Business in Africa (Johannesburg)

15 May 2006

Ethiopia: Trouble Brewing in Country's Gas Fields

Addis Ababa — A rebel group has threatened that civil war would occur if the Ethiopian government does not remove troops that it has placed in the Calub and Hilala gas fields in order to safeguard the area for international investors.

On Sunday, a rebel movement called the Ogaden National Liberation Front (ONLF) said that "thousands of Ethiopian government troops have been pouring into Ogaden in recent weeks". ONLF has threatened armed conflict should the area not be negotiated into the hands of Somalis living in Ethiopia's Ogaden region.

Meanwhile, India's state-run Gas Authority of India Limited (GAIL) has sought political clearance to participate in the development of the Calub and Hilala gas fields in Ethiopia. The company, in a joint-venture with GSPC, has been short listed by government.

The rebel group specifically warned several international oil companies who tendered for access to the fields, including Gail, that they would be attacked.

The government, however, believes that there is little merit to the threats. The deployment of troops before international companies, China's Zhongyuan Petroleum Exploration Bureau and Malaysia's Petronas, conduct seismic surveys to verify how much gas is available, suggest otherwise though.

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