Oil discovery could total billions of barrels but the curse of African oil is familiar.
The government’s move sparked two days of mass protests from Mutebi’s supporters in and around the capital.
The violence erupted on Thursday, as demonstrators threw stones and burned tyres while police, backed by the military, opened fire and sprayed tear gas to disperse the crowds.
Judith Nabakooba, a police spokeswoman, said security forces had restored calm to the capital city on Saturday.
“We think we have neutralised all the groups which have been causing disturbances for the last two days. The city and suburbs are calm now,” Nabakooba told Reuters.
But Malcolm Webb, a journalist in Kampala, said the situation remained tense in some areas.
“This morning things were calm and there was very little evidence of security deployments on the streets, but things have subsequently started to get more restless again,” he told Al Jazeera.
“I was outside the [king’s] palace earlier where a group of about 30 people had come in from outside Kampala. They were chanting, waving banners and some of them said they are ready to fight, ready to give their lives.”
A day earlier, rioters set fire to tyres and vehicles at a police station on the outskirts of Kampala.
The violence came as Yoweri Museveni, the Ugandan president, announced in a televised national address on Friday that his government would not give in and allow Mutebi into Kayunga county.
“I told him [the king] that the meeting in Kayunga will not take place until some conditions that will be communicated to him by the minister of internal affairs are met,” Museveni said.
Buganda is one of the east African nation’s four ancient kingdoms.
It was abolished by Milton Obote, the former leader, in 1966 but restored by Museveni in the early 1990s.
“The government believes the king of the Baganda is going on a mobilisation tour telling his people about land issues”
Hassan Isilow, independent journalist
Hassan Isilow, an independent journalist based in South Africa, told Al Jazeera, two issues were causing the problems.
“It’s about identity. The Baganda greatly associate with their king and believe the president of Uganda doesn’t want to give them separate status,” he said.
“The other issue is land. The government believes the king of the Baganda is going on a mobilisation tour telling his people about land issues.
“In 1966 a similar incident happened when the father of the current traditional leader was exiled to London. This time round we don’t think history will repeat itself, but these tensions are very high in Kampala.”
The traditional Baganda king holds a largely ceremonial position in Uganda, but holds considerable influence among his people.
The Bagandas represent 6.4 million of Uganda’s total population of 32 million, and they have advocated a federal system of government, which the administration of Museveni opposes.