Uganda warned over oil refinery plan

Tullow workers at a rig in Buliisa, western Uganda in this 2012 file photo. Oil explorers are pushing for the construction of an oil pipeline to export crude while the Ugandan government has pushed for a refinery first. 

French major Total E&P has warned that Uganda’s oil could take longer to get out of the ground if the country does not build an export pipeline.

The Uganda government wants to build a refinery to take advantage of the by-products of the 3.5 billion barrels of oil discovered so far but Christophe de Margerie, the chief executive officer of the oil company, said this will cause delays.

“The project to develop vast oil reserves in Uganda would not get off the ground until government gave the go-ahead for an export pipeline,” he said.

Total, which operates Block 1 A in partnership with Tullow and China’s CNOOC, has on several occasions advised government to construct an export pipeline, alongside the refinery.

Mr Margerie’s views were reiterated last week in a meeting between President Yoweri Museveni and Total’s president for Africa, Jacques Marraud des Grottes, and senior vice president for Africa and Middle East, Momar Nguer, on the state of the country’s oil developments.

No agreement was reached in the meeting. Uganda wants a refinery developed in a phased manner with the capacity to process 60,000 barrels of crude oil per day by 2015, although Total says a realistic timeline for oil production is likely to be 2017.

The oil companies prefer an oil pipeline alongside the refinery to allow them recover their money faster.

Uganda is currently looking for a “financially viable investor” in a public-private partnership to construct the refinery.

Bashir Hangi, the refinery project’s communications officer, told the Daily Monitor that government’s plans for a refinery are feasible and will be realised with or without the assistance of the oil companies.

“A number of companies have expressed interest in partnering with government, but we are still wrapping up some concerns, and shall open the bidding process any time soon,” Mr Hangi said.

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