Oil & gas

Oil Refinery: Government Asks Two Firms For Final Offer

Government has issued a Request for Final Offer (RFFO) to the two preferred bidders for the lead investor for the 60, 000 barrels per day (BPD) oil refinery and related downstream infrastructure.

The RFFO was issued to SK Group led Consortium (South Korea) and the RT Global Resources (Russia) led consortium on 27th October 2014, according to information from Ministry of Energy.

The Ministry’s Permanent Secretary Mr. Kabagambe-Kaliisa said, “We held preliminary negotiations with SK Group led consortium and RT Global Resources led consortium between August and September 2014. The bidders were then issued with the Request for Final Offer (RFFO) with a submission deadline of 19th January, 2015.”

The preliminary negotiations were necessary to give the bidders clarity on Government’s expectations and also understand their position as investors before they submit their final offers.

Following the negotiations and issuance of the RFFO, the bidders are expected to prepare and submit their refined technical, financial and commercial and legal offers.

Once completed, Uganda's Refinery will be producing 60,000 barrels a day
Once completed, Uganda’s Refinery will be producing 60,000 barrels a day

“They are also expected to document their technical concept design for the refinery, project implementation and operating plans, National content policy and project management teams, among others. They will also detail their financial and long-term business plans and review the terms of the different Project Agreements proposed by Government,” revealed the PS in a document seen by Chimpreports.

He added that the final offers would be evaluated by a team from Government supported by the Government’s Transaction Advisor, Taylor –Dejongh. The winning bidder is expected to be a brief issued Wednesday afternoon

“During the negotiations, the bidders requested for an incentive package and this required additional time for consultations with other line Ministries and Government Agencies,” Mr. Kabagambe-Kaliisa added, explaining the extension in timeline for announcement of the winning bid.

Upon execution of the different project contracts, the lead investor and Government will constitute a Refinery Company that will take forward the engineering and financing aspects for the development of the refinery.

Uganda’s refinery project is to be developed under a public private partnership (PPP) arrangement with the Government holding 40% equity. It involves development of a refinery in Buseruka Subcounty, Hoima District with a capacity of 60,000 BPD, development of crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near Uganda’s capital city of Kampala.  The first phase of the refinery is expected to be in place by 2018.

Over 70% of the Project affected persons in the 29 Square kilometres of that is being acquired for Uganda’s Refinery Project and the rest will be paid by the end of 2014.  In addition, 533 acres of land have been acquired within Buseruka Subcounty for those who opted for resettlement.

Uganda’s Petroleum resources are now estimated at 6.5 billion barrels of oil initially in place from the 21 oil and gas discoveries.   Exploration work has only been undertaken in less than 40% of the Albertine Graben which is the most prospective sedimentary basin in the country.


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