Final negotiations for the financing and construction of Uganda’s US$4bn domestic refinery began this month after Alpha MBM Investments from the United Arab Emirates was chosen by the government of Uganda as preferred bidder
The breakthrough was announced by Ruth Nankabirwa, Uganda’s Minister of Energy and Mineral Development, at the first of a series of press conferences due to run quarterly giving up-to-date overview of the country’s transformative oil and gas project.
After considering private sector partners, the Ugandan President Yoweri Museveni directed considering public sector ownership for the refinery as well.
"The Ministry of Energy and Mineral Development engaged stakeholders to develop a strategy for the refinery project and received Expressions of Interest (EOIs) from several potential investors and evaluated,’’ she said.
"After thorough consultations and evaluations by the government, a Memorandum of Understanding (MoU) was signed on 22 December 2023 between the Government of Uganda and Alpha MBM Investments LLC from the United Arab Emirates, outlining cooperation and negotiation terms for the Refinery Project.
"I am happy to report negotiations of the key commercial agreements between the Government and Alpha MBM Investments LLC commenced on 16 January 2024 and are expected to be concluded within three months.’’
Alpha MBM is a UAE-based investment house led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of the Dubai Royal Family. The company describes Uganda as 'an untapped market with the power to create opportunities where none were perceived'.
Before giving an overview of the hydrocarbon sector in Uganda, Nankabirwa reaffirmed her country’s commitment to 'developing the country’s oil and gas resources responsibly, openly, and profitably'.
"The sector developments are projected to contribute US$8.6bn to the country’s GDP and have created over 12,000 jobs. This is the beginning of a long-term economic upliftment, promising benefits for the next 25+ years," she said.
In a detailed overview, the Minister laid out the progress made in Uganda’s four existing major oil and gas projects: two upstream projects -- the Tilenga and Kingfisher production fields in western Uganda, and two midstream projects, the Hoima refinery and the East African Crude Oil Pipeline for shipping crude to the Indian Ocean coastline for export.
"These projects, combined with the government's investment in supportive infrastructure, signify an investment of approximately US$20bn in Uganda's economy,’’ Nankabirwa said.
With Tilenga and Kingfisher expected to produce respectively 190,000 and 40,000 barrels of crude oil daily at peak production, other exploration licences in the western basin, as well as those from the central and eastern regions could lead to higher daily production levels as the country matures as an oil producer.
