Uganda’s energy minister announced on Tuesday that the country is in talks to build a $4 billion refinery for some of its crude oil, with an investment business headed by a member of the royal family of Dubai.
Uganda ended talks with a group that includes a division of the American company Baker Hughes (BKR.O) in July of last year. The reason for the termination was Uganda’s inability to raise funds on time.
Uganda’s budding hydrocarbons industry depends on the 60,000 barrels per day refinery.
“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 Jan. 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 fields are jointly operated by the Ugandan government via the state-run Uganda National Oil Company, China’s CNOOC (0883.HK), opens new tab and France’s TotalEnergies (TTEF.PA), opens new tab.
President Yoweri Museveni’s government wants to process some of its crude domestically to boost employment and benefit from technology transfer.
Nankabirwa also said Uganda had on Tuesday issued a licence to CNOOC to produce Liquefied Petroleum Gas at a plant to be constructed in the Kingfisher development area that 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.
