Government is back to the drawing board to look for new investors for Uganda's $4.5 billion oil refinery after an agreement with American and Italian firms consortium expired last month.

In a statement released on Monday evening, the Ministry of Energy said whereas they have made great strides in the development of the 60,000 barrels per day refinery , they have failed to get funding after the Project Framework Agreement (PFA) expired.

"Government of Uganda is now open to receiving offers from public sector capital providers to participate in this nationally and regionally strategic project," the ministry said.

Progress

According to the Energy Ministry, so far, the Refinery Configuration or Front-End Loading 2 (FEL-2), and the Front-End Engineering Design (FEED), which define the technical design of the oil refinery, have been completed whereas the project Environmental and Social Impact Assessment (ESIA) and commercial and marketing studies have also been carried out.

Uganda in 2018 signed an agreement with American companies Yaatra Africa, Baker Hughes (and Italian firm Saipem SPA for the construction of the $4.5 billion oil refinery.

The deal was to ensure the development, design, financing, construction, operation and maintenance of the oil refinery in Hoima District with an eventual capacity of 60,000 barrels per day.

According to the agreement, the refinery was to be developed as a commercially viable venture with a regional market focus to supply products to the Ugandan and regional markets.

However, with the latest developments, it remains to be seen whether Uganda will be able to beat the deadline of drilling its first oil by 2025.

Geologists estimate that Uganda's crude oil reserves are at 6.5 billion barrels located in the Albertine rift Graben.