24 February 2013

Ethiopia: Canadian Firm Inks Oil Exploration Accord Amid Rebel Threat

Addis Ababa — Despite a warnings from a rebel group earlier this week, Canadian oil and gas company Africa Oil Corporation (AOC), said on Sunday that it has signed a petroleum exploration and production agreement with Ethiopia.

The Ogaden National Liberation Front (ONLF), which is blamed for the killing of 65 Ethiopians and nine Chinese oil workers in an attack at a Chinese-run oil venture in 2007, on Monday accused the Canadian company of conspiring with the government to exploit oil resources in the Ogaden region.

The group warned the company to refrain from oil exploration activities in the country's eastern region or face consequences.

The Ethiopian government immediately dismissed the warning as a desperate propaganda ploy by the few remnant leaders of the group.

State mines minister Sinknesh Ejjig and AOC vice-president of business development, James R. Phillips, signed the agreement on Thursday few days after the rebel threat.

The fuel exploration agreement covers 42,000 and 50,000 square kilometres on the East African nation's Rift Valley Block of South Omo and Ogaden regions respectively.

"The Company would execute its activities as per the law of the country and based on international experiences" said Ejjigu.

Noting his company's vast experience in petroleum extraction and development activities in many African countries, Phillips said the project will not only bring economic benefits to Ethiopia but eventually contribute towards development to the entire region and the continent at large.

The ministry of mines said AOC, in collaboration with two London-based oil companies - Tullow Oil plc and New Age Ethiopian Ltd, is "undertaking encouraging activities in petroleum exploration and development".

Since 2005, a growing number of foreign oil companies have shown interest in engaging in exploration efforts in Ethiopia despite repeated threats by the ONLF rebel group.

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