Uganda, UAE hold talks over US $4bn oil refinery project

Uganda and the UAE have engaged in talks over investment in developing a US $4bn refinery for its crude oil reserves. This move comes after the termination of negotiations with a consortium, including a unit of US firm Baker Hughes, due to financing issues.

The meeting which was led by a member of Dubai’s royal family was for a proposed 60,000 barrel-per-day refinery. The pipeline project, a collaboration with TotalEnergies EP Uganda, the China National Offshore Oil Corporation Uganda Limited and the Uganda National Oil Company, will cut reliance on neighbouring countries for the shipping of fuel supplies, transforming the landlocked country’s energy security profile by reducing the need for imports. Additionally, Uganda granted a license to CNOOC to produce Liquefied Petroleum Gas (LPG) at a plant in the Kingfisher development area.

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Commercial oil production

Minister of Energy and Mineral Development Ruth Nankabirwa announced that a memorandum of understanding was signed with United Arab Emirates-based Alpha MBM Investments in December 2023. Negotiations regarding commercial details began on this month, with an expected completion within three months. Alpha MBM Investments is led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of Dubai’s royal family.

Uganda aims to commence commercial crude oil production in 2025. President Yoweri Museveni’s government intends to refine some of the crude domestically to stimulate employment and capitalize on technology transfer opportunities.