Assessing the Feasibility of UNOC’s Work Plan
- UNOC’s Work Plan is going through a actuality examine because the establishment seeks to safe venture financing for its key ventures within the midstream and downstream sectors
- UNOC ventured into oil exploration within the Kasuruban block, working with a three way partnership accomplice that brings technical know-how and monetary muscle to the venture
- Ministry of Finance introduced UNOC used EACOP holding funds to purchase 8M litres of gas for Jinja Storage Terminal resulting from money crunch
Uganda Nationwide Oil Firm (UNOC) is going through a actuality examine because it seeks to safe venture financing for its key ventures within the midstream and downstream sectors. Regardless of going through some obstacles, UNOC stays dedicated to its formidable work plan and is continuous to pursue new alternatives.
UNOC is wholly owned by the ministries of Vitality and Finance, with a 51 per cent and 49 per cent stake, respectively. The corporate’s mandate is to handle Uganda’s industrial pursuits within the oil and gasoline sector, together with the advertising of the nation’s share of petroleum and growing experience within the oil and gasoline business.
Earlier this yr, UNOC ventured into oil exploration within the Kasuruban block, working with a three way partnership accomplice that brings technical know-how and monetary muscle to the venture.
Nonetheless, for its ongoing ventures within the midstream and downstream, UNOC requires a minimal of US$200 million over the following two monetary years main as much as the graduation of economic oil manufacturing.
The corporate holds a 15 per cent stake in upstream manufacturing in every of the 9 licenses for the oil fields operated by China’s CNOOC and French TotalEnergies EP in Nwoya, Buliisa, Hoima, and Kikuube districts. At present, the 2 oil firms bear UNOC’s 15 per cent funding.
Within the midstream sector, UNOC holds Uganda’s 15 per cent stake within the East African Crude Oil Pipeline (EACOP), which can transport Uganda’s waxy crude oil from Hoima to Tanzania’s Indian Ocean Port en path to the worldwide market.
Moreover, the corporate, via its subsidiary Uganda Refinery Holding Firm Restricted (URHC), holds Uganda’s 40 per cent stake within the long-shot 60,000 barrels per day refinery.
This US$4.5 billion greenfield refinery is one in every of President Museveni’s pet tasks, and UNOC officers have described its inside price of return as “extraordinarily engaging,” given the US$1.7 billion Uganda spends yearly on petroleum imports and the potential regional market.
UNOC’s Work Plan Challenges
Whereas showing earlier than the Parliamentary Finance Committee final week to defend UNOC’s finances, Ministry of Finance officers revealed that US$52.6 million has been provisioned as UNOC’s first fairness within the venture through the 2023/24 monetary yr.
The refinery’s design, finance, and assemble tender was awarded to the Albertine Graben Vitality Consortium, a particular function automobile of American and Italian companies. The venture is anticipated to be financed in a public-private partnership association of a 60:40 ratio.
Vitality Minister Ruth Nankabirwa and UNOC executives have beforehand claimed that the Closing Funding Determination (FID) for the venture might be closed in June 2023.
Nonetheless, the Ministry of Finance informed the committee that negotiations on debt financing haven’t began but. In consequence, the refinery FID can not occur in June 2023 as a result of a number of key venture agreements have but to be negotiated and closed.
The Ministry of Finance officers revealed that the negotiation of the Crude Provide Settlement is anticipated to be accomplished within the final quarter of this yr, whereas the negotiation of the Implementation Settlement and Shareholders Settlement, respectively, is anticipated to be accomplished by June 2023.
The incorporation of the Refinery Firm Schedule is due for completion later this yr, whereas the Environmental Social and Influence Evaluation research is claimed to be at 97 per cent.
Trade sources have informed the Day by day Monitor lately that the Albertine Graben Vitality Consortium had failed to boost US$8 million demanded by the Nationwide Environmental Administration Authority for the attendant Environmental Social and Influence Evaluation evaluate processes.
Individually, UNOC manages the Kabaale Industrial Park, which is contiguous of the 29 sq. kilometres of land acquired in 2013 to accommodate, amongst others, the pumping terminal for EACOP.
Resulting from a money crunch, the Ministry of Finance has introduced that UNOC lately utilized funds from its holding account for EACOP to buy eight million litres of gas to replenish the Jinja Storage Terminal.
This was accomplished to arrange for the potential impression on Uganda’s gas provide through the interval when Kenya was conducting its nationwide elections. The supply of the funds was reimbursement prices incurred by UNOC for EACOP promotional actions, in addition to overseas change positive factors generated from the corporate’s fairness disbursements from the Ministry of Finance.
Learn: UNOC to invest $840m in oil and gas sector