Wednesday, June 12, 2024

Uganda in talks with UAE investment firm over oil refinery

President Yoweri Museveni’s government wants to process some of its crude domestically to boost employment and benefit from technology transfer.

• January 23, 2024
Yoweri Museveni
Uganda president, Yoweri Museveni (Credit: Chief Observer)

Uganda is negotiating with an investment company led by a Dubai royal family member to develop a planned $4 billion refinery for some of its crude oil, its energy minister said on Tuesday.

In July last year, Uganda terminated negotiations with a consortium that included a unit of U.S. firm Baker Hughes 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 the 22 of December 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 January 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 Congo.

The Ugandan government jointly operates the fields via the state-run Uganda National Oil Company, China’s CNOOC, and France’s TotalEnergies.

President Yoweri Museveni’s government wants to process some of its crude domestically to boost employment and benefit from technology transfer.

On Tuesday, Mr Nankabirwa also said Uganda had 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 say how much gas CNOOC would produce annually.

Uganda’s gas reserves are estimated at 500 billion cubic feet.

(Reuters/NAN)

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