Uganda: Refinery Will Open Up More Oil Ventures, Says Expert

Tullow Oil workers at a rig in Buliisa in Uganda
3 December 2018

Kampala — The construction of an oil pipeline and the refinery will open up the East African region to more oil exploration ventures, according to the East Africa Crude Oil Pipeline (EACOP) project director.

Mr Maxim Marchenko, the EACOP director, said the two projects expected to start soon will act as a catalyst for oil companies to seek more exploration opportunities in the region and eventually monetise the resource.

"Once we construct this pipeline, it will naturally increase oil exploration activities in the region. Today, before thinking about investment in oil, any oil company has to see how it will sell its oil. So if there is no pipeline, no refinery, then it jeopardises efforts of people to go and do investment," Mr Marchenko said during a symposium organised by Advocates Coalition for Development and Environment, a policy think tank, and Parliament in Kampala on Friday to discuss developments in the oil sector.

The 1,445km pipeline is planned to run from Hoima District in mid-western to southern Tanga Port in Tanzania on the Indian Ocean coast. The project has been projected to cost at least $3.55b (about Shs12.8 trillion).

Uganda discovered oil in the environmentally sensitive Albertine Graben in 2006 and has since raised hopes of an economic boost. Getting oil out of the ground has, however ,seen many delays. It is now expected that oil will start flowing by 2022.

Of the 6.5 billion barrels of oil discovered below and around Lake Albert, about 1.5 billion are easily recoverable.

Mr Marchenko responded to a long question raised by many speakers who were given a chance to speak at the symposium--- who will take up the lucrative jobs?

He said the company is looking at recruiting 75 per cent of staff locally and some engineers have already been taken on.

"I am convinced that the best people to build things in Uganda are Ugandans, so if we do not use Ugandans, then our project will not be efficient," said Mr Marchenko.

Mr Isaac Musumba, the State minister for Lands, said the government is grappling with compensation issues in the oil region because the "office of the chief valuer is weak and needs to be strengthened."

"We will be coming to Parliament to strengthen this office. The chief valuer is for the first time facing pressure to deliver," said Mr Musumba.

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