Government to float oil refinery shares in regional states

The construction of the refinery designed to produce 60,000 barrels per day, is estimated to cost $2 billion.

Kampala

The government is floating shares amongst the East African Community states to generate funds for the construction of the proposed oil refinery.

Ms Irene Batebe, a petroleum officer at the Ministry of Energy’s Petroleum Exploration and Production Department, says government has already written to the East African Community inviting the member states to buy the shares in the refinery.

She says the government proposes to build the oil refinery through a Public-Private Partnership where private investors would own 60 per cent and the rest of the shares would be shared between the government and the public.

Ms Batebe explained that East African Community states could buy part of the 40 per cent shares. She, however, added that the government would own the entire 40 per cent should the invitation to buy the shares yield no response. The construction of the oil refinery designed to produce 60,000 barrels of oil each day, is estimated to cost $2 billion.

It is, however, not yet clear what response the members of East African Community would give towards the idea to buy shares in Uganda’s oil refinery considering that some of them such as Kenya have had similar discoveries.
In 2008, the East African Community Summit of the Heads of State directed its secretariat to develop a strategy for the development of regional refineries following discoveries of oil in Uganda and gas in Tanzania at the time.

In its report, the East African Community said while Africa had 50 of the world’s 689 refineries, only one existed in the East African region at Mombasa. The study recommended the establishment of a refinery in Uganda as well as the upgrading of the Mombasa refinery. Other recommendations were that additional storage facilities be installed in Uganda, pipeline between Eldoret, Kenya to Kampala, Uganda.

Also recommended were the establishment of port facilities, roads and railway lines within the Community. Bateba also said on Tuesday that the refinery could be in place by 2016.

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