Uganda to offer equity stake in Hoima project to SK Energy – sources

29 Jul 16 – The Government of Uganda is planning to offer SK Energy [KRX:03600] a majority equity stake in its Hoima oil refinery project, two sources have said.

A government source told Mergermarket that the Russian consortium comprising Rostec Telconet Capital Partnership, VTB Capital, Tatneft JSC, and GS Engineering & Construction Corporation, has recently indicated to the government that it will no longer participate in the Hoima project. This consortium was awarded the contract to develop the USD 4bn refinery in February 2015.

At the time, a consortium led by South Korea’s SK Energy was the second preferred bidder. The Ugandan government has not yet reached out to SK Energy, but is planning to offer the company the 60% equity stake previously awarded to the Rostec consortium, the government source continued.

The government is also considering raising the capital to build the refinery by itself, and then contract out its construction and operatorship, the government source said.

The project was originally to be developed under a public private partnership (PPP) agreement, with the Ugandan government holding a 40% equity stake.

“The government is planning to hold a press conference to give an update on the refinery project in the next few weeks,” the government source said. “The project will be back on track by the end of October.”

The Hoima refinery will have a capacity of 60,000bbl/day. It will be situated near the Lake Albert Basin, which is an USD 1bn oil exploration project under development by Total [NYSE:TOT], Tullow Oil [LNO:TLW] and China National Offshore Oil Corp (CNOOC).

A spokesperson for the Rostec-led consortium declined to comment.

By Katie McQue

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