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By Godfrey Olukya 15-4-2013

Uganda’s president, Yoweri Kaguta Museveni has urged oil producing companies and the ministry of energy and mineral resources officials to finalize and agree on the development of the oil refinery and pipeline concurrently and sign a memorandum of Understanding to the start of oil production.

He noted that the negotiations on the memorandum of understanding on building the refinery and pipe line has dragged on for a long time. He said what the government wants is to produce enough oil to meet the demand in the market and to ensure that an oil pipe line operates at the optimal.

The two negotiating parties had disagreed on some of the clauses in the memorandum of understanding of the development of the refinery and pipe line.

President Museveni said oil production in Uganda is overdue and that a lot of time has been wasted in formulating the oil production documents like the Production Sharing Agreement and Memorandum of Understanding among others, between the Government of Uganda and the Oil Companies in the last seven years since oil in Uganda was found.

‘We have wasted too much time. We are now with the issue of oil for seven years. We need to make our final decisions’, he said.

The President was yesterday speaking to a delegation from Total and China’s Cnooc Ltd in a meeting with the officials from the Ministry of Energy and Mineral Resources at State House in Entebbe. The meeting was attended by the Minister for Energy and Mineral Development Engineer Irene Muloni while that of the oil companies was led by Loic Laurandel, general manager Total E&P Uganda.

The Oil Companies pressed on for the contraction of refinery size of 30,000 barrels of oil per day while the Ministry of Energy officials pressed for unconditional expansion of the refinery size of 30,000 to 60,000 barrels of oil per day when the demand increases in future.

The two parties however agreed to start with the refinery size of 30,000 barrels per day.

President Museveni said that the government of Uganda needs the money from the oil to develop infrastructure and provide cheaper energy for the people to use for economic development. He said, ‘Uganda government targets refinery size of 60,000 barrels per day because of the increasing demand in the market which is likely to over grow the present consumption rate of 30,000 barrels per day.’

Loic Laurandel General Manager Total said that the agreement signed should be that which will attract refinery investors and the financiers of the project.



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