BY IBRAHIM KASITA

Uganda and Kenya have agreed to form a joint partnership to build an oil refinery and a pipeline to exploit oil and gas in the Lake Albert basin. “President Yoweri Museveni has said the East African region needs to cooperate in proposed oil refinery in Uganda,” a State House statement said yesterday.

The President made the comments recently at State House, Entebbe, during a meeting with the Kenyan government delegation and the UK-based ESSAR Group, which operates the oil refinery in Kenya.

The delegation was led by the Kenyan foreign affairs minister Moses Wetangula and ESSAR Group chief Prashant Ruia.

ESSAR Group has a turnover of $20b from its petroleum venture in India. It also has investments in steel production.

“In order to create a framework to work out details on how to reconfigure the infrastructure from Kampala to Mombasa, through Eldoret, there is need to have a reverse flow system from Kampala and Eldoret,” Ruja said.

The ESSAR CEO revealed that their oil exploration project in India, which produces 350,000 barrels a day, will expand to 700,000 per day.

The proposed partnership will intensify havoc already wrecked to Tullow Oil, which had anticipated selling two-thirds of its interest in the Lake Albert basin to France’s Total and China’s National Off-shore Oil Company.

This was after Tullow claimed to have purchased Heritage’s interest in blocks 1 and 3A, which the Government has taken over.

“A feasibility (study) has been conducted on the construction of the refinery in Uganda and has been submitted to my ministry,” Hilary Onek, the energy and mineral development, disclosed.

“The refinery is expected to process Uganda crude oil for domestic consumption and export,” the minister said.

Foster Wheeler Energy Ltd, a UK-based firm, secured the contract to carryout a feasibility study for the construction and development of oil refinery in Uganda.

The refinery development programme will go through five stages; feasibility study, project promotion and attracting developers, and the front-end engineering design.

Other stages include engineering procurement and construction and commission and operation of the refinery.

The energy minister said the Kenya Government and ESSAR have expressed interest in a joint venture with the Uganda government in the oil refinery and pipeline.

The Kenyan Energy Minister Kiraito Murungi noted that there is no need for Kenya to import oil from the Middle East when Uganda has the capacity to supply them.