Companies agree to set up oil refinery in Uganda

Oil exploration companies operating in Uganda have agreed to the decision to set up an oil refinery in the Albertine Rift so that Ugandan crude can be refined when the country finally starts oil production, Uganda's President Yoweri Museveni said.
"All the companies we have talked to are OK with the refinery," Museveni said in a national address to mark the country's 47th anniversary of independence. Uganda will now concentrate on improving infrastructure, such as roads, railways and power supply, to facilitate oil exploitation, he added.

Oil exploration companies have discovered up to 2 bn barrels of oil on the Ugandan side of the Albertine Rift. Efforts to start oil production are under way, but President Museveni has made it clear he doesn't want to export unrefined crude oil.
A feasibility study, funded by the Norwegian government, on the setting up of a $ 2 bn refinery is under way and is expected to be completed in April next year. UK-based Tullow Oil, which has discovered around 800 mm bbl, is looking for partners to help it start oil production in Uganda because it has limited experience in refining and pipeline projects.

The Ugandan oil region is around 1,300 km away from the nearest port, Mombasa in Kenya, so oil production would require a pipeline to reach the Kenyan coast. According to Keith Myres, an analyst with UK-based Richmond Energy Partners, the benefit of refining locally may not outweigh the high capital investment required for the refinery.
"I feel a functioning railway system would be a good long-term infrastructure legacy from oil production," he said.

Other oil exploration companies operating in Uganda include Heritage Oil, Tower Resources, and Dominium Uganda.