Faridah N Kulumba
Africa-Press – Uganda. The Republic of Uganda’s Minister of Energy revealed this week that they started holding negotiations with the United Arab Emirates’s Al Maktoum Company to develop the country’s USD 4 billion Oil refinery. The final negotiations began this month after Alpha MBM Investments led by a member of Dubai’s royal family was picked by the government of Uganda as the preferred bidder for some of its crude oil.
Contemplation
According to Uganda’s Energy Minister Ruth Nankabirwa on 30 June 2023, the President of Uganda Yoweri Kaguta Museveni directed public sector ownership be considered for the refinery after private sector partners had been considered for the refinery. Nankabirwa said that the Ministry of Energy and Mineral Development engaged stakeholders to develop a strategy for the refinery project and received Expressions of Interest (EOIs) from potential investors, including Alpha MBM Investments LLC, Africa Economic Aid Limited, Bakertilly Middle East Limited, and St. Ignatius Energy. “After thorough consultations and evaluations by the government, a Memorandum of Understanding (MoU) was signed on 22nd December 2023 between the Government of Uganda and Alpha MBM Investments LLC from the United Arab Emirates, outlining cooperation and negotiation terms for the Refinery Project,” said Nankabirwa.
Previous contract
In July 2023 the government of Uganda terminated negotiations with a consortium that included a unit of United States firm Baker Hughes over its failure to mobilize financing in time. Expressions of interest were received from several potential investors and they were evaluated… following which a MoU was signed. Uganda is counting on the 60,000 barrel-per-day refinery for its nascent hydrocarbons industry.
Uganda and Alpha MBM discussions
Uganda’s Energy Ministry revealed that on 16th January this year, negotiation of the key commercial agreements between the government of Uganda and Alpha MBM Investments LLC commenced and are expected to be completed within three months. Alpha MBM Investments is led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of Dubai’s royal family. Engineer Irene Bateebe, the Permanent Secretary at the Minister of Energy said the design they are taking with Alpha, they expect that at the time of signing the commercial agreements, a form of Final Investment Decision will be taken. “Because immediately we sign the agreements, we shall see some works commence. So that is an innovative way, the works commence based on the equity of the two partners,” she said. The two partners in the project will be the private investor who will hold 60 percent shareholding and the Uganda National Oil Company with 40 percent shareholding. “And for the National Oil Company, we have already begun programming their equity contribution. They have some portion and for the next financial year 2024/2025, we equally programmed some financial contribution. So, they should be able to put on the table their equity,” Bateebe revealed.
About Alpha MBM Investments
Alpha MBM is a UAE-based investment house led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, the UAE’s Minister of Finance and a senior member of the Dubai Royal Family. Sheikh Mohammed bin Maktoum bin Juma Al Maktoum is the key investor, shareholder, and board member. Alpha MBM is a pioneering investment company and describes Uganda as “an untapped market with the power to create opportunities where none were perceived.
Uganda oil refinery
Uganda’s Oil Refinery is a planned crude oil refinery in the Western Region on the Eastern shore of Lake Albert near the border with the Democratic Republic of the Congo (DRC). It has been planned since 2010. Community opposition was repressed early on. After 5 years of negotiations, the Albertine Graben Refinery Consortium (AGRC) formed in 2018 and agreed to design and build the refinery. The refinery is planned to be fed by the East African Crude Oil Pipeline (EACOP) via a heated northern and a heated southern pipeline, for which the Nzizi Power Station, a 100-megawatt thermal power plant, using natural gas and heavy fuel oil.
Oil sector expectations
Uganda’s government says that the oil sector developments are projected to contribute USD 8.6 billion to the country’s Gross Domestic Product (GDP), and have created over 12,000 jobs. According to Uganda’s Energy Ministry, the country is transitioning from strategic planning to practical implementation. They are now advancing four major oil and gas projects: the Tilenga and Kingfisher projects in the Upstream (USD 6-8 Billion) and the East African Crude Oil Pipeline (EACOP) (USD 5 Billion), and the Uganda Refinery (USD 4 Billion) Projects in the Midstream. Tilenga and Kingfisher are expected to produce respectively 190,000 and 40,000 barrels of crude oil daily at peak production.If all the oil projects are combined with the Government’s investment in supportive infrastructure, signify an investment of approximately USD 20 Billion in Uganda’s economy.The oil refinery is expected to resolve the issue of East Africa’s dependence on refined products imported expensively from overseas.
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