent (Uganda). Kampala. Retrieved 2 January 2015.
  23. ↑ Abdallah, Halima (28 December 2013). "Uganda Shortlists 6 Companies for The Oil Refinery Tender". The EastAfrican. Nairobi. Retrieved 9 May 2013.
  24. ↑ Administrator (9 June 2014). "Uganda Moves Closer to Building $2.5bn Oil Refinery". Kampala: Chimprepors.com (CRC). Retrieved 2 February 2016.
  25. ↑ Musisi, Frederic (5 June 2014). "Refinery tender enters third phase, four firms submit bids". Daily Monitor. Kampala. Retrieved 5 June 2014.
  26. ↑ Odyek, John (5 June 2014). "Four companies submit proposals for development of Uganda's oil refinery". New Vision. Kampala. Retrieved 5 June 2014.
  27. ↑ Odyek, John (25 June 2014). "Govt selects two final bidders for oil refinery". New Vision. Kampala. Retrieved 25 June 2014.
  28. ↑ Mbanga, Jeff (12 May 2015). "From Russia with refining capacity". Kampala: Theafricareport.com (TARC). Retrieved 2 February 2016.
  29. ↑ Biryabarema, Elias (17 February 2015). "UPDATE 2-Uganda picks Russia's RT Global Resources to build refinery". London: Reuters. Retrieved 17 February 2015.
  30. ↑ Odhiambo, Allan (18 February 2015). "Uganda picks Russian firm for oil refinery". Business Daily Africa. Nairobi. Retrieved 18 February 2015.
  31. ↑ Ssekika, Edward (18 February 2015). "Why gov't picked Russian firm for oil refinery". The Observer (Uganda). Retrieved 18 February 2015.
  32. ↑ Mugerwa, Francis (12 July 2015). "Oil refinery construction to begin before December". Daily Monitor. Kampala. Retrieved 12 July 2015.
  33. ↑ Musisi, Frederic (1 July 2016). "Russian firm pulls out of Uganda's $4 billion oil refinery". The EastAfrican. Nairobi. Retrieved 1 July 2016.
  34. ↑ Biryabarema, Elias (1 July 2016). "Uganda switches bidder in talks over long-delayed $2.5 billion refinery". Reuters.com. Retrieved 1 July 2016.
  35. ↑ Abdallah, Halima (2 July 2016). "Uganda begins fresh negotiations for oil refinery". The EastAfrican. Nairobi. Retrieved 2 July 2016.
  36. ↑ Reuters (9 May 2014). "Bulk of Uganda commercial oil production to start in 2017-minister". Thomson Reuters. Retrieved 18 July 2015.
  37. ↑ Odhiambo, Allan (19 January 2015). "Kenya Acquires Sh5.6 Billion Stake in Uganda Refinery". Business Daily Africa. Nairobi. Retrieved 18 July 2015.
  38. ↑ Anyanzwa, James (21 March 2015). "Kenya to pay $13 million for Uganda refinery stake". The EastAfrican. Nairobi. Retrieved 21 March 2015.
  39. 1 2 Abdallah, Halima (19 July 2014). "Neighbours sign up for Uganda refinery shares". The EastAfrican. Retrieved 19 July 2014.
  40. ↑ Kasumuni, Ludger (30 April 2016). "TZ to spend Sh300bn buying stake in Uganda refinery". The Citizen (Tanzania). Dar es Salaam. Retrieved 14 July 2016.
  41. ↑ Senelwa, Kennedy (30 July 2016). "Tanzania secures 8pc stake in Uganda's $2.5b oil refinery". The EastAfrican. Nairobi. Retrieved 1 August 2016.
  42. ↑ Anyanzwa, James (8 October 2016). "Uganda oil refinery completion date pushed to 2020". The EastAfrican. Nairobi. Retrieved 8 October 2016.
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