Rédaction Africa Links 24 with The East African
Published on 2024-01-28 15:05:52
Uganda has made the controversial decision to select a United Arab Emirates (UAE) firm, Alpha MBM Investments Llc, as the lead developer and investor for its 60,000-barrels-per-day oil refinery. The firm lacks technical expertise and a footprint in the development of downstream refining facilities for oil and gas, raising concerns about the decision.
Energy Minister Ruth Nankabirwa announced that the government had signed a Memorandum of Understanding with Alpha MBM Investments Llc on December 22, 2023, outlining cooperation and negotiation terms for the refinery. This announcement comes after several setbacks and failed attempts to secure an investor for the project.
The project has experienced delays, with three previous investors, including Russia’s RT Resources, South Korea’s SK Engineering, and the Albertine Graben Energy Consortium (Agec), being invited for the job but failing to move beyond initial talks. Additionally, the US firms led Agec group failed to deliver key project targets and financing, despite holding onto the project framework agreement for six years.
The negotiations between the Ugandan government and Alpha MBM Investments Llc are expected to conclude within three months, aiming for an ambitious April 2024 target to negotiate and conclude key commercial agreements that will allow the investor to make the final investment decision to build the refinery.
It is important to note that Alpha MBM Group, based in Dubai, lacks expertise in the oil and gas sector. This has prompted criticism and questions regarding the selection process and the decision to entrust a company with no experience in developing a complex facility like an oil refinery.
Overall, the decision to bring in Alpha MBM Investments Llc as the lead investor for the oil refinery has raised concerns and skepticism, especially given the firm’s lack of technical expertise in the oil and gas industry. The urgency to move the project forward and the ambitious timelines set for negotiations and agreements highlight the challenges and complexities involved in such a significant infrastructure development.
