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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--As Uganda's plans for an oil refinery and an East African pipeline network to Kenya's Indian coast gain momentum, the government has earmarked $12.7 million to complete the acquisition of land for the construction of the refinery in Kabaale, Buseruka County, in the Hoima district.
Moves to compensate people living around the proposed refinery site started last December, but only 50% have so far received any compensation due to limited available funds.
In the next financial year, the government expects to undertake a route survey, a resettlement action plan, and environmental baseline studies for the pipelines from the oil fields to the refinery, and from the refinery to the main storage point at Buloba.
Funds also are to be set aside to support pipeline developments and to establish new petroleum institutions (Petroleum Authority of Uganda, the National Oil Company and directorate of petroleum). Funding also will be made available to monitoring the development activities of the Kingfisher production license and the next round of licensing.
It is doubtful whether the land acquisition will be completed by the revised deadline of September this year, due to funding problems and contention over some of the conditions relating to compensation and relocation.
In the first week of this month, four of the six shortlisted consortia submitted detailed proposals to the government for the role of lead investor: state-owned China Petroleum Pipeline Bureau (Langfang, China), Marubeni Corporation (OTC:MARUY) (Tokyo, Japan), RT Global Resource (Moscow, Russia) and SK Group (Seoul, South Korea).
Petrofac (LSE:PFCL) (London, England) and Vital S.A. (Switzerland) did not submit proposals. Petrofac indicated that it was concentrating its core services of engineering, procurement and construction (EPC) on the upstream petroleum sector, and Vitol cited internal reasons. The evaluation of the proposals is expected to take one month, after which the results will be announced, followed by the finalization of negotiations with the lead investor to be completed toward the end of 2014.
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 petroleum products that meet set standards, according to Robert Kasande, project manager in the Ministry of Energy and Mineral Development.
Reports say that Uganda President Yoweri Museveni has accepted that a portion of the country's crude production will be exported, with commercial production scheduled to begin in 2017. He originally supported the idea of a large refinery with the capacity to refine all production. Oil companies have insisted that a pipeline to the coast is important to quickly recoup the project development costs.
"Our crude oil will be used in the refinery to produce final products," Museveni said. "Part of it will be exported as crude, and part of it will be used for electricity generation and for assisting in crude extraction."
Since 2006, Uganda has discovered about 3.5 billion barrels of oil in 40% of the potential reserve area. Exploration continues.
The president also said that if enough gas is produced, it will be used in steel manufacturing fed by rich iron-ore deposits in the Kabale-Kanungu areas and in the Sukuru Hills near Tororo in eastern Uganda.
He went on to list the country's resource reserves and potential: 200 million tons of iron ore; 230 million tons of proven phosphates; 300 million tons limestone for cement production; 3 billion tons of aluminum clays; more than 1 million tons of copper; and 5.5 million tons of cobalt. These deposits are all in specified areas and will attract mining projects.
Also, Uganda has more than 800,000 tons of wolframite. Uganda will train nuclear scientists following the discovery of major deposits of uranium, he said.
For related information, see May 9, 2014, article - Uganda Looks to Refinery, Pipeline and Power Projects.
View Project Report - 300148356 300102385 300035994 300035992 300102383
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Moves to compensate people living around the proposed refinery site started last December, but only 50% have so far received any compensation due to limited available funds.
In the next financial year, the government expects to undertake a route survey, a resettlement action plan, and environmental baseline studies for the pipelines from the oil fields to the refinery, and from the refinery to the main storage point at Buloba.
Funds also are to be set aside to support pipeline developments and to establish new petroleum institutions (Petroleum Authority of Uganda, the National Oil Company and directorate of petroleum). Funding also will be made available to monitoring the development activities of the Kingfisher production license and the next round of licensing.
It is doubtful whether the land acquisition will be completed by the revised deadline of September this year, due to funding problems and contention over some of the conditions relating to compensation and relocation.
In the first week of this month, four of the six shortlisted consortia submitted detailed proposals to the government for the role of lead investor: state-owned China Petroleum Pipeline Bureau (Langfang, China), Marubeni Corporation (OTC:MARUY) (Tokyo, Japan), RT Global Resource (Moscow, Russia) and SK Group (Seoul, South Korea).
Petrofac (LSE:PFCL) (London, England) and Vital S.A. (Switzerland) did not submit proposals. Petrofac indicated that it was concentrating its core services of engineering, procurement and construction (EPC) on the upstream petroleum sector, and Vitol cited internal reasons. The evaluation of the proposals is expected to take one month, after which the results will be announced, followed by the finalization of negotiations with the lead investor to be completed toward the end of 2014.
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 petroleum products that meet set standards, according to Robert Kasande, project manager in the Ministry of Energy and Mineral Development.
Reports say that Uganda President Yoweri Museveni has accepted that a portion of the country's crude production will be exported, with commercial production scheduled to begin in 2017. He originally supported the idea of a large refinery with the capacity to refine all production. Oil companies have insisted that a pipeline to the coast is important to quickly recoup the project development costs.
"Our crude oil will be used in the refinery to produce final products," Museveni said. "Part of it will be exported as crude, and part of it will be used for electricity generation and for assisting in crude extraction."
Since 2006, Uganda has discovered about 3.5 billion barrels of oil in 40% of the potential reserve area. Exploration continues.
The president also said that if enough gas is produced, it will be used in steel manufacturing fed by rich iron-ore deposits in the Kabale-Kanungu areas and in the Sukuru Hills near Tororo in eastern Uganda.
He went on to list the country's resource reserves and potential: 200 million tons of iron ore; 230 million tons of proven phosphates; 300 million tons limestone for cement production; 3 billion tons of aluminum clays; more than 1 million tons of copper; and 5.5 million tons of cobalt. These deposits are all in specified areas and will attract mining projects.
Also, Uganda has more than 800,000 tons of wolframite. Uganda will train nuclear scientists following the discovery of major deposits of uranium, he said.
For related information, see May 9, 2014, article - Uganda Looks to Refinery, Pipeline and Power Projects.
View Project Report - 300148356 300102385 300035994 300035992 300102383
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
