Kampala – The Ugandan government on Tuesday invited companies to tender for the construction of a $2.5 billion oil refinery in the oil-rich Lake Albertine Rift basin, a senior government official said.
The state-run Petroleum Exploration and Production Department issued a prequalification notice, calling on interested companies to bid for the construction of the 60,000 barrels-a-day refinery in Hoima district, 230 kilometres west of the capital Kampala, Robert Kasande, the department’s deputy head, told Dow Jones Newswires.
The tender comes two weeks after Uganda issued its first oil production license to China’s Cnooc Ltd. , raising the country’s profile in the global energy market. Uganda’s oil fields are believed to contain up to 3.5 billion barrels of crude, with less than 40% of its oil region explored.
“We are looking for the lead investor who will help seek financing and construction of the refinery,” Mr. Kasande said, adding the whole process would take around six months, meaning construction wouldn’t start until next year.
U.S. investment company Taylor-DeJongh is the lead adviser on the selection of the lead investor.
Construction of the refinery and development of the giant kingfisher oil field in the Lake Albertine Rift basin will take place simultaneously, with the aim of both projects coming on stream by 2017-18.
The refinery will be developed in phases, with the initial phase producing 30,000 barrels a day, before gradually increasing to 60,000, Mr. Kasande said.
In April, the government agreed to approve the construction of a smaller refinery along with a crude export pipeline to the north Kenyan coast. Cnooc said it was interested in investing in the refinery, days after the Ugandan government said it would pay for Chinese-built infrastructure using future oil revenues.
The Chinese company, together with U.K.-based Tullow Oil PLC and France’s Total SA, are in the process of developing Uganda’s oil fields in the Lake Albertine Rift basin. Cnooc was the only company among the joint-venture partners to express an interest in the refinery project.
Uganda is expected to reach plateau oil production of around 200,000 to 230,000 barrels a day by 2020.
