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Uganda Cabinet Endorses U.S. Company, General Electric to Construct Oil Refinery

The Uganda Cabinet has given backing to General Electric Co. to build and operate a 60,000-barrel-a-day refinery that will process crude oil from fields in the western part of the country.

An American multinational conglomerate corporation headquartered in Boston, General Electric was among four companies shortlisted in 2017 for the development of the $4.27 oil refinery after negotiations with the selected Refinery Development Lead Investor, price RT Global Resources, a unit of Rostec State Corp. of Russia, collapsed in 2016.

Some of the competitors for the project were Chinese firm Guangzhou Dongsong Energy Group, Spain’s Profundo, Bantu Energy, a Canadian and Ugandan consortium as well as Italy’s Maire Tecnimot.

The Minister of Energy and Mineral Development, Irene Muloni last year said RT Global had set “new impossible conditions which were unfavorable to our government” hence the termination of the talks.

ChimpReports has learnt the Cabinet sitting of Wednesday supported GE, which is ranked among the Fortune 500 as the thirteenth-largest firm in the U.S. by gross revenue, to construct the much-anticipated facility.

The company operates through several segments including Aviation, Current, Digital, Energy Connections, Global Research, Healthcare, Lighting, Oil and Gas, Power, Renewable Energy, Transportation, and Capital which cater to the needs of Financial services, Medical devices, Life Sciences, Pharmaceutical, Automotive, Software Development and Engineering industries.

Information and National Guidance Minister Hon Frank Tumwebaze was not readily available for comment.

The Energy Ministry Permanent Secretary Robert Kasande government was yet to sign any agreement with any firm to construct the oil refinery.

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“Negotiations are still continuing,” said Kasande, adding, “We expect to close soon.”

Officials who talked to this website on condition of anonymity say GE was favoured by Cabinet due to its strong financial muscle, rich experience in oil and gas and geo-political considerations.

The Energy Ministry is expected to receive instructions to process paper work for the agreement with GE.

State House Meeting    

President Museveni on October 23, 2017 held a meeting at State House Entebbe with the leadership of General Electric (GE) consortium, which confirmed commitment to long-term cooperation with Uganda to construct an oil refinery in the country.

The consortium comprises General Electric (GE), YAATRA Ventures LLC, Intra-Continent Asset Holdings Ltd (IA) and Saipem SpA. Their major roles as partners involve Engineering, Procurement and Construction.

President Museveni told the meeting that Uganda is committed to the establishment of an oil refinery project that is “cost effective, technologically sound and profitable to both the Government of Uganda and capital market investors; leading to the creation of jobs for the people of Uganda.”

Mr. Ado Oseragbaje, on his part, said that the Consortium is committed to investing in Uganda. He noted that when the refinery project is completed, it will not only be an asset to Uganda but also to Africa.

The planned 60,000-barrel-a-day refinery will receive supplies from oil fields in the Albertine region.

Government expects to begin exploitation of the entire 6.5 billion barrels of crude resources by 2020.

Government will participate in the refinery project through the Uganda Refinery Holding Company (URHC), a subsidiary of the Uganda National Oil Company (UNOC).

It is through the URHC that the confirmed interests of the East African Partner States will be held.

The 13th Northern Corridor Integration Project (NCIP) Summit held in 2016 in Kampala resolved to develop a crude oil export pipeline from Kabaale, in Hoima District to Tanga Port in Tanzania.

The 1,445km long, 24-inch diameter, heated pipeline is being developed to provide access for Uganda’s crude oil to the international market.

The Front-End Engineering Design (FEED) study for the development of the Hoima – Tanga East Africa Crude Oil Pipeline (EACOP) was launched in January 2017.

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