Uganda wants to keep 40% stake in refinery

The Ugandan government wants to retain a 40% stake in the proposed oil refinery project in the country’s Lake Albertine rift basin, where companies are currently developing oil fields containing as much as 2.5 billion barrels of oil, Uganda’s junior energy and minerals minister told Dow Jones Newswires Friday.

The oil refinery, which is expected to cost up to USD 5B, will be developed under a public-private partnership and is billed as the country’s largest ever infrastructure project, Peter Lokeris said in an interview.

“We are negotiating with prospective investors, and by around August we will select the most serious companies and ask them to submit bids,” Mr. Lokeris said, who added that the bid evaluation will be fast tracked to ensure that the contract is issued to allow commencement of construction works early 2013.

The refinery will be developed in a phased manner, starting with around 20,000 barrels-a-day capacity in the initial 2-3 years, before ramping up to 120,000 barrels-a-day by around 2017, Mr. Lokeris said.

Among the companies that have expressed interest include France’s Total SA, China’s Cnooc Ltd. and China National Petroleum Corp. Company officials could not be reached for an immediate comment.

The initial phase of the refinery is expected to supply refined petroleum products to the local market, before exporting to the regional East African market. However, analysts say that since Uganda cannot consume 120,000bopd, it may not be viable to build a larger refinery, whose products cannot be sold on the local market.

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