Get ready for the first-ever exploration in Ethiopia’s Omo region—and it could be VERY BIG. After all, it’s an extension of the massive finds in Kenya.
Ethiopia has the misfortune of being entirely landlocked as a result
of the 30-year war with neighboring Eritrea. Still, oil and gas
exploration here is advancing must faster. It has less potential—and no
offshore prospects—which should make it less attractive than Eritrea,
but foreign oil and gas companies favor it nonetheless.
February, UK-based Tullow Oil Plc (TLW)—the same company behind the
massive discovery in Kenya in early 2012—announced it would finish
drilling its first well in western Ethiopia’s South Omo Block by the end
of this quarter. The foray into Ethiopia was based on geography. This
block is considered an extension of Tullow’s Kenya concessions and it
all is part of East Africa’s Tertiary Rift (which includes Uganda). If
they find oil in this well it would be the first discovery in Ethiopia.
The well (Sabisa) belongs to Tullow, Africa Oil Corp. (AOI) and Marathon
Oil Corp. (MRO).
There have already been some gas discoveries in
eastern Ethiopia, but the target here is potential oil in the country’s
west—as part of the same oil system found in Kenya. What are the
chances of striking oil at Sabisa? Well, the explorers say the structure
is virtually identical to the structure of the Ngamia well, the site of
Tullow’s massive find in Kenya. According to Tullow, Sabisa is
targeting some 140 million barrels of oil resources.
would be fairly attractive, with the Ethiopian state taking 10% of any
discovery. Tullow and partners plan to build a total of 11 wells in what
is labeled the Kenya-Ethiopia Frontier Basin. Three of those wells will
be in Ethiopia.
Ethiopia also has an estimated 3.89 billion tons of oil shale (enough
to produce about one trillion barrels of oil, roughly) in Tigray State,
on the border with Eritrea. It is also believed to have around 100-120
million tons of oil shale in the Delbi.
Ethiopia has also
recently build its first drone, which could be used for surveying oil
and gas prospects (not to mention the military applications for
monitoring the insecure borders with Eritrea, Somalia, Kenya and South
Another reason Ethiopia has been favored by foreign
investors—aside from its geological connection to Kenyan oil and gas
prospects—is its security partnership with the US, both in regards to
Somalia and Yemen. And this is something that Eritrea eyes warily.
By. Oilprice.com Analysts