Alpha MBM to Develop $4 Billion Oil refinery Project in Uganda

The Ugandan government and its joint venture partner, Dubai-based Alpha MBM Investments LLC, have signed a $4 billion agreement to develop the 60,000 barrels per day (BPD) oil refinery project in Kikuube District in Midwestern Uganda (Lake Albert Basin).

The Uganda Investment Authority (UIA) facilitated the oil refinery project from inception up to the signing of the agreement, and will continue throughout the implementation stage. Uganda’s First Oil is expected by the end of 2026. The project is estimated to create 32,000 direct and indirect jobs.

Uganda’s Minister of Energy and Mineral Development Ruth Nankabirwa and H H Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of the Dubai Royal Family, signed the agreement in the presence of Ugandan President Yoweri Musaveni.

The agreement also sets a framework for the oil refinery investment, provides timelines for the work, which is expected to be completed within three years, and outlines the obligations of the partners.

The refinery also includes construction of the 320-million-litre Kampala Oil Storage Terminal in Mpigi District in central Uganda, and a 212 km finished product pipeline linking the refinery to the storage terminal, as well as construction of a water abstraction facility in Mbegu.

Under the agreement, Alpha MBM Investments will be the lead developer with a 60%, while the Uganda National Oil Company (UNOC), through its subsidiary Uganda Refinery Holding Company, will hold the remaining 40% stake.

Game-Changer

In his remarks, Museveni called the signing of the agreement a game-changer for Uganda’s economy, adding that the government will foster investment and ensure the country benefits from its natural resources.

The President said that Uganda, with its vast mineral wealth, must move from being a consumer economy to a producer economy by adding value to its natural resources, adding that this will enable the country to maximize economic benefits from its natural resources.

“This oil refinery is not just about fuel; it is about Uganda producing and exporting refined products instead of importing. We must stop exporting raw materials and instead add value to everything we produce,” he added.

In his comments, H H Sheikh Mohammed bin Maktoum said that he and his team were in Uganda to support the country and its people to grow and develop.

Ruth Nankabirwa said that the development of the oil refinery aligned with the 2008 National Oil and Gas Policy as well as the East African Refineries Development Strategy.

He also said that the oil refinery will help develop local expertise, and serve as a springboard for industries such as petrochemicals and fertilisers, as well as attract Ugandan businesses to participate in the supply of goods and services, hence boosting local enterprise development.

The oil refinery is expected to contribute up to $3.3 billion to Uganda’s Gross Domestic Product (GDP) annually, and up to $8.2 billion in capital formation.

According to projections, the oil refinery is expected to improve Uganda’s balance of payments by $591 million annually, with the adjacent Kabaale Petrochemicals Industrial Park contributing $849 million annually.

Uganda’s in-place oil resources (Stock Tank Oil Initially in Place (STOIIP)) in the Albertine Graben are currently estimated at 6.5 billion barrels, of which 1.4 billion barrels are technically recoverable.

Of the technically recoverable resources, 1 billion barrels are reserves (Recoverable at current conditions) and 0.4 billion barrels are Contingent resources.

The planned lifecycle for production of the estimated reserves from the Kingfisher and Tilenga projects is 25 years. This is expected to be prolonged when some of the current Contingent resources become reserves.