The Government of Uganda has completed negotiations on the principal agreements in its Refinery Project with the RT Global Resources – led consortium, according to a highly placed Ministry of Energy and Mineral Development official.
“It’s true, the negotiations have been completed and once a few minor details are ironed out, the Ministry will release an official public statement on the same,” our source who preferred anonymity, because he isn’t the authorized to speak on behalf of the Ministry, said.
Despite the announcement of the RT as the Selected Preferred Bidder for the project in February 2015, further negotiations had to be held to conclude the Project Agreements to the satisfaction of Uganda and the lead investor. Originally scheduled to have been completed within 60 days, the discussions that started in March 2015, have dragged on for a further 5 months.
Speaking in February, Fred Kabagambe-Kaliisa, the Permanent Secretary in the Ministry had identified the Project Framework Agreement, Shareholders’ Agreement, Implementation Agreement and the Escrow Agreement as the key subjects of the negotiations with the Russian consortium.
Upon execution of the different project contracts, RT and Uganda will constitute a Refinery Company that will take forward the engineering and finalise the financing aspects for the development of the refinery.
This development should set off major commercial activity in an oil and gas industry that has been dormant for over two years.
Valued at $4bn, Uganda’s refinery project is to be developed under a public private partnership (PPP) arrangement with the Government holding 40% equity. The Project involves development of a refinery with a capacity of 60,000 BPD, development of crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near the capital city, Kampala. The first phase of the refinery is expected to be in place by 2018.