June 4, 2014

Two Bidders Pullout of Uganda’s Refinery Construction Race

The Petroleum Exploration and Production Department (PEPD) has today confirmed that four of the six shortlisted consortia have submitted detailed proposals for the construction of a refinery in Buseruka Sub county, Hoima District.
Refinery
In a statement, Fred Kabagambe Kaliisa, the Permanent Secretary in the Ministry of Energy confirms that PETROFAC from the UAE and VITOL SA from Switzerland did not submit detailed proposals.

Part of the statement reads that PETROFAC was “opting to concentrate on their core business in Engineering, Procurement and Construction (EPC)” whereas, VITOL SA is said to had have internal disagreements with other members of the consortia.

The Uganda government is looking for a lead investor that will take up to 60percent in the proposed 60,000barrels per day oil refinery in Hoima District. The six bidders met with government officials in March 2014, and thereafter were required to submit detailed proposals.

They also travelled to the 29square kilometers of land acquired by government for the refinery.

The four remaining bidders include China Petroleum Pipeline Bureau (CPPB), Marubeni Corporation from Japan, RT – Global Resources from Russia and SK-Group from South Korea. The proposals submitted by the four will now be evaluated for the next one month. Negotiations are expected to be concluded by the fourth quarter of 2014 and winner will be announced.

“We expect that the bids submitted will be in line with Government of Uganda’s requirements for a credible, experienced and financially capable partner to work with Uganda to develop a refinery,” Kaliisa said in the statement.

The government has insisted on Uganda having its own refinery to add value to the oil, which it says generates greater returns for the country. According to government officials, it also reduces the dependence on fuel imports from The Port of Mombasa.

“One of the Government’s objectives is to select an investor that will develop a refinery to convert Uganda’s waxy crude oil into the desired petroleum products that meet set standards”, Mr. Robert Kasande, the Refinery Project Manager in Ministry of Energy and Mineral Development added.

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