Uganda has begun discussions over the development of a potential oil refinery project with unnamed partners from Africa, the Middle East, and China.
The refinery would have the capacity to process 60,000 barrels of crude oil per day.
This action is being taken in spite of the fact that the Albertine Graben Refinery Consortium (AGRC) would withdraw from the $4 billion refinery project in June of 2023.
The AGRC was unable to fulfil the time schedule for making a final investment decision because it was unable to successfully obtain money for the project.
Because of this, the consortium was stripped of its rights to construct the refinery, and the Ugandan government has been compelled to begin the process from the beginning.
The news agency said that Ali Ssekatawa, director of legal and corporate affairs for the Uganda Petroleum Authority, stated that the Uganda National Oil Company will continue to progress the construction of the refinery project while the government hunts for a strategic project partner.
The director promised that an update will be provided about the following measures within the next three months.
The statement made by Ssekatawa was, “There is a lot of appetite and interest in developing the refinery.”
The fact that discussions have taken place with the Algerian state-owned enterprise Sonatrach was verified by him. Discussions have also begun with a number of interested parties from China, the Middle East, and Africa at this point.
Ssekatawa continued by saying, “The preferred option is the Uganda National Oil Company working together with another national oil company to take forward this project.”
AGEC has already finished the front-end engineering and design work for the planned project, in addition to conducting environmental impact studies.
In addition, according to Ssekatawa, the majority of the land necessary for the construction of the refinery and the related pipes has been purchased and cleared.
In Kabaale Parish, located in Buseruka Sub-county, Hoima District, the planned refinery would be constructed over a land area that is 29 km squared.
The companies that makeup AGRC are as follows: the Oil and Gas branch of General Electric, YAATRA Ventures (US) of India, Intercontinental Asset Holdings, and Saipem of Italy.
Read also: Nigeria launches Dangote refinery in Lagos
Uganda’s earlier sojourn in oil and gas
In 2021, Uganda began attempts to launch its first oil and gas initiatives. As a landlocked nation, all assets are located on land, near Lake Albert, on the country’s western border with the Democratic Republic of the Congo.
The Jobi-Rii discovery on the northern end of the lake in 2009 was the largest basin discovery to date. The first discoveries were made almost 15 years ago with the Kingfisher-1 well on the southern end of the lake, followed by the Jobi-Rii discovery on the northern end of the lake in 2009.
In 2015, Uganda held its first licensing round, offering six blocks and granting two licences. Tullow was the operator of the blocks for a number of years and made multiple discoveries that it planned to farm down in 2017.
After a lengthy process, this was denied, but it was agreed that Tullow would transfer its entire equity stake in the properties to Total in 2020. Total and CNOOC were unable to reach a definitive investment decision in 2020 due to the effects of COVID-19 and budgetary constraints.
The companies remained anxious to obtain approval for the multibillion-dollar Tilenga and Kingfisher projects, and a decision was made on April 9, 2021, with the first crude expected in 2025.
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Expectations ahead of 2025 Tilenga and Kingfisher projects completion
Kingfisher oilfield is expected to produce 40,000 barrels each day when production is at its peak, while Tilenga is expected to produce 190,000 barrels. Both form a key part of a major national project expected to be completed within two years.
Uganda is estimated to have recoverable oil reserves of at least 1.4 billion barrels. Drilling began in January this year (2023), the project is expected to be completed within two years.