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Uganda, Algeria sign MoU to partner in Oil and Gas projects

The MOU was signed by Dr Michael Mugerwa the GM Uganda Refinery Holding Company on behalf of Uganda and Toufik Hakkar, the Chairman Chairman and CEO Sonatrach for Algeria.

The MOU was signed by Dr Michael Mugerwa the GM Uganda Refinery Holding Company (L) for Uganda and Mr Toufik Hakkar, the Chairman Chairman and CEO Sonatrach (R) for Algeria.

The Uganda National Oil Company (UNOC) has signed a Memorandum of Understanding with Algeria’s Oil Company Sonatrach to partner in the development of oil and gas projects in Uganda.

The MOU was signed by the General Manager of Uganda Refinery Holding Company Dr Michael Mugerwa on behalf of Uganda and Sonatrach Chairman and Chief Executive Officer, Toufik Hakkar signed for Algeria.

The development was confirmed by the state-owned oil company in a Sunday brief statement via Twitter in which it disclosed that the MoU covers establishing oil and gas upstream, midstream and downstream schemes, and capacity building, among others.

“The MOU covers oil and gas cooperation- upstream, midstream (refining and petrochemicals), downstream, capacity building, and oil and gas services,” UNOC tweeted on Sunday night.

The development is part of President Museveni‘s three-day visit to Algeria in which he said Uganda is looking at Algeria investing in Uganda’s refinery.

“We want to build an inland refinery,” said Museveni, adding, “It is absolutely necessary because it will cut transport costs seeing that we are far away from the coast”

Meanwhile, President Museveni expressed the need to Fast Track Economic integration in order to facilitate modern prosperity of the African people.

This according to Museveni was top on the agenda in the talks held between himself and his host Abdelmadjid Tebboune at the Presidential palace in Algiers on Sunday morning.

Museveni noted that modern prosperity is based on the production and sell of goods and services, a reason as to why since 1980 through the Lagos Plan of Action, the African leaders realized the issue of economic integration.

“This has taken a long time but we are moving steadily. We have now agreed on the Continental Free Trade Area-CFTA,” Gen Museveni said, underscoring the need to have continental security.

“But in order for that to happen, you must have peace on the continent and that’s why therefore the discussion between His Excellency and myself focused on the issue of peace in Africa,” Museveni added.

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The President said this should be followed by infrastructural development and commended Algeria for having moved ahead on that front by building communication linkages through the Sahara to West Africa.

“That’s a very positive contribution. I hope a railway system will be built between North Africa (Maghreb) and West Africa because that one will make trade much easier,” Museveni further noted, adding that Uganda and Algeria have got the same ideas on economic integration.

He however underscored the need to boost Africa’s purchasing power with an expected population of 25 billion people by 2050, up from the current 1.5 billion people. President Museveni was happy to learn, that like Uganda, Algeria’s imports have drastically reduced from 62 million dollars to 32 million dollars.

“The problem of Africa is ideological and strategic and I’m glad Algeria is in the way Uganda also thinks. Therefore, in Algeria, we have got reliable partners,” he said.

The Government of Uganda plans to develop 60,000 barrels of oil per day refinery at Kabaale, Buseruka Sub-County in Hoima District.

The Uganda Refinery Project also includes a 211 km long multi-products pipeline that will evacuate refined products from the refinery to a storage terminal at Namwabula, Mpigi District; the Mbegu Water Intake and its corresponding water pipeline and, the storage terminal itself, for the refinery products located at Namwabula in Mpigi District.

 The Uganda Refinery Holding Company Limited (URHC), a subsidiary of Uganda National Oil Company Limited (UNOC), will hold Uganda’s commercial interests on behalf of the Government of Uganda (GoU), participating with up to 40% shares in the refinery Project.

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In April 2018, GoU selected Albertine Graben Refinery Consortium (AGRC) as the Private Sector Investors to finance, develop, construct, and operate the Greenfield Oil Refinery estimated to cost US$ 4 billion.

Sonatrach is the 12th largest oil consortium in the world, with 154 subsidiaries operating over the entire oil value-chain from upstream, to midstream, and downstream activities.

In 2021, the company’s export revenues had increased by 75%, placing turnovers at US$35bn for the year compared to the US$20bn from the previous year.

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