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°ECoordinates: 01°30′00″N 31°04′48″E / 1.50000°N 31.08000°E
Refinery details
Commissioned 2020 (Expected)[1]
Capacity 30,000 bbl/d (4,800 m3/d)

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

Location

The refinery will be located on a 29 square kilometres (11 sq mi) piece of real estate in Kabaale Township, Buseruka Sub-county, Hoima District, Western Region of Uganda, along the eastern shores of Lake Albert, near the international border with the Democratic Republic of the Congo. This location lies close to Uganda's largest oil fields in the Kaiso-Tonya area, approximately 40 kilometres (25 mi), by road, west of Hoima, the nearest large town.[3] Tonya lies approximately 260 kilometres (160 mi), by road, northwest of Kampala, Uganda's capital and largest city.[4] The approximate coordinates of the refinery are:+1° 30' 0.00", +31° 4' 48.00" (Latitude:1.5000; Longitude:31.0800). The coordinates are approximate because the refinery does not yet appear on most publicly available maps.

Overview

Since 2006, Uganda has discovered proven reserves of at least 3.5 billion barrels of crude oil, at least 50 percent of which is recoverable. The reserves are the fourth-largest in sub-Saharan Africa, behind Nigeria, Angola, and South Sudan.[5] Some of the largest oil fields are located in the Kaiso-Tonya area in Hoima District. This area has been selected to be the location of Uganda's only oil refinery.[6] The strategy is to build a refinery that meets the petroleum products needs of Uganda and its regional neighbors and to export the rest of the production via a pipeline to Kenya's port of Lamu.[7][8]

History

The Government of Uganda has, from the beginning, preferred a small production capacity to prolong the longevity of its new oil discoveries.[9] 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.[10]

Finally in April 2013, the government reached an agreement with Tullow Oil of the United Kingdom, Total of France, and the China National Offshore Oil Corporation to build both the oil refinery and the pipeline.[11] Uganda has partnered with the neighboring countries of South Sudan,, Kenya, and Rwanda to take up ownership in the planned oil refinery.[12] Once the remaining issues are worked out, construction is expected to start in 2016, with commissioning expected in 2020.[1] 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.[13][14]

Construction costs

The exact construction bill has yet to be worked out. In addition to the refinery, a new airport, a road network within the community, a modern road linking the new development to Hoima, and a hospital are planned. Also in the pipeline is Nzizi Power Station, a 52MW thermal power plant, using both natural gas and heavy fuel oil as raw materials. Two intake pipelines and one distribution pipeline, all with a total construction bill of over US$200 million, are also planned to bring crude to the new refinery and to distribute the finished products to a new terminal in Buloba on the western outskirts of Kampala.[15] The Hoima–Kaiso–Tonya Road, which connects Hoima to Kaiso and Tonya along the eastern shores of Lake Albert, passes through Kabaale Village, Buseruka sub-county, in Hoima District, where the Uganda Oil Refinery is located.[16]

Owners

The government of Uganda has engaged the US-based energy investment and consulting firm of Taylor Dejongh, to carry out an international search for a strategic investor in the Uganda Oil Refinery.[17] In July 2013, China National Offshore Oil Company (CNOOC), expressed interest in investing in both UOR and in the proposed oil pipeline to the Kenya coast.[18][19] As of July 2014, the proposed shareholding in UOR is as illustrated in the table below:[20][21][22]

Uganda Oil Refinery Stock Ownership
Rank Name of OwnerPercentage Ownership
1Government of Kenya2.5[23][24]
2Government of Rwanda2.5[25]
3Government of Burundi2.5[26]
4Government of Tanzania2.5
5Government of Uganda30.0
6Strategic Investor or Investors60.0
Total100.00

Recent developments

In January 2014, the Ugandan government shortlisted the following six consortia out of fifteen applicants for possible selection as strategic investor in the refinery: 1. China Petroleum Pipeline Bureau, from the People's Republic of China 2. Marubeni Corporation, from Japan 3. Petrofac from the United Arab Emirates 4. RT Global Resources from Russia 5. SK Energy from South Korea and 6. Vitol from the Netherlands.[27]

On 4 June 2014, media reports indicated that four of the six companies had submitted detailed proposals for the construction of the oil refinery.[28] At that time, the firms still left in the bidding were: 1. China Petroleum Pipeline Bureau - China 2. Marubeni Corporation - Japan 3. RT Global Resources - Russia and 4. SK Energy - South Korea.[29][30]

On 25 June 2014, it was reported that RT Global Resources of Russia and SK Energy of South Korea had emerged as the two best contenders. The two consortia were requested to make a last and final proposal, so that the winner could be selected by the end of August 2014.[31]

On 17 February 2015, media reports indicated that the consortium led by Russia's RT Global Resources had won the bid to build the refinery. The Ugandan government is expected to begin in-depth negotiations with the winning bidder for a binding agreement to construct the refinery. The negotiations are expected to last about 60 days. If the parties fail to agree on terms, the government plans to negotiate with the losing bidder to construct the refinery. Construction is expected to commence during the second half of 2015.[32][33][34]

