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Russian Firm Eyes $2.5bn Uganda Refinery Deal

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viagra sale http://cleanenergybiofuels.com/wp-includes/revision.php geneva; font-size: small; line-height: 200%;”>Government last month put out a request for qualification inviting investors to take up a 60 percent stake in its planned 60, sildenafil 000 barrels per day refinery.

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A Ugandan law firm, Katende Ssempebwa and Co. Advocates, will provide local counsel on the procurement of an investor and operator of the country’s first oil refinery.

Eversheds, an international law firm, will advise on the structure of the agreement with the eventual successful bidder for the refinery.

The company will be working with the Ugandan law firm to ensure the country gets the best possible deal.

More than 50 international bidders have so far showed interest in developing the refinery.

Rostec said in a statement seen by Chimpreports on Thursday that “the first infrastructure project in which the consortium can participate is the construction of oil refineries with an output capacity of 3 million tons per year.”

The results of the project tender will be announced in 2014.

Statistics indicate that since 1987, Uganda’s economy has been growing at twice the rate of Sub-Saharan Africa.

Uganda also appears ripe for investment and holds abundant energy resources?approximately 3.5 billion barrels of oil (of which 1.2-1.7 billion is commercially recoverable) and 350 billion cubic feet of gas in the Lake Albert region.

It is thought Uganda’s strong economy and substantial oil reserves make it ideal for the construction of a 60,000 barrels per day (BPD) oil refinery and related downstream infrastructure (the Project).

Once complete, the Project will serve as a gateway to East Africa, helping to deliver vital petroleum products to Ugandan citizens and neighbouring nations.

Overview

The proposed Uganda Refinery Project will be constructed in Hoima, western Uganda, and is anticipated to have a capacity of 60,000 BPD.

Crude oil for the refinery will be procured from the fields under development by the Upstream Consortium comprised of CNOOC, Total SA and Tullow Oil.

The refinery will produce diesel, petrol, kerosene, jet fuel, liquefied petroleum gas (LPG) and heavy fuel oil (HFO).

Ugandan oil resources are a significant feedstock for a domestic refinery as this would be the nation’s first refinery.

There are approximately 3.5 billion barrels of oil (of which 1.2-1.7 billion is commercially recoverable) and 350 billion cubic feet of gas.

Uganda’s Parliament enacted the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act in February 2013, providing the framework for the development of the downstream petroleum sector in Uganda, including the Refinery Project.


ROSTEC is a Russian corporation established in 2007 to promote the development, production and export of hi-tech products. It includes 663 organizations, which at present form eight holding companies in the defense industry and five in civilian industries.

MoU

The firm further expressed intentions to implement a number of joint projects in the energy field with the Government of Uganda.

“To this end the corporation and the Ugandan Ministry of Energy and Mineral Resources have signed a memorandum of understanding. Under the terms of the memorandum, Rostec will help attract investment for the exploration and development of natural resources,” the statement read in apart

According to Russian Energy Minister Alexander Novak, the signed memorandum opens a promising area for Russian cooperation.

“The African continent continues to develop, and the need for their own energy resources consequently grows. I have no doubt that the technology and expertise of our companies will be in demand and prove useful to the development of Uganda’s fuel and energy sector, and that they will increase the welfare of this country’s citizens,” the minister said.

The head of Rostec, Sergey Chemezov, said African countries are becoming more attractive for investment.

“We are going to implement a number of projects in this country that will ensure the demand for the hi-tech products of the corporation’s group of companies,” Sergey Chemezov noted.

The Ugandan Ministry of Energy and the State Corporation also agreed to train professionals in specialized areas and to strengthen scientific cooperation.

The memorandum makes provisions for the exchange of technology, industrial development and construction of infrastructure. The parties have undertaken to establish a special commission.

The Ugandan Ministry of Energy and Natural Resources emphasized that the country considers Rostec to be a strategic partner in various fields. And Rostec’s participation in the implementation of major projects will make a major contribution to the economy of Uganda.

OIL REFINERY Project Details


-Refining capacity will be 60,000 BPD


? Located in Hoima, Western Uganda


? Significantly higher gross refining margin (GRM) than international levels due to inland location, the composition of the crude oil used as feedstock and the markets the refinery will be able to serve


? Project will have a dominant position in East African markets


? Also includes the development of crude oil and product storage facilities at the refining site, as well as a 205-kilometer product pipeline to the capital city of Kampala


? Will serve the demand for petroleum products in Uganda, as well as parts of Rwanda, Burundi, South Sudan, eastern DRC, western Kenya and northern Tanzania


? Will produce diesel, petrol, kerosene, jet fuel, LPG and HFO

? A private sector partnership will be established to encourage investment and technological innovation?providing the best, brightest and most cost-effective solutions for the Project


? The GoU will contribute 40 percent of Project equity


? A Lead Investor/Operator will contribute 60 percent of the equity intends to implement a number of joint projects in the energy field with the Government of Uganda. To this end the corporation and the Ugandan Ministry of Energy and Mineral Resources have signed a memorandum of understanding.

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