Uganda says oil could start flowing in a year

Uganda's energy minister said late on Sunday that commercial oil production could begin as early as next year after London-listed Tullow Oil signed two production-sharing agreements with the country.

"If I may give a tentative period, then maybe in a year," Ugandan Energy minister Irene Muloni told Reuters on the sidelines of an annual mining conference in Cape Town.

On Friday, Muloni announced details of the deal, which she said include Tullow agreeing to build a refinery.

Tullow must now finalise "farmdown arrangements" with China's CNOOC and France's Total. A farmdown involves a licence holder inviting other operators to help develop a prospect and share the spoils.

"CNOOC and Total are to submit their development plans," Muloni added.

She said the crude would be used for power generation.

Uganda discovered oil in the west of the country, along the border with the Democratic Republic of Congo, in 2006.

Production had been expected to start early this year but wrangling over tax and other issues delayed development.

Tullow has 1.1 billion confirmed barrels of oil in Uganda and believes there are 1.4 billion left to find. (Reuters)