The Ugandan president announced Tuesday that the country would use revenue from the recently discovered oil along its western border to develop its infrastructure and other sectors of the economy.

In an address to delegates of the ruling party, Yoweri Museveni said that the country's newly discovered oil would yield ready revenue to tackle the more durable potential of Uganda's industry, agriculture, services and human resource development.

"The oil money will be used to expand infrastructure ... some aspects of higher science education as well as a vast network of vocational training; irrigation and scientific research. ... Oil money should never be used to pay wages--should never be used for recurrent expenditure or to support consumption," he said.

According to Museveni, oil revenue will be used to expand electricity generation, aspects of road infrastructure and the railway. Land-locked Uganda is in dire need of road and railway infrastructure to ease the cost of doing business, according to analysts.

Uganda's oil region is located in a remote Albertine rift which is around 1,300 kilometers from the nearest port of Mombasa and has no railway or road networks.

Uganda is expected to start oil production in the next couple of years with around 50,000 barrels a day, which is expected to rise to around 150,000 barrels a day in the following four to five years, according to government and company officials.

Companies operating in Uganda include U.K.-based Tullow Oil PLC (TLW.LN), Heritage Oil PLC (HOIL.LN) and Tower Resources PLC (TRP.LN).

-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256 75-262 4615; bariyonic@yahoo.co.uk
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