Uganda’s UNOC seeks up to $15bln investments in new oil projects

Uganda National Oil Company (UNOC) is seeking investments of up to 20 billion for a slew of new projects across the oil value chain, the state-owned company’s CEO said.

Proscovia Nabbanja told Zawya that the national oil company is pursuing several projects across the upstream, midstream and downstream sectors after successfully achieving Final Investment Decisions (FID) for its Tilenga and Kingfisher upstream developments, and the midstream East African Crude Oil Pipeline (EACOP) in February 2022.

She said the FIDs have unlocked an aggregate investment of about $15 billion for the next five years and allowed UNOC to start conversations on other critical projects including a refinery, an industrial park and the downstream sector.

“With the project profile that we are dealing with, we are looking at $15 to 20 billion and that’s not something that UNOC can manage singlehandedly. We need to spread the financial risk across the different projects and bring in partners whom we can develop the resources with,” she said.

UNOC is planning to a 60,000 barrels of oil per day refinery project, which will supply products to both domestic and regional markets.

“We are currently discussing three critical commercial agreements – implementation agreement, crude supply agreement and shareholders agreement – and our target is to achieve FID by June 2023,” she said.

The company has completed the Front-End Engineering Design (FEED) for the project while the Environmental and Social Impact Assessment is close to conclusion.

“The refinery project is being developed through our subsidiary, Uganda Refinery Holding Company, which will hold a 40 percent stake in the project on behalf of the state while private partners will hold the remaining 60 percent,” she said.

Kabaale Industrial Park

Another midstream project coming off the drawing board is the Kabaale Industrial Park, an oil and gas industrial park spread over an area of 29.57 square kilometres, for which UNOC is seeking a joint venture development partner. 

“We are currently developing the enabling infrastructure such as roads, ICT networks, water and power networks to make it easier for investors to set up their businesses. We expect to open the park for investment next year,” she said.

In the downstream sector, UNOC is planning to set up a new refined products storage terminal, its second after the 30 million litre capacity Jinja Storage Terminal (JST) in Eastern Uganda.

Nabbanja said the Kampala Storage Terminal project will have a total capacity of 320 million litres with Phase 1 having a capacity of 138 million litres.

“It is a strategic project for us because it will not only supply the domestic market but also Southern Sudan, Burundi, Rwanda and other regional markets,” she said.

In the upstream sector, in addition to holding 15 percent stake on the government’s behalf , UNOC is also independently bidding for two blocks.

“We are pursuing independent licenses for two blocks as we have a strategic obligation towards reserves replacement and are also a critical investor within the midstream infrastructure projects like the refinery and the pipeline,” the UNOC chief explained.

“We are hopeful of getting a license before the end of November for the Kasuraban block, and then get the second license together with the CNOOC next year,” she said.

UNOC is also preparing to launch a crude oil trading business in three years.

“Anticipating a portion of the crude going to come out of the production, we are also setting up our crude trading business and we are hopeful that this business line will be ready ahead of the first quarter 2025,” she disclosed.

(Reporting by Anoop Menon; editing by Seban Scaria)

(anoop.menon@lseg.com)

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