Four Groups Bid to Build Uganda's First Refinery

Companies from China, Japan, South Korea and Russia have submitted bids to finance, build and operate Uganda's first oil refinery, the energy ministry said on Wednesday.

Uganda's oil reserves were found in 2006 and the country has estimated them at 3.5 billion barrels. But development has been delayed partly by a debate between the government and oil companies about the size and commercial viability of building a refinery in the land-locked country.

The planned 60,000 bpd refinery is smaller than originally envisaged by the government, which has said it is keen to maximise returns by adding value rather than simply selling crude oil.

But much of Uganda's planned oil output is expected to be exported via a pipeline through Kenya, which has yet to be built. Oil production is now expected to begin in 2017.

The Energy and Mineral Development Ministry said the government and its adviser TaylorDeJongh would begin a month-long evaluation of the bids in June. Contract negotiations were expected to be completed in the fourth quarter of the year, it said.

Six firms had been shortlisted for the work, with only four submitting bids.

One consortium was led by state-owned China Petroleum Pipeline Bureau (CPPB), another bid came from Japan's Marubeni Corporation (MARUF), a third was submitted by a group led by Russia's RT - Global Resources and another group was led by South Korea's SK Energy Co, the ministry said.

Reporting by Elias Biryabarema