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Petronas to revamp exploration work in Ethiopia

 Saturday, 16 May 2009
By Kaleyesus Bekele

The Malaysian oil and gas giant, Petronas, is to revamp its oil exploration projects in Ethiopia, which was in a kind of limbo after the massacre of 74 civilian workers, including nine Chinese nationals in the Ogaden basin Abole exploration site, in the remote eastern part of Ethiopia.  

A high-level delegation of the company last week came to Addis Ababa to meet officials of the Ethiopian Ministry of Mines and Energy (MME). Reliable sources told The Reporter that the delegation conferred with Alemayehu Tegenu, Minister of Mines and Energy, Dr Ketsela Tadesse, head of the Petroleum Operation Department,  and other senior officials of the ministry on the oil exploration projects in the Ogaden and Gambella basins. Executives of Petronas expressed the company's firm commitment to continue work on the oil exploration projects.

Petronas has hired a Dubai-based company called Weather Ford to execute the job. Sources told The Reporter that Weather Ford has agreed to drill exploration wells in the Genale block, block 11 and 15. Sources said Weather Ford is mobilizing its crew and drilling rigs. Weather Ford is engaged in oil and gas exploration work in the Middle East.     
In 2004 Zhongyuan Petroleum Exploration Bureau (ZPEB), a Chinese company, was contracted by Petronas to do seismic survey and drill exploration wells in the Gambella block owned by Petronas. Petronas acquired the Gambella block covering about 16,000 sq. km of land in June 2003. ZPEB collected seismic data on 1500 km. Accordingly, in 2005 ZPEB drilled the first wild-cat well in Jikaw locality, only 175 km from the Ethio-Sudan border. The company drilled the second well in Jakaranda locality in 2006. Both wells were dry. Petronas spent 32 million dollars for the drillings and testing. ZPEB withdrew from Gambella after it finalized it work in 2006.

However, in the same year, Petronas hired ZPEB to conduct seismic survey in the Ogaden basin. In July 2005, Petronas acquired three blocks in the Ogaden basin-Genale block (24,420 sq. km., Kallafo 30,612 sq. km. and Welwel-Warder 36,796 In 2006 ZPEB started collecting seismic data in the three blocks.

In October 2006, South West Energy hired ZPEB to do seismic survey in the Ogaden basin. In December 2005, South West Energy, a company owned by an Ethiopian businessman, acquired a Degehabur block covering 21,187 sq. km. of land. In January 2007, ZPEB commenced collecting seismic data in the Degehabur block. On  Apill 24, 2007 the Ogaden National Liberation Front (ONLF) attacked the Abole exploration site in the Degehabur zone of the Somali Regional State. Seventy-four civilians, including nine Chinese nationals, were killed in the attack.

In a related news, a Canadian petroleum company, Epsilon Energy Ltd, on Thursday signed petroleum exploration agreement with the MME. The agreement will enable the company to prospect for oil and gas reserves in the Tigray and Amhara regional states. Alemayehu Tegenu and Daniel Ward, international exploration manager, signed the accord. According to the agreement, the company will have an exclusive right for petroleum exploration and production activity on 82,000 sq. km. of land for the coming eight years.

Epsilon had disclosed that it has identified prospective areas for oil and gas exploration in north-western Ethiopia, west of lake Tana. The Abay gorge and Tana surrounding area is one of the five sedimentary basins in Ethiopia.

The company had disclosed its interest to acquire an oil concession in the study agreement area.  

On June 6, 2008, Epsilon signed the “North West Area Study Agreement” with the MME, which covers 154,871.5 sq. km. of land in the north-western sector of the country. The agreement has an initial term of one year.

In its update on exploration activity, Epsilon said after completing an analysis utilizing existing landsat imagery, digital evaluation mapping, hydrology and old gravity readings, Epsilon identified a prospective area of approximately 27,500 sq. km. within the boundaries of the north-west area study agreement that warranted conducting a high resolution airborne gravity and magnetic survey.

The company contracted with New Resolution Geophysics out of South Africa to conduct the survey, which is now complete. According to Epsilon, the survey identified numerous structural prospects of varying sizes, some of which are very large.

To date, there are 11 companies which signed 20 petroleum exploration agreements in Ethiopia.

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