PESTEL Analysis of the Ugandan Refinery Project and Challenges of Crude Oil Refining in Sub-Saharan Africa

The study examines the political, economic, social, technological, environmental and legal (PESTEL) analysis of Uganda refinery project. It does so by defining refinery, classifying refineries into simple or hydro skimming, complex or cat cracking and very complex or coking. The study also discusses refinery conversion processes which include cracking, alkylation & polymerization and reforming & isomerization. While evaluating the Ugandan refinery project, the PESTEL analysis demonstrates the readiness of the project in advancing prosperity to Ugandans. The findings indicate that the Ugandan refinery project is economically viable and safe and thus shall reap great opportunities for Ugandans if its construction is completed by 2026. Great attention should placed to the people who will be displaced at Kabaale so that they are adequately compensated. 2026 is the estimated time Uganda will have its first crude oil from its Kingfisher and Tilenga fields and it is critical that the refinery construction is completed and handover for operation on or before 2026.

Besides, the study investigates the challenges of refining in South Sudan and noted that storage and transportation of the refined product from Unity refinery continues to effect the operation of the refinery. The storage tanks are yet to be installed to store the refined products before transportation. One route of transportation of the refined products is through Lake No via barges and another route is through Mayom, Ajakuac through Wau via road. These routes need to be prepared by the Government of South Sudan through Ministry of Petroleum and Nile Petroleum Corporation (NILEPET).

Moreover, the study evaluates the state of crude oil refining in Sub-Saharan Africa and found out only 43 refineries majorly located in Nigeria, South Africa, Egypt, Algeria, Libya, and Sudan with a total capacity of 3,391,600 barrels per day (bpd). The shortage for domestic fuels in the continental Africa indicates that more refining is required. The study concludes that the future of crude oil in Africa is in refining and petrochemicals and African governments must prioritize refining for purpose of value addition.