Uganda in talks with UAE investment firm over planned $4 billion oil refinery

Uganda is in talks with an investment firm, led by a member of Dubai’s royal family, for the development of a $4 billion refinery for its crude oil.

The negotiations come after the termination of previous talks with a US consortium last year due to financing delays.

Uganda sees the 60,000 barrel-per-day refinery as crucial for the growth of its emerging hydrocarbons industry.

“Expressions of interest were received from several potential investors and they were evaluated … following which a memorandum of understanding was signed on the 22 of December 2023,” Minister of Energy and Mineral Development Ruth Nankabirwa said at a news conference.

Negotiations between the Ugandan government and Alpha MBM Investments from the United Arab Emirates began on January 16 and are anticipated to conclude within three months.

The investment firm, led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of Dubai’s royal family, is engaged in discussions regarding crucial commercial aspects.

Uganda aims to commence commercial crude oil production in 2025 from the Albertine rift basin, situated in the west near the Democratic Republic of Congo border.

The oil fields are operated jointly by the Ugandan government, CNOOC from China, and TotalEnergies from France.

President Yoweri Museveni’s administration seeks to process some of the crude domestically to stimulate employment and capitalize on technology transfer.

Additionally, Uganda has granted a license to CNOOC to produce Liquefied Petroleum Gas at a plant in the Kingfisher development area.

The Kingfisher field is one of Uganda’s two commercial oil development sites, with the second, Tilenga, operated by TotalEnergies.

The annual gas production volume by CNOOC was not disclosed, while Uganda’s gas reserves are estimated at 500 billion cubic feet.