Uganda to announce oil refinery investor in July

Uganda will announce the lead investor and operator for its planned oil refinery in July and expects to conduct a licensing round for its vacant petroleum exploration acreage next year, a senior energy official told Reuters on Thursday.

The east African country first discovered crude deposits in the Albertine rift basin along its border with Democratic Republic of Congo in 2006 and reserves are estimated by the government at 3.5 billion barrels.

The government moved closer to getting the hydrocarbons industry off the ground last month when it signed a memorandum of understanding with three oil firms laying out a blueprint for the commercial development of its oil fields.

According to the deal, crude produced by the three firms - Britain's Tullow Oil, France's Total and China's CNOOC - will be shared between a thermal power generation plant, a planned refinery and an export pipeline.

Commercial oil production is expected to begin in 2016 at the earliest.

In December the energy ministry announced five consortia and one individual firm had been shortlisted to bid for the $2.5 billion refinery. The lead investor - which will also operate the plant - is expected to take up a 60 percent stake, with the remainder going to the Ugandan government.

The individual company shortlisted is Marubeni Corp, while the five consortia are respectively led by Petrofac, Global Resources, China Petroleum Pipeline Bureau, SK Energy and Vitol.

Robert Kasande, the energy ministry official overseeing the project, said the government had been holding pre-bidding talks with those shortlisted.

"They are expected to submit their final proposals in May, then evaluation will follow," Kasande said. "In July we will announce the winner," he added.

Uganda has scaled back its refining ambitions over the past two years. It now plans to start with a refinery with capacity of 30,000 barrels per day (bpd), gradually rising to 60,000 bpd. It had initially wanted a plant that could process 120,000 bpd but oil firms argued that would not be commercially viable.

About 60 percent of the Albertine graben, which measures about 23,000 square kilometres, remains unlicensed, according to the energy ministry's petroleum exploration and production department.

"We also hope next year we should be ready to license another batch of (exploration) blocks," said Kasande. Reuters