Uganda and Tanzania have agreed to start the construction of a $3.55-billion pipeline that will carry crude from Uganda’s Hoima province to the Tanzanian coast and from there to international buyers. The 1,445-km long pipeline will have a capacity of 216,000 bpd of Ugandan crude, starting from 2020.
Uganda is a newcomer on the oil scene in Africa, along with its neighbor Kenya, but the two have decided to develop and export their new wealth independently of each other. Yet the country is ambitious and has just selected a consortium for the construction of its first refinery. The consortium includes GE and Italy’s Saipem. GE recently acquired Baker Hughes, turning into one of the top three oilfield service providers globally.
The consortium will be in charge of a $4-billion project for the construction of a 60,000-bpd processing facility in the oil-rich Hoima region. Initially, the refinery will have a capacity of 30,000 bpd, which is more than Uganda needs to satisfy its local demand, so part of the oil products will be sold abroad. From 2020, the refinery will receive crude from fields operated by French Total, UK-based Tullow Oil, and China’s CNOOC. The reserves of these fields—the country’s total reserves—are estimated at 6.5 billion barrels of crude, of them about 2.2 billion barrels recoverable.
Deals, Mergers & Acquisitions
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