Africa Russia defends oil refinery deal with Uganda

Russia defends oil refinery deal with Uganda

President Museveni inspects a guard of honour in Russia, Moscow. With him is the Ambassador of Russsia to Uganda, Mr Sergei Shishkin.
File-President Museveni inspects a guard of honour in Russia, Moscow. With him is the Ambassador of Russsia to Uganda, Mr Sergei Shishkin.

 (AA) – Russia’s ambassador to Uganda has defended a recent deal between the East African country and a Russian state conglomerate to build a $4-billion oil refinery in Uganda.

“Ugandans must cooperate with all partners who are ready to come here and invest,” Ambassador Sergey Shishkin told The Anadolu Agency.

“Ugandans are wise people; if this deal benefits them, all the best,” he asserted.

Uganda recently announced that RT Global Resources, a subsidiary of Rostec, Russia’s largest state-owned corporation, had won a bid to build a $4-billion oil refinery in the country.

Rostec CEO Sergey Chemezov, however, is currently included on U.S. sanctions lists due to Russia’s recent intervention in Ukraine.

Earlier this month, U.S. Ambassador to Uganda Scott DeLisi voiced disapproval over the awarding of the oil refinery project to the Russian state conglomerate.

“This venture is not a done deal,” he told journalists in Kampala.

The American diplomat called on the Ugandan government to look carefully at the sanctions on Russia.

“They have designated a Russian company as the first on the list, absolutely. But they still have to negotiate a variety of issues that will go to financing and the rest,” he said.

“I would suggest that you wait and see how that all plays out,” he added.

Uganda made commercial oil discoveries in 2006 in the Albertine region of the country’s southwest.

Uganda is now expected to start production in 2017 or 2018 once the 60,000-barrel-per-day refinery in the western Hoima district is completed.

According to Ernest Rubondo, commissioner of the Energy Ministry’s petroleum exploration and production department, oil availability in the ground stand at 6.5 billion barrels, of which 1.5 billion barrels is recoverable.

Recoverable amounts refer to oil that Uganda can sell commercially and extract from the ground.

In February of 2014, the Ugandan government signed a memo of understanding with three joint venture companies – China’s National Oil Corporation (CNOOC), Total, and Tullow Uganda Operations Pty Limited – to export crude oil. 

Toyota Tsusho, a Japanese company, is currently conducting a feasibility study to determine the best option for transporting crude oil and the most cost-effective route.
Options available so far include a northern route to Lamu port in Kenya (1,380km), a central route to Mombasa (1,300km) and a southern route to Dar es Salaam (1,950km).

-What sanctions?-

Ambassador Shishkin said Russia would never advise Ugandans as to who they should work with.

“We will never say, ‘Do not cooperate with these people’ – it’s not Russia’s style,” he told AA.

“I wish for Uganda to cooperate with the U.S., if that’s in the interest of Uganda,” added the Russian diplomat.

He insisted, however, that the Ugandan government should not to be concerned by the sanctions.

Rather, he asserted, Uganda should focus on the benefits of its relations with Russia instead of listening to “advisors.”

“People who advise Uganda not to cooperate with Russia because of sanctions – nobody feels these sanctions,” Shishkin told AA. “Our troubles are not because of sanctions, but because of oil production.”

He said that 50 percent of Russia’s export revenue was from oil and gas, adding that all the sanctions had done was improve Russia’s economy.

The sanctions, he said, “forced us to produce agricultural products… instead of importing them.”

The ambassador suggested that the sanctions were meant to pressure Russia to give the Crimea to Ukraine.

“It will never happen; maybe we shall feel these sanctions 50 years from now. These sanctions are not our business; it’s their business – they can do what they want,” Shishkin told AA.

He said Russia’s focus in Africa would remain on infrastructure, including roads, hydropower stations, atomic power stations and railways, among others.

“This refinery is a first step in the right direction,” Shishkin insisted.

He said the next step was building the oil plaster and supporting manufacturers that produce oil and gas products that can be sold not only in Uganda but in the entire region.

As to whether Russia would continue supplying Uganda with arms, the ambassador stressed that Russia and Uganda were sovereign states.

“If Uganda, a sovereign country, is interested in buying modern, sophisticated arms from Russia, as a sovereign country, Russia is ready to do it,” Shishkin told AA.

“If you think it is necessary for your defense, Russia will always support you at all times – no problem at all,” he added.

In 2012, Uganda bought six Sukhoi Su-30MK2 multirole fighter jets from Rosoboronexport, a Rostec affiliate, valued at 654 billion Ugandan shillings (roughly $220 million).

Previous articleJews flock to Jerusalem’s Western Wall for Passover
Next articlePope Francis leads Easter Mass at St. Peter’s Square