Uganda seeks new partners for its oil refinery project
Uganda is looking for new partners to develop its oil refinery project, after the previous consortium failed to secure funding and withdrew from the deal. The project, which is estimated to cost $4 billion, aims to produce 60,000 barrels of oil per day from the country’s oil fields.
Previous consortium exits the project
The previous consortium, known as Albertine Graben Refinery Consortium (AGRC), consisted of Italy’s Saipem, US-based General Electric, Kenya’s Yaatra Ventures, and Uganda’s Intracontinent Asset Holdings. The consortium was awarded the contract to design, finance, construct, and operate the refinery in 2018.
However, the consortium could not meet the deadline for a final investment decision, which was due in June 2023. The consortium cited difficulties in raising funds for the project, amid the Covid-19 pandemic and the volatile oil market. As a result, the consortium lost its rights to develop the refinery, and the Ugandan government had to start over.
Uganda explores new options
The Ugandan government has not given up on its ambition to build a refinery, which it sees as a strategic asset to add value to its oil resources and create jobs and revenue. The government has entrusted the Uganda National Oil Company (UNOC) to continue the development of the refinery project, while it searches for a new strategic partner.
According to Ali Ssekatawa, the legal and corporate affairs director of the Uganda Petroleum Authority, the government regulator, the government has initiated talks with several potential partners from Africa, the Middle East, and China. He said that the government has received a lot of interest and appetite for the project.
Ssekatawa confirmed that one of the parties that the government has been in talks with is Sonatrach, Algeria’s state-owned oil company. He also said that the preferred option for the government is to partner with another national oil company to take forward the project.
Ssekatawa said that the government will announce the next steps for the project within the next three months. He said that some of the work done by the previous consortium, such as front-end engineering and design work and environmental impact assessments, will be utilized by the new partner.
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