Uganda Signs Waste Oil Contract

A South African consortium, EnviroServ International, has opened a waste treatment and disposal facility in Nyamasoga Western Uganda in what officials say the plant will largely cater for oil waste

Uganda is expected to become an oil producing and exporting country in the coming years following the discovery of over 4.5 billion barrels of commercially viable oil in the Albertine Rift.

According to Kieron Geoghegan the Executive Director EnviroServ International it’s the first facility of such a large magnitude in the East African region.

“Investment to date is approximately $20 million. We commenced constructions in April 2014 and our operations commenced in October 2014. The Certificate of approval of Environment Impact Assessment was secured in August 2013 and we’re first licensed to own this facility by the National Environment Management Authority in October 2013,” Geoghegan said.

Geoghegan said in January 2015, the National Environment Management Authority (NEMA) gave them a waste water discharge permit after receiving an operating license in December 2015.

They have a fully equipped laboratory able to handle a wide range of analysis for both liquids and solids. The laboratory can also be accessed by third parties who require specialists’ analysis.

“This facility is available to service wider industry in Uganda and the East African region and we’re developing capacity of Ugandans in the new field of hazardous waste management,” Geohegan said.

EnviroServ, which has a 35 years’ experience in liquid and solid waste management will mainly cater for oil waste produced by French firm Total E and P, one of the companies carrying out oil exploration in Uganda.

Chinese oil firm China National Oil Off-Shore Corporation (CNOOC) is the only oil exploration firm that has received a production license for Kingfisher Development Area signaling that the country will likely start oil production in 2018.

Uganda’s State Minister for Mineral Development Peter Lokeris in 2014 signed the final papers and hence handed over the production rights to CNOOC.

“Following the lifting of the conditions on the production license for the Kingfisher Discovery Area on 16th September 2013, it marks an important milestone in the progress of Uganda’s Oil and Gas Sector,” Lokeris said at the time.

The Kingfisher Production License is the only oil and gas production license that Uganda has issued to any of the three oil exploration firms.

China National Offshore Oil Corporation won a $2 billion production license and was the first to be approved. The firm was tasked to develop the Kingfisher area in the Albertine region over four years, which is expected to be holding 635 million oil barrels, of which 196 million are recoverable.

The Albertine Graben, which is the most prospective area for petroleum production, is currently subdivided into seventeen Exploration Areas (EAs).

Four of these (EAs 1, 1A, 2 and Kingfisher Development Area) are licensed to four oil companies namely Tullow Uganda Operations Pty Limited, Tullow Uganda Limited, Total EampP Uganda B.V. and CNOOC Uganda Limited.

These companies hold the four licenses in joint partnership and have rights to undertake petroleum exploration, development and production in these areas.

The Kingfisher Development Area is jointly licensed to Tullow Uganda Limited, Total EampP Uganda B.V. and CNOOC Uganda Limited with each having equal shareholding.

Uganda awarded the construction of the oil refinery project to a consortium led by RT Global resources, a subsidiary of Russian state corporation- Rostec.

The decision followed a submission of final offers from two final bidders which were evaluated by a team from Uganda government and Taylor DeJongh, government’s transaction aisor.

Initial estimates show that the cost Uganda’s first oil refinery to be built at Kabaale Village in Hoima (Western Uganda) will be around $3 billion.

The other bidder, named the Alternate Preferred Bidder, SK Engineering and construction led consortium from South Korea was the other contender.

40% of the oil refinery financing will be provided by Uganda, while the winning bidder, RT Global Resources, is responsible for the remaining 60 percent.

The project involves development of a refinery with a capacity of 60,000 barrels per day, development of crude oil and product storage facilities on site, as well as a 250-kilometer product pipeline to a terminal in Buloba, about 15kilometers West of Kampala.

The First phase of the refinery is expected to be in place in 2018.

Source : East African Business Week

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