February 9, 2012 / 4:40 PM / in 6 years

Uganda tables long-awaited oil law-minister

* Law to create national oil company, regulator

* Uganda hopes to start oil production next year

* Govt says more oil laws coming

By Elias Biryabarema

KAMPALA, Feb 9 (Reuters) - Uganda has tabled a long-awaited bill to regulate the east African country’s nascent oil sector as it gears up for commercial production, the energy minister said on Thursday.

Energy Minister Irene Muloni told Reuters the Petroleum Exploration, Development and Production Bill proposing a national oil company and an authority to oversee the sector was sent to parliament on Wednesday.

She said the national oil company would spearhead the state’s participation in the industry, which could start commercial production as early as next year.

“The law will help establish robust institutions like a national oil authority and a national oil company and put in place mechanisms to protect the environment around the oil fields,” she said.

Commercial hydrocarbon deposits were discovered in the east of Uganda in 2006.

Explorer Tullow Oil says it has found 1.1 billion confirmed barrels of oil and believes there are 1.4 billion left to find.

Tullow and Uganda signed production-sharing agreements and a memorandum of understanding on Friday, which will allow the London-listed firm to complete a “farmdown” deal with China’s CNOOC and France’s Total.

Under the deal, Tullow will invite the two oil majors to help develop its oil prospects and share the returns.

Muloni said on Oct. 15 she was aiming to send three petroleum bills to parliament by the end of last year.

“We’ve begun with legislation handling exploration, development and production but other laws to handle other aspects of the sector are coming,” she said.

The new law would replace an oil act that dates back to 1985, long before hydrocarbon deposits were discovered in the east African country.

The new bill now goes to a parliamentary committee.

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