Uganda has awarded a $4billion oil refinery project to a consortium led by RT Global Resources, which is owned by Russia’s Rostec.
The government and RT will negotiate the terms of a joint venture to engineer and finance the $2.5billion refinery plus a product pipeline and associated infrastructure.
The country struck hydrocarbon deposits in 2006 but commercial production was delayed and is not expected to start until 2018 at the earliest.
Uganda plans to build the refinery to process its hydrocarbon reserves, estimated at 6.5billion barrels, which lie along its border with the Democratic Republic of Congo.
Irene Muloni, minister for energy and mineral development, announced that RT Global Resources had been picked as the preferred bidder.
RT Global Resources, leads a consortium that also includes Russian oil producer Tatneft and VTB Capital, the investment banking unit of Russia’s No. 2 bank VTB. Others partners include South Korea’s GS and Telconet Capital Ltd Partnership.
Total, CNOOC (China National Offshore Oil Corporation) and Tullow Oil are developing Uganda’s fields.
There had previously been disagreement between Tullow and the Ugandan government over the size of the refinery.
The government had wanted to build a refinery with capacity to process 120,000 barrels per day but it was later agreed to scale that back to 60,000 barrels per day.