Page 7 - AfrOil Week 04 2020

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Uganda refining project nears FID
UGANDA
A consortium led by General Electric (GE) is near to taking a final investment decision (FID) on a $3.5bn refining project in Uganda, the East African country’s energy ministry has claimed.
The decision is due to be taken once work on an oil products pipeline and other infrastructure that connect to the facility has commenced, the ministry said in a budget policy document pub- lished this week.
The ministry is looking to secure UGX100bn ($27mn) in government funding for this infrastructure.
The Albertine Graben Refining Consortium (AGRC), comprising GE, Baker Hughes, Italy’s Saipem and Africa-focused investment funds YAATRA Africa and Lionworks Group, won a contract to build a 60,000 barrel per day (bpd) oil refinery in Uganda’s Hoima district in April 2018. The plant will initially operate at only half that capacity.
The group began front-end engineering design (FEED) work last March – expected to take 15 months to complete, according to the
budget document.
AGRC will operate the plant with a 60%
stake, while the government will hold the remaining 40% interest, with an option to sell shares to other East African Community states and institutional investors.
Uganda, East Africa’s third-largest economy, found commercially viable crude reserves more than a decade ago, but production has been repeatedly delayed by disagreements with field operators over taxes and development strategy. A lack of infrastructure and domestic refining capability has also held up development.
First oil is now anticipated in 2022-2023, from fields jointly operated by France’s Total, China’s CNOOC and London-based Tullow Oil. The refinery’s launch will be timed to coincide with this milestone.
The refining project will allow Uganda to forgo fuels imports, and even position itself as a regional supplier. Earlier the energy ministry said it expected an FID to be taken in September 2020. ™
Tullow, Total reportedly appoint agent for sale of Kenyan stakes
KENYA
THE UK-Irish independent Tullow Oil is reportedly taking concrete steps to reduce its holdings in Kenya. Tullow has a 50% stake in three licence areas in the East African country and is also serving as operator of the upstream project.
Sources familiar with the matter told Bloomberg and Reuters last week that the com- pany had decided to work with an agent to han- dle the joint sale. Tullow has already arranged for Natixis, a French investment bank, to assist with the transaction, they said.
According to the sources, Natixis will per- form the same service for France’s Total, which has arranged to join Tullow in reducing its stake in the project. Total has indicated that it wants to unload up to half of its 25% stake in the three Kenyan blocks, they reported.
Tullow and Total have been working together at Blocks 10 BA, 10BB and 13T in the South Lokichar Basin. They discovered oil there in 2012 and have said that the licence areas may hold as much as 560mn barrels of crude in proven and probable reserves.
Despite substantial discoveries, the partners
have struggled to push the project forward. Last
year, though, Tullow revealed that it intended to reduce its stake from 50% to 30%. 
Lokichar basin oil could be exported via pipeline (Image: Tullow Oil)
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