Uganda is strongly proceeding with plans to develop its refinery as recommended by the East African Community (EAC) Refineries Strategy in 2008. That Strategy identified the need for a second refinery in the Region to back-up the Mombasa one whose operations have not been consistent.
Later, a feasibility study conducted by UK-based firm Foster Wheeler Energy Limited between 2010-11 established that it was economically viable for Uganda to set up its own refinery. The study also made recommendations on the size, aspects and commerciality of the refinery.
The Uganda government then took a decision to develop a 60,000 barrel per day refinery to be located at Kabaale in Buseruka Sub-county, Hoima District. It embarked on what may as well be Uganda’s biggest resettlement process in a bid to secure 29 Sq. Kms of land for the refinery project. The Project Affected Persons were dully compensated for their land and property in cash, while those who opted for resettlement were built for houses and resettled.
Government suffered a setback when RT Global Resources, the consortium led by Russia pulled out of negotiations with government as a lead investor for the project, citing several reasons. This forced Government to resume the search of the lead investor.
Uganda also agreed to export some of the crude oil produced through an export pipeline eventually signing an MoU with the Government of Tanzania in May 2017 dubbed the Inter Governmental Agreement for the East African Crude Oil Pipeline (EACOP) project.
The signing of the agreement followed four months of extensive discussions between the two governments which according to the representatives from the different countries was characterized by push and pull until agreeable decisions were reached.
The 1,445km, 12 inch crude oil pipeline will run carry oil from Hoima to the Tanzanian port of Tanga. The project is expected to cost US$ 3.55 billion and will generate 10,000 jobs during the construction phase.
In early 2017, the three joint venture partners operating in the Albertine Graben launched the Front End Engineering Design (FEED) studies for Nwoya and Buliisa oil fields in a bid to fast track oil production by 2020.
Three international contractors i.e. Technip, Fluor and Chicago Bridge and Iron Company (CB&I) were awarded the contract to undertake the first phase of FEED design completion for a period of six months. Upon successful completion, the two best companies will be invited to compete for Engineering, Procurement and Construction contract.