By Nicholas Bariyo
KAMPALA Uganda--Uganda hopes to sign a deal with an investment partner to kick-start the construction of a 60,000 barrels-a-day oil refinery by February 2017, as part of a broader move by the East African nation to develop vast oil reserves discovered a decade ago.
The government has been in talks with several potential partners over the $4 billion refinery, to ensure it is built by 2020, when the country expects to commence crude oil pumping, the energy and minerals minister Irene Muloni said Tuesday.
East Africa has been a focus for oil and gas exploration after a flurry of discoveries in Uganda, Kenya and Tanzania in the past few years. Analysts say the region could rival West Africa as the next energy hub on the continent, given its close proximity to energy-hungry Asian markets. Uganda's oil assets are believed to contain some 6.5 billion barrels of crude along Uganda's western border with Congo.
In July, Uganda suspended talks with Russia's Rostec State Corp. over plans to build the refinery and the government has been courting other investors since.
"We are now in a fast track mode," Ms. Muloni said on the sidelines of an oil and gas conference in Kampala. "There was a setback during (the) previous talks, but we are now back on course."
Sinopec Ltd is among the companies talking to the government, she added, while French oil major Total SA (TOT)--one of the operators of thecountry's three oil blocks--has agreed to take a 10% stake in the plant. Representatives for the companies couldn't be reached immediately for comment.
The energy ministry expects Uganda's oil output to peak at around 230,000 barrels-a-day by 2023, with the bulk of this exported via a pipeline through Tanzania that has yet to be built.
Tullow Oil PLC (TLW.LN), China's Cnooc Ltd. (CEO) and Total are expected to invest $8 billion to develop its oil fields.
Write to Nicholas Bariyo at Nicholas.Bariyo@wsj.com
(END) Dow Jones Newswires
November 22, 2016 09:46 ET (14:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.