Uganda will in 2012 start the phased development of an oil refinery that will meet local demand of up to 25,000 barrels per day (bpd) before scaling up to 200,000 bpd by 2016 said Fred Kabagame Kabaiisa,” permanent secretary at the Mines and Energy Ministry.
Keen on avoiding pitfalls that have bedeviled other sub-Saharan oil producers Uganda has decided against exporting crude oil. The government says that refining capacity will guarantee higher earnings, generate more employment and guarantee that the country reaches middle-income status.
The plant will match other planned refineries in South Africa and Angola to be one of the biggest in the region. “The whole of 2011 will go into serious planning for development, says PS Kabagame. “That will include getting land and sitting with financiers and interested developers to tie into financing agreements.” Kabagame says his ministry and Uganda’s cabinet were discussing a feasibility study carried out by Foster Wheeler.
Uganda has already identified a suitable site for the refinery in Hoima district in Block 2 operated by Tullow oil. Kabagame said the cabinet will soon make some key policy decisions on financing and shareholding structures for the refinery.
Uganda has discovered commercial quantities of hydrocarbons in the Lake Albert rift basin along its western border with the Democratic Republic of Congo from 2006. Exploration firms estimate reserves of up to 2.5 billion barrels.
“Between 2012 and 2016 the development of the refinery will be planned,” Kabagame said. “We will start with a limited production to satisfy the in-house market demand, then will go into the bigger production to satisfy the international market.”