Oil Refinery Bidders To Submit Final Offers By Mid-January 2015

The two consortia left in the running to be the lead investor for construction of the 60,000 barrels per day refinery have been given up-to 19th January 2015 to submit final offers.

A press statement issued Wednesday afternoon by the Petroleum Exploration and Production Department (PEPD) in Ministry of Energy and Mineral Development indicates that SK Energy from South Korea and RT Resources from Russia had now concluded preliminary negotiations with the government and now had to make revised offers.

“The bidders were then issued with the Request for Final Offer (RFFO) with a submission deadline of 19th January, 2015,” Fred Kabagambe-Kaliisa, the Permanent Secretary Ministry of Energy and Mineral Development said.

The consortia will be required to submit revised technical, commercial and legal offers. According to the statement, they will have included a technical concept design for the refinery, the implementation and operating plans of the project. Additionally, the bidders are required to include a National Content policy in their final offers.

“They will also detail their financial and long-term business plans and review the terms of the different Project Agreements proposed by Government,” the statement further reads.

The winning bidder is expected to be announced in February 2015, according to the statement. This is an extension from a previous projection of having the winning bidder announced by end of 2014.

“During the negotiations, the bidders requested for an incentive package and this required additional time for consultations with other line Ministries and Government Agencies,” says Kabagambe-Kaliisa.

Incentive packages for large infrastructure projects usually include specific tax exemptions and favourable capital recovery terms.

The process to seek for the lead investor for the refinery started in October 2013, when the government called for bids. This list of seven initial bidders was then cut down to the existing two in June 2014.

The project includes a refinery in Buseruka Sub County, Hoima District, crude oil and product storage facilities on site.  It will also be tasked to develop a 205-kilometer product pipeline to a terminal in Buloba, about 15kilometers West of Kampala.

The government is still hopes to have this project completed by 2018. There are still 742 residents on the 29square kilometres of land identified for the construction of the refinery who are yet to be compensated. Another 96 residents who opted to be resettled are yet to be moved.  The government confirms they have identified 533 acres of land where the 96 will be resettled.

Subscribe for notification