British explorer lands on an oil well in Uganda

LONDON, Tuesday

British oil explorer Heritage Oil Plc said it had made a "world class" oil discovery in Uganda.

Heritage said it believed reserves in the Giraffe 1 well and a linked discovery known as Buffalo, which was announced in December, could total more than 400 million barrels of oil.

The company said the finds in an area known as Block 1 may extend further to the north and east and may include the Buffalo East prospect, which it said could create a very large structure of up to 90 square kilometres.

Heritage runs Block 1 and another block, 3a, and has a 50 per cent equity stake in the exploration licences, with Tullow Oil holding the other 50 percent.

Heritage Chief Executive Tony Buckingham said: "The large Buffalo-Giraffe structure is a world class discovery which could prove to be substantially more extensive than currently outlined, unlocking the multi-billion barrel potential of Block 1."

Investors

Meanwhile, oil fell towards $36 a barrel on Tuesday to its lowest level in three weeks as further signs the world economy was slowing sharply dampened demand expectations.

Worsening recessionary signals saw investors flee risky assets such as commodities for US Treasury bonds on Monday, while European shares fell for a fifth session on Tuesday as expectations mounted for poor results in this reporting season.

US light crude for February delivery fell $1.15 to $36.44 a barrel by early trading0909 GMT. Prices have fallen by almost $15 in the past week, touching a low of $36.10 a barrel early Tuesday.

London Brent crude fell 72 cents to $42.19 a barrel.—Reuters