Essar, Kenya Seek Ugandan Oil to Secure Refinery Supplies

(HornTrade) – India’s Essar Group and the Kenyan government offered to build an export pipeline from Uganda to transport oil from the Lake Albert region to Kenya.

Essar Chief Executive Officer Prashant Ruia and Kenya’s Foreign Minister Moses Wetangula proposed building a new refinery in Uganda as well as the pipeline during talks with Ugandan President Yoweri Museveni, the president’s office said today in an e-mailed statement from the capital city of Kampala.

Museveni supports the need to “cooperate in the proposed oil refinery in Uganda,” the statement said. Uganda and Kenya need to “reconfigure the infrastructure from Kampala to Mombasa through Eldoret” for eastbound oil supplies, the president said.

Uganda is set to become an oil exporter this decade following discoveries by Tullow Oil Plc. Kenya wants Uganda to displace the Middle East as the source of its oil imports, Kenyan Energy Minister Kiraitu Murungi said in today’s statement.

Last month, Tullow increased its estimate of discovered resources in Uganda to 1 billion barrels of oil from an earlier forecast of 800 million barrels. The company, which expects to find a further 1.5 billion barrels of resources in Uganda’s Lake Albert basin, plans to bring China National Offshore Oil Corp. and Total SA in as partners.

A unit of Essar last year bought 50 percent of Kenya Petroleum Refineries Ltd. from BP Plc, Royal Dutch Shell Plc and Chevron Corp. The Kenyan government holds the rest of the company.

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