Ethiopia to offer 14 oil/gas exploration permits

Tue Nov 24, 2009 3:19pm GMT
 

By Barry Malone

ADDIS ABABA (Reuters) - Ethiopia will offer up to 14 licences for oil and gas exploration over the next three years despite threats from rebels who say they will attack oilfields run by foreigners, the government said on Tuesday.

"We have 11 companies exploring in Ethiopia now," said Minister for Mines and Energy Alemayehu Tegenu.

"We are still inviting companies to come talk to us about licensing and we hope to have a total of 25 in three years time, and that will be enough," he told Reuters in an interview.

The 11 foreign companies exploring the Horn of Africa nation include Africa Oil Corporation, South West Energy and Malaysia's state-owned Petronas .

Apart from a small discovery of natural gas, which Petronas has signed a $1.9 million deal to extract, Ethiopia has not uncovered significant oil or gas deposits.

The government says, however, that the Ogaden basin may contain gas reserves of 4 trillion cubic feet and points to nearby countries such as Sudan and Yemen as evidence there could be major oil deposits under Ethiopia's deserts.

The minister said Ethiopia would offer incentive packages to companies on a case-by-case basis, depending on the size of their investment.

"Incentives that we can discuss include duty-free imports of machinery and refunds of exploration costs should oil or gas be discovered," Alemayehu said.   Continued...

<p>An oil rig prepares to drill in western Uganda, near the shores of Lake Albert, June 15, 2007. REUTERS/Tim Cocks</p>

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