The Ugandan government said Wednesday that the construction of its first oil refinery will come on stream by 2018 as the East African nation continues to develop its nascent oil sector, the energy and minerals ministry said Wednesday.
The Ugandan government said Wednesday that the construction of its first
oil refinery will come on stream by 2018 as the East African nation continues
to develop its nascent oil sector, the energy and minerals ministry said
Wednesday.
The refinery, located in Hoima district, some 130 miles west of the capital
Kampala
, will
supply refined petroleum products to the domestic market, as the country seeks
to slash its imports bill and become self-sufficient in fuel products.
"The government plans to develop a refinery...starting with a capacity of
30,000 barrels per day by 2018 which will be increased to 60,000 barrels per
day before 2020," the ministry said in a statement.
The refinery project, which is expected to cost $2 billion, is one of the most
contentious elements of a prolonged debate over how
Uganda
should develop its newly found oil reserves, estimated to be around 3.5 billion
barrels of crude.
In April, the government agreed to approve the construction of a smaller
refinery along with a crude export pipeline to the north Kenyan coast, breaking
a nearly-two year impasse with foreign oil companies that delayed the
development of the sector.
Last month,
China
's
state-owned Cnooc Ltd. (0883.HK, CEO) said it was interested in investing in
the refinery, days after the Ugandan government announced that it would pay for
Chinese-built infrastructure using future oil revenues.
The Chinese company, together with U.K.-based Tullow Oil PLC (TLW.LN) and
France
's
Total SA (TOT) are in the process of developing
Uganda
's oil
fields in the Lake Albertine Rift basin. Cnooc is so far the only company among
the joint venture partners to express an interest in the project.
Uganda
discovered commercial oil reserves in 2006 but the development of the fields
has dragged on, partly due to disagreements between the oil companies and
government over the development plans and refining options.
Last month, Tullow said that it had made "substantial progress" with
its partners and the government and expects to sign a memorandum of
understanding for the development of the country's oil fields. The government
has hired U.S.-based investment firm, Taylor-DeJongh which is providing
advisory services on the selection of a lead investor for the refinery, the
sourcing of financing as well as the formation of a refining company.
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