Addis Fortune (Addis Ababa)

5 August 2012

Ethiopia: Tullow Oil Set to Start Drilling in January

Addis Ababa — The global oil and gas exploration company, Tullow Oil Plc, is set to start drilling on the concession it has in South Omo Valley, Southern Regional State, beginning January 2013, a senior official at the Ministry of Mines (MoM) disclosed to Fortune.

The company, headquartered in London, has signed an agreement with Ethiopia's Ministry of Mines for exploration of the South Omo Block, through the Canadian based Africa Oil Plc. It acquired a concession right for 50pc over the block in 2010, which was increased to 65pc subsequently. It was White Nile, a UK based company but with a link to South Sudan, which had won the original concession to these bloc from the Ministry, back in the mid-2000s.

Tullow has concession rights in 23 countries, including three African countries: Ghana, Kenya and Uganda. Its recent drilling activities in the two neighbouring African countries have brought success stories. The drilling conducted in Kenya on January 2012 resulted in discovery of 1.1 billion barrels of oil.

The company has finalized the Full Tensor Gradimametric Gravity survey on the Southern Omo bloc, in August 2011. It is also finalizing collecting seismic data of the area sub-contracted to the Chinese BGP Geo Service Plc. It is while following these test activities that Tullow Oil Plc managers informed higher Ethiopian officials of an oil reserve which is projected to be much larger than either Kenya or Uganda. They have also reassured Ethiopian authorities with a discovery of oil within a year. Ethiopian authorities are, however, very reluctant to speak on the issue for fear of giving false alarm to an otherwise eager public.

But senior managers of Tullow Oil (Ethiopia) have informed officials at the Ministry that they are now ready to conduct drilling in January, three months later than their original tentative program.

"We cross our fingers and pray for better results," Sinkinesh Ejegu, minister of Mines (MoM), told Fortune.

However, Tullow's plan to extend its survey in the western Omo has been challenged, as it needs to cross Omo River and there is no bridge constructed, according to internal reports of the Ministry's report.

If drilling begins according to schedule, it will be the first such undertakings in the Southern Omo Valley, an area located on the Great Rift Valley of East Africa. It is an area of intense interest for tourists owing it to its diversity of language and culture. It is also a valley where Omo River runs through before its joins Lake Turkana; the federal government is building one of the largest dams in the country with a power generation capacity of 1870mw, whose construction is completed 60pc, according to its project manager, Azeb Asnake (Eng.), who spoke last week to the state English daily, The Ethiopian Herald.

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