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Search For Oil Intensifies In Ogaden Region of Eastern Ethiopia

Ethiopia has hydro-carbon potential. The country has five sedimentary basins - Ogaden, Gambella, Omo, Abay and Tigrai - which are believed to be promising for oil discovery. Oil seeps are noted in different areas and signs of oil and gas were in some of the exploration wells drilled in the Ogaden basin, in south-east Ethiopia.

The history of oil exploration for petroleum in Ethiopia is long. It began in the 1920s when oil seeps were reported.  According to a study paper, the first oil seep in Ethiopia was reported in 1860 and by the 1920s the prolific seeps of oil in the Red Sea coast were widely known. Early reports refer to oil seeps in the Ogaden basin: in the Gara Mulatta mountains near Harrar, in the Fafan and Gerger river valleys and near Jijiga.

The first exploration license for the then Harrarge province was granted in 1915 and subsequently transferred the Anglo American company, a London subsidiary of Standard Oil company, ultimately incorporated into Esso. In 1920 this company organized a survey party, the so-called Dudley Expedition, to conduct geologic surveys in northern Harrarge between Harrar and Jijiga and the Afar depression. Two possible drilling sites were noted but the final geological report on the concession was negative and this was cancelled.

During the next decade, exploration in Ethiopia focused on the Red Sea coastal and it was not until 1936, during the Italian occupation, that systematic geological mapping of the Ogaden Basin began. This work was performed by AGIP and their records were later used by other companies in early studies of the region.

The history of oil exploration in the Ogaden basin dates back to the 1940s. The discoveries of oil in Saudi Arabia raised hope for oil discovery in the Ogaden. It is not only the proximity of the region to the Middle East that raised hope, but also the similarity of the nature and age of the sedimentary rocks in the Ogaden and the oil productive basins in the Middle East.

Sinclair Petroleum was granted an oil exploration license covering all Ethiopia in July 1945. Preliminary work on the regional geology and detailed discussions with AGIP geologists focused interest on the Ogaden region and field survey began in that area. The influence on this work of the idea that the Horn of Africa was a similar geologic province to Saudi Arabia is revealed clearly in the company’s final report. Sinclair relinquished the concession in December 1956.

Studies indicate that the source rocks in the Ogaden region had generated oil. The question is where the oil reserve is to be found. In order to find the reserve many wells have to be drilled. In the past 50 years or so only 46 wells were drilled in the region.

In March 1959 Gewerkschaft Elwerath of Germany signed a concession agreement covering the eastern Ogaden region. Geology and photography focused attention in the lower Wabishebelle area where seismic and gravity survey commenced in 1960. Based on the results of this work the first exploration well, Abred-1, was drilled in 1963. However, the well was abandoned without significant hydrocarbon shows.

In 1969 Tenneco, an American oil company, obtained an exploration license over the Ogaden basin. After conducting various surveys, Tenneco drilled the first well, El Kuran-1, in 1972. The well had continuous oil shows. A step-up well, El-Kuran-2, perhaps seeking better result, also had oil and gas shows. The company drilled other seven wells.

The third well, Calub-1, discovered a gas field. Magan-1 and Hilala-1 wells, both west of Calub-1, yielded noncommercial free oil. Tenneco relinquished the concession in 1975 in the wake of the Ethiopian revolution. The military junta expelled all western companies.

A senior petroleum expert who used to work for the Ministry of Mines and Energy told The Reporter that the results obtained from the exploration work in the Ogaden were encouraging. The Soviet Petroleum Exploration Expedition (SPEE) conducted various surveys and drilled several exploration wells. SPEE confirmed the size of the natural gas reserves in the Calub and Hilala gas fields. The data collected by SPEE is still used by other companies engaged in oil exploration projects in the region.

Two American companies, Hunt and Maxus, conducted various geological surveys in the early 1990s. In July 2005, Petronas, the Malaysian oil and gas giant, acquired three blocks in the Ogaden basin - Genale block 24,420 sq. km. Kallafo 30,612 sq.km. and Welwel-Warder 36,796 sq.km. Previously, Petronas had an exclusive study right agreement with  the Ethiopian Ministry of Mines and Energy (MME) in the Ogaden basin which lasted for two years. The company had upgraded the seismic data collected from the region in Kuala Lumpur. Experts of the company, in collaboration with the MME, analyzed the data. Based on their findings, Petronas selected three blocks it took in 2005. Petronas has also acquired block 15 and 11 in the Ogaden basin.  Petronas won the tender put up by MME in 2005 to privatize the Calub and Hillala gas fields in the Ogaden. Petronas paid 80 million dollars to the gas fields. The natural gas reserve is estimated at 116 billion cu.m.

Petronas, started drilling the first wild cat well in the Ogaden basin in the Genale block three weeks ago. Petronas has hired an oil exploration company, Weather Ford, a British company based in Dubai. Weather Ford is contracted by Petronas to conduct seismic survey and drill exploration wells in the Ogaden basin. The exploration well is 3000 meter deep. It will take Weather Ford two and half month to finalize the drilling.  The Genale block is one of the promising areas for oil discoveries in the Ogaden basin. “ We need to do more,” says a retired senior petroleum expert. “When you compare the results obtained with the exploration work done it is really encouraging. More surveys should be conducted and more wells have to be drilled. Hunt discovered oil in Yemen after it drilled 134 wells. So far in Ethiopia a total of 48 wells were drilled, 46 of them in the Ogaden and two in Gambella.”

Petronas has abandoned the Gambella block in western part of Ethiopia. The company acquired the Gambella concession, which is 16,000 sq. km. wide,  in June 2003. After collecting seismic data from the region, the company drilled two wild cat wells in the block in 2006 and 2007. Unfortunately, both wells were dry (no oil inflow). Reliable sources told The Reporter that the company has now relinquished the concession.

Oil exploration is a capital-intensive work. Petronas spent 32 million dollars for the two wells drilled in Gambella-Jikaw and Jacaranda. Yet both were dry. It takes a lot of money and time for the projects to bear fruit.

By Kaleyesus Bekele