Chinese Company Starts Oil Exploration in Western Ethiopia

Text of report in English by Ethiopian newspaper The Reporter website on 4 March

The Chinese petroleum company, Zhonguan Petroleum Exploration Bureau (ZPEB), last week started drilling the first exploration well in the Gambela basin, western Ethiopia. The minister of mines and energy [MME], Alemayehu Tegenu, and Abiy Hunegnaw, head of the petroleum operation departmnt with the ministry, last Friday [3 March] visited the oil exploration project in the Gambela basin. The officials attended the launching of the drilling on the first exploration well (wild cat well) in the region.

ZPEB was contracted by Petronas, the Malaysian Petroleum Company that was given the Gambela concession in 2003, to undertake drilling works. Petronas and MME signed the petroleum exploration and production sharing agreement that enables the company to explore and develop the oil reserve in the Gambela basin, near the Sudanese border. The Gambela concession stretches across a 19,600 square km of land. The Gambela basin is an extension of the Melut basin, located in south Sudan.

The Melut basin is known for its huge amount of oil reserve. Petronas has been exploring and developing oil fields in the Sudan. China controls 40 per cent of the oil development activity in the Sudan while Malaysia and India each have 30 and 25 per cent stakes respectively in the oil industry.

In the past two years, ZPEB, hired by Petronas, has been undertaking seismic survey in the Gambela basin. Experts of Petronas analysed the seismic data collected from Gambela and identified the specific areas where some exploration wells would be drilled. Petronas has allocated 16m US dollar to cover the expenses of the drilling on the first well. The drilling rig and other equipment were imported from China.

Senior officials of MME said the drilling would be finalized within three months, adding that oil testing will be conducted in the exploration well. The officials indicated the depth of the well was not yet known. “We are quite satisfied with the exploration activities of Petronas. And the result of the testing in the first well is very important to decide whether or not to drill more wells,” they said. “Oil show could be discovered or it could be a dry well” they added. Last August Petronas took three concession areas in the Ogaden basin, eastern Ethiopia.