(MBendi): Ethiopia: Oil And Gas Industry Excerpts:
Recent assessment of the hydrocarbon potential of Ogaden Basin was included in the study made by Alconsult International Ltd. on behalf of the Canadian International Development Agency (CIDA). The study is part of a larger study, the East Africa Regional Hydrocarbon Study which involves the participation of Ethiopia, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, South Africa and Tanzania. The assessment proved that the Ogaden basin is a reasonably prospective area for petroleum resources.
Ethiopia: Oil And Gas Industry
Overview
Ethiopia is endowed with energy resources such as coal, biomass, solar energy and natural gas and is not a great consumer of petroleum fuels.
Current natural gas reserves are estimated to be 24 million cubic metres.
95% of the energy consumed in Ethiopia is derived from traditional energy resources. The balance is made up of electricity and oil products. Less than 4% of the population, however, is supplied with electricity.
Consumption of liquid fuel products, in 1997, according to the US Department of Energy was approximately 550 000 metric tons.
The industry is regulated by the Ministry of Mines and Energy. The Ethiopian National Committee (ENEC) was established to deal with issues related to the energy sector and to assist in policy making and setting of priorities. ENEC operates through the Ministry of Mines and Energy as a planning secretariat.
Energy parastatals and the agencies established for geothermal and petroleum exploration report to the Permanent Secretary of the Ministry or to the Minister directly. His Excellency, Izaddin Ali Zikeh is presently the Minister of Mines and Energy.
Petroleum legislation was promulgated in 1986.
Upstream
The resource potential of petroleum and other types of energy appears to be highly promising. The Ethiopian government has selected potential petroleum development areas and these have been made open for private investment.
In these areas, some geological exploration has been carried out and there are indications of the occurrence of oil and gas.
In 1974 Tenneco made a discovery in the Ogaden region of Ethiopia with estimated reserves of 2.4 billion cubic feet of natural gas.
Recent assessment of the hydrocarbon potential of Ogaden Basin was included in the study made by Alconsult International Ltd. on behalf of the Canadian International Development Agency (CIDA). The study is part of a larger study, the East Africa Regional Hydrocarbon Study which involves the participation of Ethiopia, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, South Africa and Tanzania. The assessment proved that the Ogaden basin is a reasonably prospective area for petroleum resources.
This, the largest sedimentary basin, contains a commercial discovery in the form of a gas condensate field, the Calub Gas Field and is situated in the eastern part of the country. The basin has an area of 350,000 square kilometres and sedimentary thickness of up to 10,000 meters.
The reserve potential of Calub gas field is proved to be 2.7 TCF and this resource is under development for production.
In order to exploit these reserves, the Ethiopian government established the Calub Gas Share Company (CGSC) with, initially, a large part of the share belonging to the government. Now with its serious interest in involving private investment in all economic sectors in the country, the government has decided to privatize 100 percent of its share and actions are being taken towards this end.
In fact, it has been reported that, in December 1999, the government of Ethiopia and Sicor of Texas, signed a preliminary agreement for a venture to produce natural gas and associated liquids. The project will be known as the Gazoil Ethiopia Project (“GEP”), and involves the acquisition by GEP of two concessions in the Calub and Hilala areas of the Ogaden basin, containing 4 trillion cubic feet of gas and 13.6 million barrels of associated liquids.
GEP will also reportedly acquired approximately 95% of the Calub Gas Share Company (“CGSC”). GEP will also construct a 600-kilometer, 24-inch gas pipeline to transmit gas and associated liquids to Awash, a town 220 kilometres east of Addis Ababa.
Also in the Ogaden Basin, Ethiopia Hunt Oil, the local branch of the Canadian international, Hunt Oil Company, acquired the rights to the Genale River concession which borders Somalia and Kenya in 1989.
There is no commercial production of hydrocarbons in Ethiopia as yet.