Petroleum Africa
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Wednesday, October 6, 2010
Malaysian state player Petronas Carigali Overseas has made a deal with Ethiopian player SouthWest Energy that will see it sell all of its assets to the local independent.
The agreement reached on September 24, will see SouthWest acquire 100% of Petronas’ interests in a bevy of PSAs – blocks 3, 4, 11, 15, 12, 16, 17, 20, and the Calub & Hilala contract area. All of the blocks are located in the Ogaden Basin, which covers 350,000 sq km and is the largest proven hydrocarbon bearing sedimentary basin in Ethiopia with proven gas reserves of 2-4 Tcf.
A few years back on the sidelines of an industry event Tewodros Ashenafi, chairman and CEO of SouthWest Energy was surprised when a Petroleum Africa representative queried as to whether his company was new to the game. “You don’t know us? If you don’t know us you will. Pay attention.” And true to his word SouthWest has regularly featured in the news out of the East African country. Southwest already has access to three blocks in the Ogaden Basin, Blocks 9, 9a, and 13 covering 29,000 sq km. Southwest’s latest acquisition adds considerably to its total acreage.
Commenting on the latest acquisition of the Petronas assets, Ashenafi said:
"This is a fantastic opportunity for SouthWest Energy to expand its exploration and production activities in Ethiopia…This transaction will transform SouthWest Energy into the leading force in the Ethiopian upstream industry. We intend to develop these new blocks together with our existing blocks as quickly as possible and to work on developing transport solutions for hydrocarbons in the Ogaden Basin. This development will be a cornerstone not only for SouthWest Energy's future growth, but also for the oil and gas industry in Ethiopia."
Hopefully Southwest will not face the same issues that Petronas has faced on the acreage, specifically the Ogaden National Liberation Front (ONLF) rebels. In May the rebel group seized the Petronas’ Hilala gas field. In September the ONLF issued new warnings to foreign oil and gas firms to stay out of the Ogaden region. Perhaps Southwest, being an indigenous firm will have an easier time of it.
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