Uganda expects to have identified a lead investor in its proposed oil refinery by February next year, according to energy minister Irene Muloni.
Ms Muloni was speaking at the second annual Uganda International Oil and Gas Summit, where she outlined the energy ministry’s role in ensuring the first flow of crude oil from Uganda’s fields and government’s plans in supporting the energy sector.
The ministry had initially chosen a consortium led by Russia’s RT Global Resources as the lead investor in the refinery, but the company pulled out of negotiations in June. Ms Muloni said the consortium was demanding for “unfavourable conditions.”
Attempts to replace RT Global Resources with the runner-up in the initial bidding process, South Korea’s SK Engineering & Construction Group, also failed after the South Korean company walked away from negotiations.
Muloni said several companies have since “expressed interest in joining us” as investors in the refinery.
Additionally, she said the government will award more exploration licences for four exploration blocks before the end of the year. The energy ministry invited three Nigerian companies and one Australian company to negotiate for five production sharing agreements for the blocks in August.
The government is still committed to constructing the refinery through a public-private partnership arrangement where the lead investor takes a 60% stake, Ms Muloni said. The Uganda government and other East African countries would take the remaining stake.
Tanzania has already expressed interest in acquiring an 8% stake in the project and Kenya 2.5%, Muloni said. The minister also said Total S.A., the French oil and gas company exploring for oil in western Uganda, will acquire a 10% stake in the refinery.
Ms Muloni said the government is confident that the first crude will be produced in 2020. Indeed, she said it is a directive from the president that production starts in that year.
The Uganda International Oil and Gas Summit brings together state actors in the oil and gas sector and local and international investors to “to share knowledge, explore current challenges and examine the most prominent investment opportunities in Uganda and throughout the region.”