Uganda Bunyoro Kingdom Threatens Lawsuit over Oil Exploration

UGANDA (Dow Jones Newswires), Apr. 20, 2009

Cultural leaders of Uganda's Bunyoro kingdom, located on the Ugandan side of the oil-rich Albertine rift, have threatened legal action against the central government over oil exploration and production activities there, a kingdom official said Monday, but the government has promised talks to resolve the issue.

Yolamu Nsamba, the principal private secretary of the king of Bunyoro, said the government has breached the pre-independence agreement of 1955, which provides that Bunyoro is entitled to substantial amounts of revenue from mineral exploration in its kingdom.

"For years now, the central government has been dealing with oil exploration companies secretly yet the law has never been changed," he said, adding that kingdom officials have already informed the central government of its intentions.

A government official told Dow Jones Newswires separately Monday that the central government would soon start talks with kingdom officials to resolve the issue. Uganda is expected to embark on an early oil production scheme in the first quarter of 2010.

The 1955 agreement was signed between the Bunyoro Kitara Kingdom and the U.K. protectorate government and stipulates that in the event of mineral development taking place in Bunyoro, a substantial part of the mineral royalties and revenue from mining leases would be paid to the native government of Bunyoro Kitara.

Bunyoro remains influential in Uganda although its cultural leaders are prohibited from engaging in national politics.

Oil exploration companies operating in Uganda include Jersey-based Heritage Oil Ltd. (HOIL.LN), U.K.-based Tullow Oil (TUW.LN) and London-listed Tower Resources Ltd.(TRP.LN). Company officials estimate that the Albertine rift holds over 2 billion barrels of oil.  

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