The Ugandan president said Tuesday that Bunyoro Kingdom would get a fair share of oil revenues once production starts on the Ugandan side of the Albertine rift.

In a national address Yoweri Museveni said the government would ensure the kingdom, which hosts the oil-rich districts of western Uganda, gets a substantial share of the revenues to aid its development.

Early this year, the Kingdom asked central government to implement a 1955 colonial agreement which gives it rights over mineral resources on its territory. The agreement was signed between the U.K. protectorate government and Kingdom of Bunyoro Kitara, and the Kingdom insists it remains binding since it has never been amended.

Without specifying the percentages of oil revenues that would go to the Kingdom, Museveni said oil revenues would be used to finance development projects in the country.

Dickens Kamugisha, chief executive of the Uganda-based Africa Institute for Energy Governance, warned keeping locals from oil exploration and production could turn Bunyoro into another Niger Delta.

"Locals have not participated fully in the ongoing exploration activities and this poses a potential danger to future oil production," he told Dow Jones Newswires Tuesday.

Uganda is carrying out a feasibility study to build a large refinery after dropping plans to build a mini refinery following discoveries of more oil fields in the past 12 months.

Companies operating in Uganda include Jersey-based Heritage Oil Ltd. (HOIL.LN), U.K.-based Tullow Oil (TLW.LN) and London-listed Tower Resources PLC (TRP.LN).

-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256 75 262 4615; bariyonic@yahoo.co.uk
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