Uganda relocates Hoima residents in plan for oil refinery construction
Drilling for oil in western Uganda. Uganda has begun moving people to make way for the construction of an oil refinery to be commissioned in 2017. File Photo
Uganda has begun moving people to make way for the construction of an oil refinery to be commissioned in 2017.
The refinery will be located in Hoima, Western Uganda near the oil fields.
Speaking in Nairobi Tuesday at the sidelines of the East African Power Industry Convention, Uganda’s State Minister for Energy, Simon D’Ujanga, said that the Ugandan government is currently compensating people living on the 29 square-kilometre piece of land in Hoima where the facility will be located.
“We are paying off the people to make way for the construction,” said Mr D’Ujanga.
The refinery will be 40 per cent owned by the five East African Community member states-Uganda, Rwanda, Kenya, Tanzania and Burundi- with the 60 per cent to be owned by private investors, who according to Mr D’Ujanga will be sourced from countries with experience in handling oil refinery facilities such as India, Korea and Japan.
The combined investment decision comes at a time when the East African region is emerging as an oil and gas producer with commercially viable quantities of oil and natural gas having been found in Uganda and Tanzania respectively.
Though the commerciality of Kenya’s oil resource is yet to be proven, reports from British oil explorer Tullow and its Canadian counterpart Africa Oil Corporation have indicated that the country’s resource exceeds the threshold for production.
The refinery will have an initial capacity to process 60,000 barrels of oil per day which will later be doubled.
Heads of states of the EAC countries are set to meet in Kigali at the end of this month to make the final investment decisions on the refinery project.
“There will be a meeting in Kigali later this month where we will make a final investment decision. There have been other meetings, including recently in Mombasa,” said Mr D’Ujanga.
Having a refinery in Uganda is important for the country which is currently at the verge of producing its oil.
For Kenya, the facility could lead to a cut in the cost of imported refined product which currently caters for 60 per cent of the industry needs while 40 per cent is sourced as crude product for refining at the Kenya Petroleum Refineries Limited facility based in Mombasa.
