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Uganda Reportedly In Talks Over $4B Refinery With Dubious Firm

Oil refinery

Uganda’s ministry of energy has invited for talks a dubious company registered in a tax haven to discuss the construction of a US$4-billion, 30,000-bpd crude oil refinery in the country, Uganda’s The Independent reports, citing correspondence between the government and the company.

The company mentioned in the correspondence, Burj Petroleum, does not exist as such, but two entities contain ‘Burj Petroleum’ in their names, The Independent’s investigation has revealed. One of the companies, Burj Petroleum International Corporation, is registered on the British Virgin Islands and has offices in Dubai and London. The other, Burj Petroleum Africa Ltd, is said to have its directors based in Dubai, London and Nigeria, according to Ugandan news outlet.

As of September 30, as many as 18 companies had expressed interest in the project, according to a list by the ministry of energy that The Independent claims it has seen.

According to the list and to the email exchange with the government, a company named Burj Petroleum is bidding in a joint venture with China Huarong Asset Management (HK) Co Limited for the construction of the refinery.

Dozith Abeinomugisha, who is in charge of the refinery project, provided comments to The Independent in a phone interview:

“We are still looking at who is interested. The reason you haven’t seen any official list is because it isn’t ready. When it gets ready, we shall communicate.”

Back in early 2014, Uganda signed a deal with London-based Tullow Oil, France’s Total SA (NYSE:TOT) and China’s Cnooc Ltd (NYSE:CEO) for refinery and pipeline plans. Uganda’s oil reserves were discovered in 2006 and are estimated at 3.5 billion barrels of crude. However, the ‘first call’ clause for the refinery on oil produced at licensed areas would actually mean that output cannot begin without the refinery being built first.

In July of this year, Uganda’s central bank warned that oil production delays could spell a “debt distress” for the local economy.

By Tsvetana Paraskova for Oilprice.com

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