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Uganda Struggles To Get Financiers For Oil Refinery Project

CNOOC’s rig drilling an oil well

The Government of Uganda is struggling to attract financiers for the oil refinery project.

The Government says that there a number of “outstanding aspects, including mobilisation of financing for the project.

In a statement on Monday, the Ministry of Energy and Mineral Development, said that the Government and the Albertine Graben Energy Consortium (AGEC) have, over the years, made significant achievements in the development of the 60, 000 barrels per day Oil Refinery Project in Uganda.

So far, the Refinery Configuration or Front-End Loading 2 (FEL-2), and the Front-End Engineering Design (FEED), which defines the technical design of the Oil Refinery, have been completed, while the project Environmental and Social Impact Assessment (ESIA) and commercial and marketing studies have been carried out,” the Ministry said.

However, financing of the project remains a big challenge.

Government of Uganda is now open to receiving offers from public sector capital providers to participate in this nationally and regionally strategic project,” the Ministry said.

 Uganda is doing everything possible to have its  first oil in 2025.

Government embarked on the construction of Kabalega International Airport, Uganda’s second international airport after Entebbe, a few years ago hoping that it will be used to deliver materials that will be used in the construction of the refinery.

The airport is set to start air cargo operations by October 2023.

CNOOC Uganda Ltd, the operator of the Kingfisher Development Project (KFDA), started drilling of oil wells earlier this year, while TotalEnergies EP is expected to start drilling of oil wells this month.

At peak, CNOOC is expected to produce 40,000 barrels of oil per day (bopd), while Total is expected to produce 190,000 barrels of oil per day.

Taddewo William Senyonyi
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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