Ethiopia's Economic Climate

Sector Policies And Strategies: Petroleum Resources

The four potential areas for petroleum resources are classified in their respective occurrence basins; the Ogaden, Mekelle, Abbay and Gambella Basins. Out of these, the Ogaden Basin has been extensively explored by the government and international oil companies. The Ogaden is the location of Ethiopia's largest gas condensate development, the Calub field.

The policy and strategy towards the petroleum sub-sector is similar to that of the mineral sub-sector. The sub-sector is expected to be developed by international oil companies allocating risk capital for the exploration and development of petroleum resources.

THE PETROLEUM SUB-SECTOR

Ethiopian Petroleum Potential

The sedimentary regions of Ethiopia cover a significant portion of the country and comprise five distinct sedimentary basins, namely the Ogaden, Blue Nile, Mikele, Gambella and Southern Rift basins. Generally about 40% of the country is covered by sedimentary rocks of Permo-Triassic continental to deep marine sediments and Cretaceous rift sediments and these are prospective for petroleum resources.

Current Petroleum Exploration and Development Activities

The largest sedimentary basin with a commercial discovery of a gas condensate field, the Calub Gas Field is situated in the eastern part of the country. The
2 basin has an area of 350,000km and sedimentary thickness of up to 10,000 meters. The reserve potential of Calub gas field is proved to be 2.7 TCF and this resource is under development for production. The government has established the Calub Gas Share Company, which will shortly be fully privatized.

Currently, one international oil company, Ethiopia Hunt Oil, has a concession for petroleum exploration in Ethiopia, and interest for exploration and development are increasing as indicated by the growing number of companies inquiring about petroleum prospects. Recent assessment of the hydrocarbon potential of Ogaden Basin was included in the study made by Alconsult International Ltd. on behalf of the Canadian International Development Agency (CIDA). The study is part of a larger study, the East Africa Regional Hydrocarbon Study which involves the participation of Ethiopia, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, South Africa and Tanzania. The assessment proved that the Ogaden Basin can reasonably be considered a prospective area for petroleum resources.

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