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Plans to start refining Uganda's oil may be delayed because of
wrangling over new partners, Heritage Oil
and Tullow Oil.
President Museveni in his New Year address to the nation on December
31, 2009, said plans to build a medium size oil refinery aimed at
meeting domestic and regional petroleum demand are underway.
However a leaked (?) Government report being sourced by news
agencies, says President Yoweri Museveni hosted a November
meeting in the country with Exxon Mobil executives to discuss the
possible acquisition of a stake in Tullow's acreage. It says Tullow
favours selling part of its concession to either US oil company Exxon
Mobil Corporation or France's Total SA because both are experienced in
developing pipelines and refining projects, and both have strong
financial capacity.
ENI, which is Italy's largest industrial company, is 30% owned by the
government. It operates in 70 countries including Libya, Nigeria,
Congo, Mozambique, and Angola in Africa. It is also the third largest
refiner in the world after Royal Dutch Shell and Total S.A.
Eni CEO, Paolo Scaroni was in Uganda in August and met with President
Museveni where he showed off his company's technological and
operational capabilities in the oil and gas sector. At the time, the
Eni boss said it was interested in building a 100,000 barrel-a-day
refinery in Uganda and a 1,300-kilometer pipeline to the Kenyan port of
Mombasa. A railway line and roads are also planned for the oil region.
President Museveni reportedly encouraged Eni to invest in Uganda and
promised to support its interests. Eni is not a total stranger to
Uganda. Its subsidiary, Agip operated several downstream operation
including fueling stations until 2000 when Shell Uganda acquired its
assets in Uganda, Kenya, Ethiopia, and Eritrea.
But then Heritage, run by Tony Buckingham, a former mercenary, in
November 2009 signed a letter of intent to sell its share of the fields
to Eni for US$1.35 billion (Approx. Shs 3 trillion). That money is
equal to about half of the Uganda national budget for FY2009/10 which
is Shs7.3 trillion. Oil companies are competing for new reserves in
Africa to make up for dwindling resources and restricted access in
other parts of the world.
Tullow and the government have said they plan to build a mini-refinery
producing between 5,000 and 10,000 barrels a day in Uganda by 2012.
There are also plans to construct an oil pipeline and improve the rail
system to export crude through Mombasa Kenya in about five years.
PetrolWorld 250110
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