Petroleum Africa
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Tuesday, February 20, 2007
Reports indicate that the Ethiopian Ministry of Mines and Energy is keen to sign as many exploration contracts as possible within the shortest time, and as such, will put up an international tender for two oil exploration blocks. The blocks to go on offer will be Block 7 and 8, in the Ogaden basin, in eastern Ethiopia near the Somali regional State.
Joint geological and geophysical research studies have already been launched in Ethiopia. There are about twenty blocks in the Ogaden basin and 16 of them were given to different companies. Petronas, Pexco, Lundin, South West, and Afar Explorer have concession areas in the Ogaden basin which covers 350,000 sq km of land. According to Alemayehu Tegenu, Ethiopian Energy Minister, three companies have demonstrated a particular interest in the acquisition of blocks 7 and 8.
In August 05, Malaysia’s Petronas, acquired four blocks in Genale, Kelafo, Warder and Ferfer localities covering 93,000 sq. km. Petronas is currently undertaking a seismic survey in Genale locality. Last April, Petronas won the Calub and Hilala gasfield tender. The gas fields are located some 1,200 km east of Addis Ababa. Petronas and the Ministry are expected to sign development and production sharing agreements next month enabling Petronas to extract the natural gas reserves.
Meanwhile, Petronas has also asked to be awarded Block 11 and 15 near the Calub and Hilala gas fields. Alemayehu revealed that there is a very big probability that the blocks would be given to Petronas. The Malaysian company is offering to construct a gas processing plant and a gas pipeline that stretches from the gas fields to the port of Djibouti. The company also proposed to drill additional wells in Calub and Hilala where so far 14 wells have been drilled.
Gas reserves are estimated at 113.3 billion cubic meters. Petronas, which has proposed to invest up to $ 1.9 billion for the gas development project, will conduct a seismic survey in blocks 11 and 15 and will drill an exploration well. Petronas is also willing to pay $75 million as pre-development cost already borne by the Ethiopian government related to the Calub and Hilala gas fields.
Sweden’s Lundin Petroleum AB through its subsidiary, Lundin East Africa, will commence oil exploration in Ethiopia before the end of the year, according to Exploration Manager James Phillips. The exploration agreement covers Blocks 2 and 6, which span an area of 24,000 sq km and are located just west of the Calub and Hilala oil and gas discoveries. Lundin Petroleum holds 100% of the contract area for the duration of the exploration period, but Ethiopia has an option to participate with up to a 10% interest following any commercial discovery.
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