KAMPALA, Uganda (Dow Jones)—Uganda is in the process of
formulating new legislation which will govern the development and
utilization of oil resources when production starts in the next
couple of years, the Ugandan president said Thursday.
In his state of the nation address, President Yoweri Museveni
said that two separate pieces of legislation are being planned, one
on administration of oil and gas activities, including the
development and production of the oil and gas value chain, while
the second law will focus on regulating payments, use and
management of oil revenue in a manner that creates sustainable
national wealth.
"The key element in these legislations will be to ensure
transparency and accountability in the production and utilization
of oil resources," he said.
Oil discoveries in three blocks on the Ugandan side of the
Albertine rift are estimated at 2 billion barrels, with only around
30% of the blocks explored so far, according to government
officials. Two of the blocks are owned jointly by London-listed
Heritage Oil PLC (HOIL.LN) and UK-based Tullow Oil PLC (TLW.LN).
Tullow oil is the sole owner of one of the blocks.
Museveni further said that in order to attract the huge
investment resources required as well as the expertise in the
sector, government will ensure that the development of oil
resources will be through the private sector, including
international companies. Where necessary, the government will
partner with some of these companies in a Public-Private
Partnership arrangement, he added.
Plans to build a medium size oil refinery aimed at meeting
domestic and regional petroleum demand are also underway. Last
week, government signed a deal with Switzerland-based Foster
Wheeler (FWLT) to conduct a six-month feasibility study on a
150,000 barrels-a-day refinery in the country.
-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256
75-262 4615; bariyonic@yahoo.co.uk