Azernews.Az

By Bloomberg

RT Global Resources, a unit of a state-owned Russian company whose head is subject to European Union sanctions, won a contract to build an oil refinery in Uganda.

RT Global beat a group led by South Korea’s SK Engineering and Construction Co. after both made final offers in January, Uganda’s Kampala-based Energy Ministry said on Tuesday in an e- mailed statement. The project could cost $4 billion, the ministry said in November.

The government will start negotiations next month with RT Global on a project that includes a 205-kilometer (127-mile) oil-product pipeline. The winning bidder will hold a 60 percent stake in the 60,000 barrels-a-day refinery, while Uganda has the option of selling part of its 40 percent interest to the neighboring states of Kenya, Tanzania, Rwanda and Burundi.

“The objective of these negotiations is to conclude the project agreements to the satisfaction of government and the lead investor,” Fred Kaliisa-Kabagambe, the energy ministry’s permanent secretary, said in the statement. A joint-venture between the government and the RT Global-led group will organize project finance and engineering, the ministry said.

Other companies in the group include Telconet Capital Ltd., VTB Capital, Tatneft JSC and GS Engineering & Construction Corp., the government said. Sergei Chemezov, chief executive officer of Rostec Corp., which controls RT Global, was added to a list in September of those people affected by EU sanctions against Russia.

Tullow Oil Plc, China’s Cnooc Ltd., and Total SA are jointly developing an estimated 6.5 billion barrels of resources near Uganda’s border with the Democratic Republic of Congo. Output from the fields may start by 2018, according to the government.