KAMPALA, Uganda--The Ugandan government has entered the final
phase of talks with two consortia from Russia and South Korea
expecting to announce the final bidder for its maiden oil refinery
in February next year, the energy and minerals ministry said on
Wednesday.
After weeks of talks, the government asked the consortium led by
Korea's SK Group and another led by RT Global Resources from Russia
to present their final technical and financial offers by January
19, Fred Kabagambe Kaliisa, the ministry's permanent secretary
said.
The bidding process now enters its most decisive phase which
will see the country issue its largest ever contract in the energy
sector allowing the construction of a 60,000 barrels-a-day
refinery. The project is expected to cost up to $4 billion.
"The bidders will prepare and submit their refined technical,
financial and commercial and legal offers," the ministry said.
"They will also detail their financial and long-term business plans
and review the terms of the different project agreements proposed
by government."
But the development also comes as crushing oil prices are
putting global oil companies under pressure to rethink expenditure
on new projects. Analysts have warned that projects in frontier
markets are particularly at a greater risk. Company officials
couldn't be reached for immediate comment.
In June, Uganda selected the two bidders from a group of six
companies and was initially expected to announce the winning bidder
in December. Mr. Kaliisa said that during negotiations, SK Group
and RT Global Resources asked for an incentive package which
required additional time for consultations with other government
agencies, delaying the final selection.
The refinery contract is also viewed as the final development of
the country's oil fields, now estimated to contain some 6.5 billion
barrels of crude oil and 500 billion cubic feet of natural gas. Oil
production is expected to start by 2018, hitting plateau production
of around 220,000 barrels-a-day by around 2022.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
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