In line with this, the country’s energy and minerals minister has presented to the Parliament a long-awaited oil bill expected also to pave way for the development of the industry.
Acting junior energy minister, Kamanda Bataringaya, disclosed this, Thursday, to Dow Jones news wire.
According to him, the bill, known as the Petroleum Exploration, Development and Production Bill 2012, will, when passed into law, regulate and “watch over” oil exploration, development and production in Uganda.
The country now boasts a reserves of at least 2.5 billion barrels of oil, discovered along its western border with mineral-rich Eastern Congo.
Bataringaya said: “The law will establish the Petroleum Authority of Uganda and the National Oil Company to represent the government’s commercial interests in the sector,” adding that the legislation also spells out the sharing of oil royalties between the central government and local authorities, licensing procedures as well as environmental restoration in oil drilling areas.
Following the presentation of the bill, speaker of the parliament referred it to the Committee on Natural Resources for consideration.
Bataringaya expects that the bill would be enacted into law in about a month’s time, after it must have gone through discussions at committee level and in the plenary.
The absence of the legislation has been partly blamed for holding up the development of the country’s oil fields.
The Ugandan parliament, in October last year, came up with a resolution barring government from signing any new oil deals until the legislation is enacted.
The government was also forced to halt the approval of the planned farmout of part of UK-based Tullow Oil’s interests in the country.
But, the government, last week, initiated a process for the formal approval of the $2.9 billion deal, which will see Tullow sell two thirds of its stakes in three oil blocks to France’s Total and China’s Cnooc.
The proposed law will repeal the existing 1985 Oil Act, which was enacted at the time the country was yet to discover commercial oil reserves.