By NICHOLAS BARIYO
KAMPALA -- The Ugandan government has started resettling
thousands of residents from a 30 km stretch of land in
preparation for an oil refinery project, as the country advances
plans to start developing its oil fields, the energy and
minerals ministry said.
A total of 7,118 residents from 13 villages will be
displaced from the Lake Albertine rift basin to enable the construction of a 30,000 bpd oil
refinery, to supply refined fuel products on the local market,
the ministry said.
The refinery project is one of the most
contentious elements of a prolonged debate over how Uganda
should develop its newfound oil reserves. The government is
expected to spend up to $27.4 million to compensate the
affected residents. "Educating the project affected persons in
financial management and livelihood restoration is key to the
success of the project." said Robert Kasande, the refinery project manager.
In April Uganda and three oil companies - Tullow Oil , Total
and Cnooc agreed to building a refinery with a capacity of 30,000
bpd, much less than what the government had initially
The preliminary deal ended a two year deadlock, which is
largely blamed for delaying the development of the country's
oil fields. Construction of the refinery is
expected to start early next year and its capacity will be
upgraded to 60,000 bpd after a three year period.
Negotiations over the country's final oil development plans
are continuing. Jimmy Mugerwa, Tullow's general manager on
urged the government to "fast track the development" of its
petroleum industry if Uganda is to stay ahead of the likes of
Kenya that have also discovered commercial quantities of
According to Mr. Mugerwa, Uganda's oil sector has witnessed
minimal activity in the past two years, which is of concern to
investors. The government is preparing to issue a tender for
the construction of the refinery in the next few weeks, Mr.
The government has already hired Taylor-DeJongh to advise on
the construction of the refinery. The
firm will advise on the selection of a lead investor for the refinery, the sourcing of financing
as well as the formation of a refining company. Ugandan oil fields
are estimated to contain some 3.5 Bbbl of crude reserves.
Dow Jones Newswires