Uganda Receives Proposals to Build $2.5 Billion Oil Refinery

KAMPALA, Uganda-Uganda has received detailed proposals from four of the six international companies shortlisted last year to build the country's first oil refinery in the oil-rich Lake Albertine Rift basin, the Energy and Minerals Ministry said Wednesday.

An evaluation team comprising government representatives and experts from the transaction advisor, U.S.-based Taylor-DeJongh will assess the plans in June and announce the successful bidder, the ministry said in a statement.

A lead investor for the 60,000 barrels-a-day refinery is vital for the development of the country's vast oil fields that are believed to contain as much as 3.5 billion barrels of crude.

"One of the government's objectives is to select an investor that will develop a refinery to convert Uganda's waxy crude oil into the desired petroleum products," said Robert Kasande, the Refinery Project Manager.

Among the companies that submitted proposals are a consortium led by Russia's RT Global Resources, Japan's Marubeni Corp. (8002.TO), a Chinese consortium, led by Petroleum Pipeline Bureau and South Korea's SK Energy Co.

Negotiations with the winning bidder are expected to be completed by the end of the fourth quarter to pave the way for the start of construction early next year, Mr. Kasande said.

Uganda issued an international tender for the construction of the refinery in October, weeks after the country issued its first oil production license for Kingfisher oil field to China's Cnooc Ltd.

The refinery and the oil field are both expected to come on stream around 2018.

Uganda also plans to start awarding fresh oil and gas exploration licenses next year after an eight-year freeze, in attempt to speed up the development of its largely unexplored oil industry.

Write to Nicholas Bariyo at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires