President Museveni has been in Chad picking some lessons on oil refinery even as the country works towards the achievement of a similar goal. Chad is Africa’s seventh largest oil producer at 180,000 barrels per day. The refinery capacity is 20,000 barrels per day, enough to meet the country’s domestic consumption.
In 2011, Chad started refining oil at the Djarmaya Oil Refinery after several countries had refused to finance the project, arguing that it was unprofitable. It was not until a Chinese company, Chinese National Petroleum Company Incorporation (CNPCI), brought in 60 per cent investment that construction for the refinery went ahead. The Chadian government contributed 40 per cent of the investment.
When President Museveni suggested Uganda would construct an oil refinery for Uganda’s oil, there was a concern it would be an unprofitable venture. But the President argued that there was no need to export crude oil yet the domestic market has the capacity to consume refined products.
“I congratulate President Idriss Deby for his foresight of building this refinery. Some countries produce petroleum but don’t refine it. Now Chad produces oil and consumes it. In Uganda, we have some oil wells and that is the route we are taking,” said President Museveni during his two day visit to Chas as he toured Djarmaya Oil Refinery.
The President said Uganda hopes to start with a refinery producing 30,000 barrels per day and later increase the capacity to 60,000 barrels per day. Government is currently negotiating with a conglomerate led by a South Korean Firm, SK Energy, with the expectation the latter would bring in at least 60 per cent of the funding.
The Uganda government is planning for both with the oil companies financing the crude oil pipeline.