Uganda switches bid­der in talks over $2.5b re­fin­ery

Pakistan Observer - - ECONOMY WATCH -

KAMPALA—Uganda has be­gun ne­go­ti­a­tions with a con­sor­tium led by South Korea’s SK Engi­neer­ing for the build­ing of a crude oil re­fin­ery after end­ing talks with a group led by Rus­sia’s Rostec Global Re­sources, the En­ergy Min­istry said. Uganda wants to build the $2.5 bil­lion re­fin­ery to process some of its crude so it can earn more from its oil re­sources, which it dis­cov­ered in 2006. Wran­gling over taxes and the vi­a­bil­ity of the re­fin­ery have de­layed com­mer­cial pro­duc­tion, which is now ex­pected to start be­tween 2019-2020.

The Min­istry of En­ergy and Min­eral De­vel­op­ment said it de­cided to end talks with Rostec Global after the com­pany made ad­di­tional de­mands to a deal reached in May, which it said was due to be signed in June. “Con­se­quently Gov­ern­ment was left with no choice but to halt ne­go­ti­a­tions and draw the bid bond. Gov­ern­ment is now pro­ceed­ing to in­vite the Al­ter­nate Bid­der — SK Engi­neer­ing & Con­struc­tion for ne­go­ti­a­tions,” it said. Ne­go­ti­a­tions be­tween the Ugan­dan gov­ern­ment and the Rostec Global Re­sources-led con­sor­tium have been go­ing on since Fe­bru­ary 2015 when the con­sor­tium was an­nounced as the win­ner of a long-run­ning pro­cure­ment process.

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