Uganda drafts oil and gas policy to streamline revenue sharing

Apr 04, 2007 02:00 AM

The Ugandan government has started drafting an Oil and Gas Policy in a bid to avoid problems associated with sharing oil revenues, which other countries with oil business are facing, a senior official has said.
Simon D'Ujang, state minister for Energy was quoted as saying that the policy would be ready by the last quarter of this year.
"The Oil and Gas policy is on the way. We are developing the policy and the public will have a chance to look at the draft and discuss it before we make it policy," he said.

Oil reserves estimated to be in the hundreds of thousands of barrels have been located around Lake Albert in western Uganda but the Kingdom of Bunyoro, where the wells are located, has said it wants at least 10 % of the oil revenues.
"The policy will detail the production of oil and how the money from oil will be shared. We do not want to repeat mistakes made by countries that exploited oil before us," D'Ujang said.

Meanwhile, he said though Uganda is to start producing kerosene, diesel and heavy diesel by 2009, but there are no qualified engineers in the country to take charge of the oil production industry.
"We do not have people trained in refining and transporting oil so it would be wise for the universities here to start teaching these disciplines. This will in future help us in job creation and management of the oil business," he said.

Heritage Oil and Gas, a Canadian company exploring oil in western Uganda, recently said Uganda is capable of supplying oil products to the whole of the East African region and still remains self-sufficient.
Meanwhile the minister said a new heavy oil power station will be set up to generate about 110 MW from the oil fields and will be connected to the national grid in order to address the current power crisis in the country.

According to projections by the energy ministry, Uganda will need 25,000 MW by 2025 yet there is a generation capacity of only 2,300 MW.
The oil discoveries in Uganda have been estimated as 260 mm barrels, which brought a great hope to the country to shift from a fuel importer to a producer.

Source: Xinhua News Agency
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