Govt Releases List Of Companies Bidding For Oil Refinery Construction

2868 Views Kampala, Uganda

In short
The Uganda government has released the final shortlist of companies and consortia from which one will be picked to build the first phase of the proposed oil refinery.

The Uganda government has released the final shortlist of companies and consortia from which one will be picked to build the first phase of the proposed oil refinery.
In a statement, Fred Kabagambe-Kaliisa, the Permanent Secretary in the Ministry of Energy, said that the process had attracted 75 firms when the government requested for proposals.
Kaliisa says the interest in the Refinery Project demonstrates that the international community sees real economic and energy opportunities within Uganda’s borders and the broader region.
Earlier indications – and speculation – had pointed to Chinese firms dominating the process, however the list released is diverse. From China, there is a consortium led by the Chinese Petroleum Pipeline Bureau (CPP). Founded in 1973, it has history in the construction and management of pipelines. It is also subsidiary of the China National Petroleum Corporation (CNPC), a fast rising player in global oil industry.
Japanese Company, Marubeni, is the only one in the six that submitted a bid as one, instead of being part of a consortium. It is also involved in the export and construction projects in the oil and gas sector. In 2012, it won a refinery modernization project in Kazakhstan worth 1.7 billion US dollars. However, in the same year the company agreed to pay 54.7 million dollars as a fine in what was termed as a “massive, decade-long scheme to bribe Nigerian government officials” in a construction project.
Another consortium is led by Petrofac from the UK, which boasts of a 32-year experience in designing oil and gas infrastructure among others. In Africa, it has operations in Algeria, Nigeria, Mozambique and Tunisia.  
From Russia, is the State owned RT-General Resources Consortium, which includes VTB Capital, a leading infrastructure lender for Russian companies, and Tatneft. Tatneft is yet another Russian oil company, involved in the whole value chain, from exploration to petrochemicals.
SK Energy from South Korea also led a consortium of companies that made it to the final round of the bidding process. SK Energy, the largest oil refiner in South Korea had been reported to be losing business at home, and has been on a drive for investments abroad. Uganda could be one them, if the consortium wins.

The final bid is from a consortium led by the Swiss based firm, Vitoil, which is involved in the refining, marketing and trading of oil. It is also considered to be one of the largest oil trading companies in the world.
The next phase for these firms and the consortia is to provide details on the financing, development and operation of Uganda’s refinery. 
According to Kaliisa, by mid-2014, the winning consortium shall be announced. Government is now in the process of resettling and compensating residents occupying the 29 square kilometers of land in Kabaale, Hoima District. Once the work on the refinery begins, government is projecting in excess of 4,000 temporary jobs and 650 permanent jobs once it is complete. The plan is for the consortia – private companies – to invest 60 percent, with the rest of the shares reserved for government and other players in the region. Construction is expected to be complete by 2017.


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