Uganda’s energy minister announced that they are in negotiations with an investment company, spearheaded by a member of Dubai’s royal family, for the development of a proposed $4 billion refinery to process a portion of the country’s crude oil.
Uganda in July last year terminated negotiations with a consortium that included a unit of U.S. firm Baker Hughes (BKR.O.), opening a new tab over its failure to mobilise financing in time.
Uganda is counting on the 60,000 barrel-per-day refinery for its nascent hydrocarbons industry.
“Expressions of interest were received from several potential investors, and they were evaluated, following which a memorandum of understanding was signed on December 22, 2023,” Minister of Energy and Mineral Development Ruth Nankabirwa said at a news conference.
Negotiations on the key commercial details between the government and United Arab Emirates-based Alpha MBM Investments started on Jan. 16 and are expected to be completed within three months, she added.
Alpha MBM Investments’ website says it is led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of Dubai’s royal family.
Uganda expects to start pumping crude commercially in 2025 from fields in the Albertine rift basin in the country’s west, near the border with the Democratic Republic of the Congo.
The fields are jointly operated by the Ugandan government via the state-run Uganda National Oil Company, China’s CNOOC (0883.HK), opens a new tab, and France’sTotalEnergies.
President Yoweri Museveni’s government wants to process some of its crude domestically to boost employment and benefit from technology transfer.
Nankabirwa also said Uganda had on Tuesday issued a licence to CNOOC to produce liquefied petroleum gas at a plant to be constructed in the Kingfisher development area where CNOOC operates.
Kingfisher is one of Uganda’s two commercial oil development fields. The second, Tilenga, is operated by TotalEnergies.
The minister did not disclose the annual gas production quantity to CNOOC. Uganda’s gas reserves, estimated at 500 billion cubic feet, were not specified in terms of annual production.
