Bunyoro demands 10 percent of oil revenues

Bunyoro Kingdom wants the central government to pay it 10 percent of revenues from the crude reserves once commercial production starts, its spokesman said on Monday. 

 

London-listed Tullow Oil is the leading explorer in Uganda. 

 

Ford Mirima said Bunyoro kingdom, which has had long-standing grievances against the central government, arrived at the final figure they are demanding after "intense discussions" by its cabinet. 

 

"The Omukama (King)'s cabinet has been deliberating over this for a long time and they have now agreed on a figure. We considered similar industry practices in other countries and we think 10 percent is a reasonable figure" he said. 

 

Bunyoro kingdom, which is Uganda's second biggest, has also demanded a publicly-funded university to be located in its area and a financial allocation to cover any environmental damage from petroleum production. 

 

Political analysts say a central government failure to meet the kingdom's demand could produce hostility against oil companies and possible sabotage of oil installations especially by the region's swelling ranks of unemployed youth. 

 

Uganda, which is east Africa's third largest economy discovered commercial deposits of hydrocarbons in its west along the border with the Democratic Republic of Congo (DRC) in 2006. Production is expected to start early next year. 

 

Bunyoro hosts block 2 where much of Uganda's confirmed 2.5 billion barrels worth of crude reserves are located. 

 

Efforts to obtain a government response to the Kingdom's demand were fruitless as Energy Minister Irene Muloni was in a meeting. 

 

Mirima said they would now proceed to formally ask the government to incorporate their demands in draft oil laws expected to be brought to parliament soon. 

 

Muloni said on Oct. 15 she hopes to bring three petroleum bills -- Resource Management Bill, Revenue Management Bill and Value Addition Management Bill -- to parliament by the end of this year. 

 

Only 40 percent of Uganda's Albertine rift basin has been explored and the energy ministry estimates the country's crude reserves could be as high as 6 billion barrels if the entire basin was explored.