Home » Business, Uganda News » Uganda Delays Oil Laws as Production Draws Close

Uganda  estimates  that it is holding 2.5 billion barrels of oil beneath its Albertine region in Western region .Companies Tullow Oil together with its partners French oil major Total and Chinese group CNOOC  plan to  to start production its production in 2016.

Uganda has however got oil working laws to guard the production process,among which is the guarding against environmental degradation and the sharing of revenue. “We want to come out with laws that have as broad goodwill as possible, no one will be left out otherwise we can hurry and then unrest starts as soon as oil begins to flow,” Michael Werikhe, the parliament natural resources committee’s chairman told Reuters.

One of the laws, the 2012 Petroleum (Exploration, Development and Production) Bill, gives the oil minister wide-ranging powers, including to conduct negotiations with oil firms, endorse and administer petroleum agreements and arbitrate on public complaints.

In October Uganda’s parliament passed a resolution imposing a moratorium on all new petroleum deals until new laws regulating the sector are put in place.
In February, the government brought two bills covering both upstream and downstream sectors to parliament, where they have been stuck with a committee supposed to scrutinise and return them to the House for final debate and passage within 45 days.

“When we received these laws for review we were keen on meeting the deadline of 45 days,” said Michael Werikhe, the parliament natural resources committee’s chairman.

“But we soon discovered that there were several contentious issues on which we had to make extensive consultations yet we also needed first to conduct workshops to educate MPs (members of parliament) on the oil industry because it’s a new sector.”

The construction of a refinery that should be in place before production begins could take three years and would coincide with the time oil will start flowing.
Production will start with a small refinery that will be able to produce about 20,000 barrels a day and later ,  a bigger one with the capacity to process 60,000 barrels a day.

According to experts, the oil discovered in Uganda can only last 25 years at a rate of drilling 60,000 barrels a day.