Uganda picks Russia’s RT Global Resources to build $4bn oil refinery

A consortium led by RT Global Resources, a subsidiary of the Russian state-owned defence conglomerate Rostec, is to build Uganda’s first ever crude oil refinery. 

The plant will process Uganda’s oil resources, which were discovered in 2008 and which are expected to enter production in 2018. It will be located in western Uganda by Lake Albert and will have a capacity of 60,000 barrels each day, rather than the 120,000 originally planned by the government.  

As well as RT, the consortium comprises Russian oil and gas company Tatneft, South Korean conglomerate GS and investment bankers VTB Capital and Telconet Capital. The total investment in the project is uncertain, but was put at about $4bn by the Ugandan energy ministry in November. 

Rostec said in a press release: "Implementation of the project will benefit in strengthening Russia and Uganda relations, and it will be a sound basis for advancing Russia’s interests in whole of Eastern Africa." 

There were initially 75 companies and consortiums participating in the tendering of the project, six of which presented bids in May last year. RT Global beat a rival consortium led by South Korea’s SK Engineering and Construction after both made final offers in January.

The success of the Russian bid was helped by the slide in the value of the rouble, which has made Russian goods and services more competitive. 

There have been concerns over the selection of Rostec for the contract as the company have been linked to Russian arms exports. 

Photograph: A Rostec oil refinery (Rostec)