April 10, 2018 / 3:01 PM / 4 months ago

UPDATE 1-Uganda signs agreement with investors to build oil refinery

(Adds details, quotes)

By Elias Biryabarema

KAMPALA, April 10 (Reuters) - Uganda signed an agreement on Tuesday with a consortium, including a subsidiary of America's General Electric, to build and operate an oil refinery in western Uganda that will cost $3 billion-$4 billion, the president's office said.

According to a statement, the project framework agreement that was signed will "ensure development, design, financing, construction, operation and maintenance" of the planned 60,000-barrel-a-day refinery.

Uganda discovered crude reserves estimated by government geologists at 6.5 billion barrels in the Albertine rift basin along its border with the Democratic Republic of Congo more than 10 years ago.

But the start of production has been repeatedly delayed by disagreements with field operators UK's Tullow Oil, China's CNOOC and France's Total over taxes and development strategy.

A lack of associated infrastructure such as a crude transportation pipeline and a refining facility have also hampered the start of production.

The east African country is aiming to both refine domestically and also export some of the crude via a pipeline through neighbouring Tanzania currently under development.

Uganda has said it is eyeing the start of commercial production in 2020.

According to the statement, members of the consortium are Albertine Graben Refinery Consortium (AGRC) include Nuovo Pignone International SRL, a General Electric subsidiary in Italy.

Others include YAATRA Africa and Lionworks Group Ltd both from Mauritius and Saipem Spa also from Italy.

"There has been sleeping in the West, they don't care about what potential is in Africa," the statement quoted Ugandan president Yoweri Museveni as saying at the signing ceremony at Entebbe, a lakeside town where his office is located.

"Africa is going to be a huge powerhouse in terms of business."

Initial efforts to secure an investor for the refinery collapsed after talks with Russia's RT Global Resources broke down. (Reporting by Elias Biryabarema; Editing by Susan Fenton and David Evans)

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