News Post
Land Cleared for Uganda Oil Refinery
Uganda has started moving people to make room for an an oil refinery to be commissioned in 2017.
The refinery will be located in Hoima, Western Uganda, near the oil fields.
Speaking in Nairobi on Tuesday on the sidelines of the East African Power Industry Convention, Uganda's State Minister for Energy, Simon D'Ujanga, said his government is currently compensating people living on the 29-square kilometre piece of land, on which the facility will be located.
PRIVATE INVESTORS
"We are paying off the people to make way for the construction," Mr D'Ujanga said.
The refinery will be 40 per cent owned by the five East African Community member states - Uganda, Rwanda, Kenya, Tanzania and Brundi.
The remaining 60 per cent will be owned by private investors, who, according to Mr D'Ujanga, will be sourced from countries with experience in handling oil refinery facilities such as India, Korea and Japan.
The combined investment decision comes at a time when East Africa is emerging as an oil and gas producer, with commercially viable quantities of oil and natural gas having been found in Uganda and Tanzania, respectively.
Though the commercial viability of Kenya's oil resource is yet to be proven, reports from British oil explorer Tullow and its Canadian counterpart Africa Oil Corporation have indicated that the country's resource exceeds the threshold for production.
The refinery will have an initial capacity to process 60,000 barrels of oil a day, which will later be doubled.
Heads of States of the EAC countries are set to meet over the refinery. "There will be a meeting in Kigali later this month, where we will make a final investment decision. There have been other meetings, including recently in Mombasa," Mr D'Ujanga said.
INDUSTRY NEEDS
Having a refinery in Uganda is important for the country that is on the verge of producing its oil.
For Kenya, the facility could lead to a cut in the cost of imported refined product, which currently caters for 60 per cent of the industry needs, while 40 per cent is sourced as crude product for refining at the Mombasa-based Kenya Petroleum Refineries.
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