Kenya has agreed to acquire 2.5 per cent of the upcoming Uganda oil refinery, in a deal estimated to cost the exchequer US$ 61m. Uganda, which has 6.5 billion barrels in reserves, hopes to complete the first phase of construction in 2018.
Energy and Petroleum PS Joseph Njoroge confirmed the news on Monday last week, pointing out that they had decided to consider the offer to enhance and support the growth and relationship of East Africa as a bloc.
“In line with the spirit of regional incorporation we committed to support each other in key infrastructure projects and we will support the Ugandan one. We shall take up a minimal 2.5 per cent stake in the refinery project,” Mr Njoroge explained.
The production of Uganda oil refinery is anticipated to reach 60,000 barrels of oil per day and much of the projected crude output is expected to be exported via a pipeline through Kenya, which is yet to be built.
The oil refinery will be located in Kabaale Township, near Uganda’s largest oil fields in the Kaiso-Tonya. The lead investor for the project will be selected by next month as two consortia – one led by South Korea’s SK Energy Co and another led by Russia’s RT-Global Resources and which are participating in the bid for construction – were to submit final bids last week.