Uganda confirms new oil deposits

Man with bowser in Uganda
Image caption Many Ugandans wonder whether they will prosper from the wealth that oil will bring to the country

Uganda has confirmed the discovery of an additional one billion barrels of oil in the country.

In 2010, it had announced it had discovered commercially viable deposits of 2.5 billion barrels.

However, the commissioner for petroleum exploration told the BBC that deposits were now at least 3.5 billion barrels.

"This is because of new discoveries, and also the ability to extract more oil from existing wells," Ernest Rubondo told World Business Report.

Investors sought

Mr Rubondo said that out of 77 wells drilled so far, 70 contain oil and gas.

Companies such Tullow Oil, Total and CNOOC already operate in Uganda, but Mr Rubondo said he was looking for other investors to join them.

Before that happens, changes to the previous licensing bills have to be made in parliament,

"Bills were passed before the presence of oil was confirmed and now the risk for commercial companies has reduced," he said.

Critics say that production in existing fields has been delayed by contractual disagreements, tax disputes and infrastructure setbacks.

"When oil is discovered in the middle of the country there are logistical problems which have to be overcome before it can be shipped," Mr Rubondo said.

"You cannot compare it to oil and gas discovered in the middle of the ocean," he said, "where you just have to load it onto a tanker."

He pointed out that anywhere in the world, it can take between eight and 10 years from the discovery of oil on land, to actually extracting it.

Rather than exporting the oil, he said that it was government policy to refine the oil in Uganda to provide petrol, diesel and jet fuel.

"A nation's security of supply for petroleum products enhances its competitiveness," he said.

When commenting on whether ordinary citizens would share in the wealth generated by oil, he said: "There is a communication strategy on our website so stakeholders can see exactly what is happening.

"The constitution provides laws on how local and central governments share the royalties," he added.

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