UPDATE:Uganda Kingdom Wants Oil Law To Define Revenue Sharing

8th Jun 2010 12:47

(Adds quotes from government minister.) By Nicholas Bariyo Special to DOW JONES NEWSWIRES KAMPALA, Uganda (Dow Jones)--Uganda's Bunyoro kingdom wants the government to revise the proposed oil bill, slated to be tabled in parliament this month, to ensure that it defines clearly the terms of oil revenue-sharing, a kingdom spokesman said Tuesday. Ford Mirima told Dow Jones Newswires that the kingdom wrote to the government last week reminding it of its commitment to sharing oil revenue with the kingdom, which is home to the country's oil region along Uganda's western border, in the Lake Albert basin. "The draft bill is silent on revenue sharing, we have asked the government to include revenue-sharing provisions before the bill is tabled in parliament," he said. Bunyoro wants internationally recognized revenue-sharing agreements with the central government a head of oil production, Mirima said. The kingdom wants between 5% and 10% of the oil revenue when production starts. The oil bill is expected to sail through the ruling party-dominated parliament in the next couple of months. However, the allocation of oil revenue could arouse strong opposition in Bunyoro as the country prepares for parliamentary and presidential polls in 2011, analysts say. Government officials say consultations are underway to hear the views of the kingdom as well as those of the general public before the bill is tabled. Peter Lokeris, Uganda's junior minister in charge of energy and minerals, said the Bunyoro kingdom will be entitled to royalties once production starts. "[The] government has already taken the kingdom into consideration and they will receive royalties," he said. However, since oil is a national resource, any agreement regarding the sharing of revenues would have to be approved by parliament, he added. The proposed law doesn't specify how much royalties the local authorities are entitled to. The bill entitles the minister to determine the amount of royalties to be paid, which will then be included in the production-sharing agreement. The new law is expected to guide the country as it seeks to develop oil fields in the Lake Albert basin, where at least 2 billion barrels of oil have been discovered. Bunyoro is the second-largest kingdom in Uganda. The monarch, who is prohibited from participating in partisan politics, has a large following in the oil-rich region. Last month, the kingdom said it wouldn't allow the development of the Waraga oil well because it is on a cultural site. The well is located in block 2 and is licensed to U.K.-based Tullow Oil PLC (TLW.LN). The company says kingdom officials are being consulted to resolve the issue. -By Nicholas Bariyo, contributing to Dow Jones Newswires; 256-75-2624615 [email protected] (END) Dow Jones Newswires June 08, 2010 07:47 ET (11:47 GMT)