Ugandan govt begins oil refinery negotiations

Ugandan govt begins oil refinery negotiations

The Uganda government on Monday began the first round of negotiations with the consortium selected to construct the oil refinery.

Sources at the ministry of Energy and Mineral Development reveal that negotiations are scheduled to take place from 21 to 25 August.

It is hoped that the week-long negotiations will produce a project framework agreement with well-elaborated timelines and apportioned responsibilities.

The negotiators are expected to agree on the final cost of the agreement as well as when the project will commence. The government is also required to put in place all the infrastructure the consortium needs to bring in equipment for constructing the refinery.

Attempts by this publication to seek a comment from Energy minister, Irene Muloni were futile. Her known mobile phone was unavailable at the time of filing this report.

Government late last month chose The Albertine Graben Refinery Consortium to build and operate the 60,000-barrel-a-day refinery that will process crude oil from fields being developed by Total SA and Tullow Oil Plc.

The Albertine Graben Refinery Consortium, which also includes India’s Yatra Ventures LLC, Intracontinent Asset Holdings Ltd and Italy’s Saipem SpA was picked after a review of more than 40 companies.

The government negotiation team is composed of officials from Attorney General’s office, the Solicitor General and ministry of Energy among others. Sources indicate that the government team is joined by a team from the African Legal Support Facility (ALSF) of the African Development Bank.

ALSF has been supporting African governments in the negotiation of complex commercial transactions since 2010.

It provides assistance to African countries to strengthen their legal expertise and negotiating capacity in debt management and litigation, natural resources and extractive industries management and contracting, investment agreements, and related commercial and business transactions.

The latest round of negotiations over the refinery’s framework agreement follows the collapse of negotiations with a previous group led by Russia’s RT Global Resources LLC and South Korea’s SK Engineering & Construction Company previously selected to develop the four- billion-dollar refinery.

The refinery, to be located in Kabaale in Hoima district, is expected to double its crude processing capacity from 30,000 to 60,000 barrels per day.

Beginning in 2020, the plant will be supplied by fields with over 6.5 billion barrels of crude, being exploited by Total, London-based Tullow and China’s CNOOC Ltd.