HomeRegional NewsEast AfricaUgandan government reports progress on oil refinery establishment

Ugandan government reports progress on oil refinery establishment

In East Africa, Uganda’s finance minister Matia Kasaija has stated that the establishment of an oil refinery that was proposed in 2015, is anticipated  to be concluded by September this year.

Kasaija said this while delivering his budget speech last week, stating that government has put aside 188 billion shillings ($56 million) in the 2016/17 financial year to be used for the development of its oil and gas field, Oil In Uganda reported.

He added that the allocation of funds will also be utilised in boosting skills and institutions in the sector, particularly operationalising the National Petroleum Authority and establishing the National Oil Company (UNOC).

UNOC is said will handle government’s commercial interests in oil and gas including government’s 15% interest in the Production Sharing Agreements with the licensed oil companies and the 40% share in the oil refinery.

Crude oil refinery establishment

In 2015, government granted the Russian infrastructure development firm RT Global Resources the contract to build and operate the $2.5 billion crude oil refinery.

Reuters reported that Uganda intends to build the refinery to process its hydrocarbon reserves, estimated at 6.5 billion barrels, which lie along its border with the Democratic Republic of the Congo.

Oil refinery progress

Land acquisition for the refinery’s development is reported to be 97% complete with 533 acres of land having been acquired in Hoima district for the physical resettlement of the project’s affected persons who opted for resettlement.

According to Kasaija, the Hoima-Tanga crude oil pipeline will be developed as a private investment, to ship Uganda’s crude oil to the east African coast.

Local media reported that President Yoweri Museveni stated that Uganda would start producing oil by 2020.

“By 2020, we shall start pumping out our oil. Even at the low price of $50 per barrel, if we shall be pumping 30,000 barrels per day for the refinery and 170,000 barrels per day for the pipeline, the total will be 200,000 barrels per day that will give us an additional income of $3 billion per year. The government portion of that money will be $2.1 billion, which is 70%.”

Homepage image credit: petroleumindustryreview.com

Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.