Ugandans will have to wait much longer before they see the country’s refined petroleum products, as the Uganda National Oil Company confirms that the planned refinery in the Albertine region will be completed between late 2029 and 2030.
However, this wait is anticipated to bring considerable benefits to the nation. The completion of the refinery promises energy independence, as Uganda will be able to produce its own refined products rather than relying heavily on imports. It will also stimulate economic growth, generate thousands of jobs, and foster the development of a petrochemical industry.
Tony Otoa, the Chief Corporate Affairs Officer at Uganda National Oil Company (UNOC), in an interview, confirmed the refinery will come much later after the crude oil has begun to flow.
“It definitely has to happen in 2030. Because it takes about three to four years to come together. According to all the planning we have this year. And according to all the preparations that are in place right now,” he said.
Commercial crude oil pumping, or what many have referred to as first oil, is expected to begin during the second or third quarter of 2026. In the absence of a refinery, all the crude oil from the Tilenga and the Kingfisher projects will be pumped through the East African Crude Oil Pipeline for export through Tanzania’s Port of Tanga.
While this arrangement provides immediate revenue from exports, it means Uganda will initially miss out on added value from refining and selling finished petroleum products domestically.
Exporting crude oil helps to improve foreign exchange earnings in the short term, but local benefits like job creation, skills development, and energy security that the refinery would provide will be delayed until the facility is operational.
Ultimately, the refinery is expected to foster self-sufficiency and reduce reliance on refined imports by allowing Uganda to process its own crude oil. It had initially been planned that part of the crude would be retained in the country as feedstock to the planned greenfield refinery, whose construction has been delayed by a lack of financing after the American-led consortium failed to fund it.
Plans to construct a 4-billion-dollar crude oil refinery hit yet another snag in June 2023, with the expiry of the Project Framework Agreement between the government and the Albertine Graben Energy Consortium (AGEC).
The negotiations had been on since April 2018, when the Project Framework Agreement PFA was signed between the government and the Albertine Graben Refinery Consortium (AGRC).
AGRC later rebranded as Albertine Graben Energy Consortium (AGEC). Though late, the project returned on course following the signing of a memorandum of understanding between the government and Alpha MBM Investments LLC from the United Arab Emirates. Negotiations on key commercial agreements with Alpha MBM Investments commenced on January 16, 2024.
Alpha MBM Investments, led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, is expected to be the lead investor holding a 60% stake, while Uganda, through the Uganda National Oil Company, will hold a 40% stake in the project.
Earnest T. Rubondo, the Executive Director of the Petroleum Authority of Uganda, two weeks ago told journalists at his office that negotiations on pending agreements with the investor were ongoing.
Rubondo was hesitant to reveal further details about the negotiations and when the investor is expected to announce a final investment Decision for the project.
He admitted that it was unlikely that the refinery would be in place at the time when taps for the flow of crude from Kingfisher and the Tilenga projects open.
An investment of at least US$4 billion is earmarked for the project, one of three crucial oil and gas projects alongside the East African Crude Oil Pipeline (EACOP) and the Upstream projects, namely Tilenga in Nwoya and Buliisa, and Kingfisher in Kikuube. The Government has mobilized resources for UNOC’s stake in the project.
Otoa, on the other hand, said it is expected that the Alpha MBM Investments will make a final investment decision before the end of 2025, which is just a few weeks away.
Pressed further about the possibility that an FID will be taken soon or whether the negotiations were done, Ota stated that” I haven’t said that all the negotiations are done. And like another project, you have constant conversations. So for this one, I just want to assure you that it is in shape. The early works are a manifestation.
The refinery project In Hoima
It has been noted that President Museveni insisted that Uganda must have a refinery as part of the ongoing developments in the oil and gas sector.
Uganda is positioning itself as one of the bigger players in Africa’s energy industry by accelerating plans to see a mega $4 billion oil refinery roar to life by as early as 2030.
In a continent often criticized for exporting its raw materials and importing finished products, Uganda’s vision stands as a powerful declaration.
By pushing for the refinery, some industry players say Uganda seeks to rewrite its own economic story, but also help reshape the energy future of an entire continent.
The vision behind Uganda’s oil refinery project has always been larger than oil. It is about self-sufficiency, sovereignty, and industrial transformation.
For decades, Uganda, like most African countries, has relied heavily on imported refined fuels, draining billions in foreign exchange.
According to the Uganda National Oil Company, the refinery project aims to anchor the nation’s transition from a resource-rich economy to a refined product powerhouse, driving a new era of value addition, energy independence, and cross-border trade.
The refinery will form the beating heart of the vast Kabalega Industrial Park, an enormous 29-square-kilometer complex dedicated to petrochemical industries, logistics, warehousing, energy infrastructure, and even an international airport. It will process 60,000 barrels of crude oil per day, but it won’t just produce fuel. It will also generate petrochemicals, kerosene, fertilizers, and even processed natural gas, turning what would be waste into new streams of value.
In January 2024, the Natural Resources Governance Institute’s Paul Bago and Tom Scufield published a study, “Uganda’s Oil Refinery: Gauging the Government’s Stake?
They noted Uganda’s planned oil refinery will have several benefits for the country, including for its security of fuel supply and balance of payments.
The study based on economic modeling noted that the refinery could be reasonably profitable, generating an internal rate of return of 13 percent in a baseline scenario.
“The government is planning to take a 40 percent stake but may ultimately pay a higher price for this equity than it expects. Even if it borrows to cover its upfront contribution to costs, it will need to divert around $330 million in present value terms from the national budget for loan repayments in the 2030s,” they said. “This price will increase if downside risks, such as cost overruns or lower global oil prices, materialize.”
The authors’ modeling suggests that the refinery could be reasonably profitable. With their baseline assumptions, it generates an internal rate of return (IRR) of 13 percent.
“It should address Uganda’s problem with fuel supply, with current import routes from Kenyan and Tanzanian ports having suffered several disruptions. Fewer petroleum product imports will reduce the country’s foreign exchange needs.”
The government hopes that the refinery will also stimulate the birth of a petrochemical industry and generate thousands of jobs.
***URN***