Uganda will announce a lead investor for its refinery project this month. The ranking officer in charge of the refinery project Mr. Robert Kasande in a brief email said, “ Yes, we’ll announce this month” in response to our queries seeking a definite confirmation.
Two firms, a Russian and South Korean firm, were issued a Request for Final Offer in December last year. They are South Korea’s SK Energy and Russia’s RT Resources. Both firms have a 50/50 chance in our estimation but details of the actual transaction being assisted by TaylorDeJongh, won’t be readily available.
Concerns over fluid oil price scenario in the “short to medium” term are likely to be balanced out with considerable concessions on the investment considered one of the pillars of Uganda’s approach to the oil sector- focused on domestication at every stage. Planners estimate development of Uganda’s oil fields will cost some US$10 billion spread over two projects – the refinery and an export pipeline; and associated infrastructure. These include 2 Central Processing Facilities, power plants and an upgrade of road and air infrastructure for the oil fields. These investments are likely to take some time and together with sovereign guarantees help re-balance the risk profile attached to heavy investments in oil in Africa in the context of falling oil prices. For the rest of the oil sector timetable and our thinking on the impact of lower prices see the end of year summary we published earlier.