See also

References

  1. ↑ 1.0 1.1 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. ↑ "Map Showing Hoima And Tonya With Distance Marker". Globefeed.com. Retrieved 9 May 2014.
  4. ↑ "Approximate Road Distance Between Kampala And Tonya With Map". Globefeed.com. Retrieved 9 May 2014.
  5. ↑ Fred Ojambo and, Nidaa Bakhsh (8 October 2013). "Uganda Seeks Investor to Build $2.5 Billion Oil Refinery". Bloomberg News. Retrieved 9 May 2014.
  6. ↑ Ladu, Ismail Musa (18 September 2012). "Uganda Confirms More Oil Deposits". Daily Monitor. Retrieved 9 May 2014.
  7. ↑ Ouga, Samuel (14 August 2013). "Uganda’s Oil Refinery – An Opportunity for Transformation". New Vision. Retrieved 9 May 2014.
  8. ↑ Business Monitor International, . (13 June 2012). "Hoima Refinery Threatened By Kenyan Discoveries". Downstreamtoday.com. Retrieved 8 March 2015.
  9. ↑ Nakazzi, Esther (14 June 2011). "Shs14.7 Billion (US$6.2 Million) Allocated Towards In-Country Refinery In 2011". Daily Monitor (Kampala). Retrieved 2 January 2015.
  10. ↑ ., Staff Writers (18 April 2013). "Uganda Wanes Off Foreign Pressures As Oil Production Nears". Daily Monitor (Kampala). Retrieved 9 May 2014.
  11. ↑ Bariyo, Nicholas (15 April 2013). "Uganda Reaches Deal On Refinery And Pipeline". Wall Street Journal Online.
  12. ↑ Kasita, Ibrahim (10 October 2013). "Firms Invited To Build Uganda Oil Refinery". New Vision (Kampala). Retrieved 8 March 2015.
  13. ↑ Kasita, Ibrahim (9 October 2013). "Uganda Invites Interested Firms to Build Oil Refinery". New Vision. Retrieved 9 May 2014.
  14. ↑ Musoke, Ronald (17 December 2013). "Uganda Shortlists Six Firms To Build Oil Refinery". The Independent (Uganda). Retrieved 2 January 2015.
  15. ↑ Downstream, . (27 May 2013). "Uganda To Build Petroleum Distribution Terminal And Two New Pipelines". Oil Review Africa. Retrieved 2 January 2015.
  16. ↑ Vision, Reporter (11 August 2011). "Hoima-Kaiso Tonya Road Works Start". New Vision (Kampala). Retrieved 30 August 2014.
  17. ↑ Bariyo, Nicholas (1 March 2013). "Uganda Hires US Firm Taylor-DeJongh to Advise on Oil Refinery". Wall Street Journal Online. Retrieved 9 May 2014.
  18. ↑ Bariyo, Nicholas (3 July 2013). "China's CNOOC Mulls Uganda Oil Refinery, Pipeline Investment - Uganda Government". Wall Street Journal Online. Retrieved 9 May 2014.
  19. ↑ Bariyo, Nicholas. "Uganda Sees Its Firsts Oil Refinery on Stream by 2018". Wall Street Journal Online. Retrieved 9 May 2014.
  20. ↑ Reuters, . (9 May 2014). "Bulk of Uganda Commercial Oil Production To Start In 2017 - Minister". Thomson Reuters. Retrieved 9 May 2014.
  21. ↑ Abdallah, Halima (19 July 2014). "Neighbours Sign Up for Uganda Refinery Shares". The EastAfrican. Retrieved 19 July 2014.
  22. ↑ Kasita, Ibrahim (19 September 2013). "EAC States To Invest 40% In Oil Refinery". New Vision (Kampala). Retrieved 8 March 2015.
  23. ↑ Odhiambo, Allan (19 January 2015). "Kenya Acquires Sh5.6 Billion (USD61.5 Million) Stake In Uganda Refinery". Business Daily Africa (Nairobi). Retrieved 19 January 2015.
  24. ↑ Anyanzwa, James (21 March 2015). "Kenya To Pay US$13m for Uganda Refinery Stake". The EastAfrican (Nairobi). Retrieved 21 March 2015.
  25. ↑ Omondi, George (10 April 2014). "East African Leaders Agree To Build Oil Refinery In Western Uganda". The EastAfrican (Nairobi). Retrieved 8 March 2015.
  26. ↑ Kagire, Edmund (7 March 2015). "Jakaya Kikwete In Kigali for Northern Corridor Meet As Countries Pledge Speed". The EastAfrican (Nairobi). Retrieved 10 March 2015.
  27. ↑ Abdallah, Halima (28 December 2013). "Uganda Shortlists 6 Companies for The Oil Refinery Tender". The EastAfrican. Retrieved 9 May 2013.
  28. ↑ Bariyo, Nicholas (4 June 2014). "Uganda Receives Proposals to Build $2.5 Billion Oil Refinery". Dow Jones Business News via Nasdaq.com. Retrieved 4 June 2014.
  29. ↑ Musisi, Frederic (5 June 2014). "Refinery Tender Enters Third Phase, Four Firms Submit Bids". Daily Monitor. Retrieved 5 June 2014.
  30. ↑ Odyek, John (5 June 2014). "Four Companies Submit Proposals for Development of Uganda’s Oil Refinery". New Vision. Retrieved 5 June 2014.
  31. ↑ Odyek, John (25 June 2014). "Government Selects Two Final Bidders for Oil Refinery". New Vision. Retrieved 25 June 2014.
  32. ↑ Biryabarema, Elias (17 February 2015). "Uganda Picks Russia's RT Global Resources To Build Refinery". Reuters (London). Retrieved 17 February 2015.
  33. ↑ Odhiambo, Allan (18 February 2015). "Uganda Picks Russian Firm for Oil Refinery". Business Daily Africa (Nairobi). Retrieved 18 February 2015.
  34. ↑ Ssekika, Edward (18 February 2015). "Why Government Picked Russian Firm for Oil Refinery". The Observer (Uganda). Retrieved 18 February 2015.

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