Finance Minister Henry Musasizi challenged the Uganda National Oil Company (UNOC) to develop innovative and sustainable financing options as Uganda’s oil and gas projects advance towards production.

Musasizi, together with Hon. Amos Lugoloobi and Hon. Cissy Mulondo, made the call during an engagement with the UNOC Board and Management, led by Board Chairman Mathias Katamba and Chief Executive Officer Proscovia Nabbanja. The meeting reviewed progress on strategic projects, petroleum supply operations, financing requirements and the company’s future direction as Uganda prepares for first oil.

UNOC is wholly owned by the Government of Uganda and is mandated to manage the State’s commercial interests in the petroleum sector while ensuring the sustainable development of the country’s petroleum resources.

The engagement comes as Uganda’s oil and gas sector enters a critical phase, with upstream developments, the East African Crude Oil Pipeline (EACOP), petroleum storage facilities, the planned refinery and Kabalega Industrial Park advancing towards first oil.

The Ministers commended UNOC for maintaining petroleum supplies despite geopolitical tensions and conflicts affecting major oil-producing regions. He, however, raised concern over variations in pump prices across the country and questioned whether fuel prices could return to previous levels.

Musasizi urged the company to strengthen its commercial operations and develop alternative financing mechanisms capable of supporting its expanding responsibilities while reducing reliance on direct Government funding.

Responding, UNOC Chief Executive Officer Proscovia Nabbanja said fuel prices could eventually decline, although not as quickly as expected. She attributed the continued pressure partly to the conflict in the Middle East and efforts by countries to replenish strategic petroleum reserves depleted during the conflict. According to Nabbanja, the replenishment of these reserves is absorbing part of the available petroleum supplies and delaying the emergence of sufficient surplus on the international market.

UNOC reported a 39% increase in sole importation of petroleum products while continuing to supply Oil Marketing Companies (OMCs) despite challenging sourcing conditions. The company’s gross margin increased from Sh387 billion in FY2024/25 to Sh540 billion in FY2025/26.

Board Chairman Mathias Katamba said UNOC had demonstrated resilience and adaptability amid geopolitical and market challenges, maintaining petroleum availability even when some neighbouring countries experienced supply difficulties.

Major projects advance towards first oil

Uganda’s major petroleum projects continue to make significant progress as the country moves closer to first oil. By the end of June 2026, the East African Crude Oil Pipeline (EACOP) had reached 89.4% completion, while the Kingfisher Development Area stood at 79.36% and Tilenga at 74.2%.

With production approaching, UNOC expects cash-call obligations of approximately US$72 million and is engaging the Ministry of Finance, Planning and Economic Development on the associated financing requirements.

UNOC also provided an update on the US$2 billion financing facility from Vitol Bahrain E.C., signed on December 19, 2025. Of the US$800 million earmarked for other infrastructure projects, US$150 million was disbursed after the required conditions were met. Of this amount, US$144.3 million was converted into Sh536 billion and transferred to the Ministry of Finance on June 17, 2026.

Storage infrastructure expansion

UNOC is advancing the 320-million-litre Kampala Storage Terminal, which will be developed on 300 acres acquired at Namwabula in Mpigi District. The Engineering, Procurement and Construction (EPC) and project management contracts have been signed, with groundbreaking expected later this month.

At Mombasa Port, the company is in the final stages of acquiring a 110-million-litre petroleum storage terminal operated and maintained by VTTI Kenya Limited. The transaction is expected to close by the end of August 2026, subject to clearance from the COMESA Competition and Consumer Commission.

The two investments are expected to strengthen Uganda’s petroleum storage capacity and improve the security and reliability of petroleum supply.

UNOC also highlighted Uganda’s shareholding in the Kenya Pipeline Company (KPC) as an important strategic investment for strengthening petroleum supply security along Kenya’s Northern Corridor. The Board commended the Ministry of Finance for supporting the acquisition and noted that the Permanent Secretary and Secretary to the Treasury and the Permanent Secretary of the Ministry of Energy and Mineral Development serve as non-executive directors representing Uganda’s interests on the KPC Board.

The investment gives Uganda greater strategic participation in critical petroleum transportation infrastructure while creating potential commercial benefits from growing regional demand.

Refinery and industrial park projects progress

Preparations for the planned 60,000-barrel-per-day Greenfield crude oil refinery are progressing, with Front-End Engineering and Design (FEED) studies ongoing. A tentative Final Investment Decision (FID) is expected in February 2027, while negotiations continue on key pre-FID commercial agreements.

At Kabalega Industrial Park (KIP), UNOC has secured Sh37.96 billion in partial funding for Phase One infrastructure and engaged the National Enterprise Corporation (NEC) to commence construction of 86 kilometres of roads.

The developments form part of Uganda’s broader preparations to strengthen petroleum infrastructure and maximise the commercial benefits of the country’s emerging oil and gas industry as major projects move towards production.