Kampala — OIL seeps at two intervals have been encountered on Lake Albert, at about 950 metres down the well. The well, called Mputa 1, was drilled to 1,186 metres and the sampling and pressure-testing programme is continuing.

"The results of Mputa 1 well confirm a working hydrocarbon system and support for further evaluation of this discovery and the surrounding area where a number of other good prospects and leads have been identified," a statement from Hardman Resources, the Australian company exploring for petroleum on the lake, said.

The statement, which was signed by Peter Thomas, the company's chief financial officer, says more work should be done before any comment can be made on the size or commercial significance of this discovery and the potential for more resources in the area.

The reservoir sands in the well were poorer than expected for some of the intervals, but there is significant encouragement that the well and seismic data can provide better understanding of reservoir sand distribution and considerably reduce the risk of other prospects.

"This is a very encouraging result. Even though there is still uncertainty about the size of Mputa and whether it has commercial potential, this well has confirmed the existence of a working petroleum system. It has been an important step in reducing exploration risk in the basin," Simon Potter, the chief executive, said.

Upon completion of the Mputa well exploration, the rig will be moved to Waraga 1 location, which is about 19km north-east of Mputa 1.