24 April 2013

Ethiopia: Desalegn Says "Too Early" to Conclude Oil Discovery in Ethiopia

Addis Ababa — Ethiopian Prime Minister, Hailemariam Desalegn, said that recent reports alleging oil discovery in the horn of Africa's nation are misleading.

Addressing a parliament session on Tuesday Hailemariam told lawmakers that the drilling work is in its early stage and any conclusions of oil discovery are only based on unfounded suspicions.

He further said that the uncertain claims of oil discovery disseminated by oil companies are only intended to secure loans.

"We don't have to be confused that these companies always rush to the media whenever they get a sign of oil discovery in order to get loan -meaning for the sake of securing loan for them [run the project]", he said.

Hailemariam was referring to the London-based oil exploration company (Tullow Oil) which found crude oil in Kenya last year and currently engaged in petroleum exploration in Ethiopia's South Omo valley to find out if there is an oil basin extended from resources in neighbouring Kenya.

He said although the oil company alleged that it found a sign of oil discovery that however doesn't necessarily mean that it is economically feasible for the company to start oil production.

"It needs further and additional analysis to reach conclusion that it is economically feasible for production," he stressed.

However the premier partially admitted the presence of some signs that indicate oil deposit along Ethiopia's western South Omo block.

"Discovery can be certain after six or seven months of thorough drilling of the test well. The norm of these companies is clear globally. Drilling one test well requires 50 million US dollars."

The Prime Minister accused the company of spreading false reports so as secure $ 50 million loan grant it needs to drill further 2,600 meters.

He further said only 800 meters are drilled so far and reaching conclusions at this depth is misleading and confusing.

It is to be recalled that Tullow Oil has recently dismissed reports by the US-based website, Energy and Capital, and a number of news outlet claims that the oil company had discovered commercial-grade oil in the Rift Valley of Ethiopia near the border with Kenya.

The Kenya-Ethiopia Tertiary Rift, which stretches from southern Ethiopia to south-western Kenya, is believed to have as much as 23 billion barrels of oil and gas resources.

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