Russia’s RT Global Resources Consortium Pulls Out of Uganda Refinery Deal

Months after RT Global resources was selected as the preferred bidder for the Uganda 60000 barrel a day Refinery Project following evaluations by a team from the Government and Taylor Dejongh, Government’s Transaction Advisor word is that the Russian consortium has pulled out of the $4 billion deal.

The RT Global Resources led consortium that included Telconet Capital Ltd Partnership, VTB Capital PLC, Tatneft JSC and GS Engineering & Construction Corporation was to negotiate with the Uganda government on issues including: the Project Framework Agreement, Shareholders Agreement, Implementation Agreement and the Escrow Agreement.

The Government of Uganda had been in negotiations with the RT-GIobal Resources Consortium for the last 44 months.

The ministry adds that the final agreement was reached in principle in May this year but just prior to the expected signature date at the beginning of June 2016, the RT-GIobal Resources Consortium made additional demands from the Government, seeking to reopen and renegotiate issues that had already been agreed between the parties.

“Consequently Government was left with no choice but to halt negotiations and draw the bid bond.”

It is now clear that negotiations have began with the other refinery alternate bidder South Korea ‘s SK Engineering and Construction which included the SK – KDB Global Investment Partnership Private Equity Fund, China State Construction Engineering Corporation Ltd, Haldor Topsoe A/S and Maestro Oil and Gas Solutions (MOGAS) DMCC.

The development comes weeks after South Korea president Park Geun-hye visited Uganda with the aim of increasing business between the two countries.

US sanctions on various Russian officials including Rostec’s CEO Sergei Chemezov 2014 in response to Russia’s annexation and military occupation of eastern Ukraine could also have played a part in the collapse of the deal.State Corporation Rostec holds a 100% stake in RT Global Resources.