Buyers Shun Uganda’s Crude Oil

The government of Uganda has failed for find buyers for the over 40,000 barrels of test-crude oil extracted during well testing in its oil-rich Albertine Graben.

While some Ugandans have alleged that the government has airlifted some of the crude oil and sold it already, it is emerging that all the test crude remains confined in containers because there are no buyers.

Authorities in the East African country have since 2015 been trying to get buyers for the crude oil used for industrial processes in vain.

The directorate of petroleum director at the Energy ministry, Homey Malinga says no buyers have expressed interest in Uganda’s black gold. At today’s price of $82p/b that is the equivalent of Shs 11bn worth of waste.

“That test crude has been there. But the amount of that crude can’t enable somebody or a company to establish a system that will take it. We tried to sell it to Hima (Cement maker), they said they will need to configure their system for cement production,” said Malinga

Hima has recently been emphasizing the need to use renewable energy sources like biomass to power its cement production. Malinga reveals that the attempt to sell the crude to companies that generate power has also not been successful.

“So our hope is that if we don’t sell it now, maybe in future when the refinery is there, it will be used for blending. We blend it with fresh crude,” said Malinga

Crude oil is also used in tarmacking roads. With a number of roads being constructed in the Albertine region and generally in the country, it was hoped that the crude would be used for infrastructure development. But Malinga says the stored quantity may not be enough even for one road.

“Because if you are to supply 40,000 barrels it is not too much. But we tried many options including disposing it off. And even disposing it off you have to go through a tedious process,” he said.

The crude is now stored in specialized containers called butitainers at four locations in the Albertine Graben; Kasamene-1, Ngara-1 and Ngiri-2 well sites in Buliisa district, and Tangi Camp in Nwoya district.

The oil in question was extracted by companies like Tullow to appraise the discovery to determine the extent of the discovery and the characteristics of the crude oil.