Kampala, Uganda–The Ugandan government has shortlisted six international oil companies, including a Chinese consortium, for the building of a $2.5 billion oil refinery in the oil-rich Lake Albertine Rift basin.
A lead investor for the 60,000 barrels-a-day refinery, to be located in Hoima district some 230 kilometres west of the capital Kampala, is vital for the development of the country’s oil fields, which are believed to contain as much as 3.5 billion barrels of crude.
The Energy and Minerals Ministry said in a statement Monday that the company to lead the project will be selected during the first half of 2014. “We look forward to working with our final partner to develop this refinery and further unlock Uganda’s vast energy resources,” said Irene Muloni, minister for energy and minerals.
The shortlisted companies are a Chinese consortium, led by Petroleum Pipeline Bureau, Japan’s Marubeni Corp., London-listed Petrofac Ltd. and Swiss-based Vitol Group SA. The others are South Korea’s SK Energy Co. and a consortium led by Russia’s RT Global Resources.
These companies will now enter the next phase of the tender process in which they will be asked to submit a full proposal for the financing, development and operation of the project, Ms. Muloni said.
Company officials couldn’t be reached for a comment immediately.
U.S. investment company Taylor-DeJongh is the lead adviser on the selection of the lead investor.
Uganda issued an international tender for the construction of the refinery in October, a few weeks after the country issued its first oil production license to China’s Cnooc Ltd.
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.
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.
Uganda discovered commercial oil in 2006 but development has been delayed due to a litany of disagreements between government and companies-ranging from tax disputes to development plans.
Uganda’s oil production is expected to plateau at around 200,000 to 230,000 barrels a day by 2020.