French oil giant Total has offered to take up a 10 per cent stake in Uganda’s oil refinery project, subject to government approval.
The firm has written to President Yoweri Museveni seeking to take up shareholding in the greenfield project estimated to cost $4 billion.
“Total has written to us indicating they want to take a stake in the refinery,” said a senior official at the Ministry of Energy and Mineral Resources.
On Thursday, the oil firm confirmed the development.
“Total understands the strategic importance and value of the refinery project for the Republic of Uganda,” it said, adding that it hopes “to assist with technical expertise if deemed necessary.”
Uganda's oil fields are jointly owned by Total, Britain's Tullow and China's CNOOC. They each own a third of oil production licences with an estimated output of 200,000 to 230,000 barrels of crude oil per day.
The East African Community member states have been allocated a combined 40 per cent stake in the refinery with 60 per cent reserved for private investors.
So far only Tanzania and Kenya have taken up eight per cent and 2.5 per cent stake respectively while Rwanda, Burundi and South Sudan are yet to commit to the investment.
According to Dozith Abeinomugisha of the Petroleum Directorate, “a new process of searching for an investor has commenced. Several companies (more than 20) have expressed interest to participate in the refinery development. The government is sieving through these companies to determine those that warrant further engagement and at that time those will be made public.”
The refinery is expected to start operations in 2020. However talks with bidders – a Russian consortium and later a South Korean firm – have failed.
Uganda plans to develop a 60,000 barrels of oil a day (bopd) refinery in Hoima in two phases of 30,000bopd each, with the first expected to complete in 2020.