Oil & Gas

Uganda’s oil sector is moving steadily toward its first oil in 2026, with major progress at the Tilenga, Kingfisher, and East African Crude Oil Pipeline (EACOP) projects. However, the Uganda Oil Refinery — once envisioned as the centerpiece of the country’s energy independence — remains behind schedule. Despite assurances that construction will begin in 2025 and operations will start by 2029 or early 2030, significant preparatory work is still pending before any oil can be refined domestically.

The $4 billion refinery, located in Kabaale, Hoima District, is a joint venture between the Uganda National Oil Company (UNOC) and UAE-based Alpha MBM Investments, holding 40% and 60% shares respectively. It is designed to process 60,000 barrels of crude oil per day and produce not just fuel, but petrochemicals, fertilizers, and gas. The surrounding industrial park is expected to attract billions in investment, creating thousands of jobs and enhancing Uganda’s energy self-sufficiency once operational.

Progress, however, remains slow. The Front-End Engineering Design (FEED) is only 50% complete, and major construction may not begin until 2026. Financing complexities, the refinery’s technical design, and shifting global energy priorities toward renewables have delayed timelines. Unlike the upstream projects led by experienced international operators, the refinery’s newer partnership with Alpha MBM still requires thorough due diligence and financing arrangements before heavy construction begins.

Even so, officials maintain that the refinery is essential to Uganda’s long-term energy security. Without it, the country will continue exporting crude oil while importing refined fuel — a costly paradox. Once completed, the refinery could position Uganda as a regional supplier of petroleum products to neighbors like Tanzania, Kenya, South Sudan, and the DR Congo, strengthening both economic and geopolitical influence in East Africa.