Sunday, February 24, 2013

Tullow Drills for Ethiopia’s First Oil in Kenyan Extension

(Feb 23, Bloomberg)--2013, Tullow Oil Plc (TLW), the U.K. explorer that found Kenya’s first crude a year ago, is about to find out whether the resources extend into neighboring Ethiopia, a nation dependent on agriculture that’s yet to discover any petroleum.

Tullow, Africa Oil Corp. (AOI) and Marathon Oil Corp. (MRO) plan to complete their Sabisa well in western Ethiopia’s South Omo Block this quarter. “The first discovery would be big news,” said Martin Mbogo, Tullow’s manager for Kenya, where its Ngamia well struck oil in March. “That would be historical for Ethiopia.”

Tullow, a London-based explorer, is targeting East Africa’s Tertiary Rift, a geological fault that’s yielded oil in Uganda as well as Kenya. For the company, an Ethiopian find may prove a new oil province. For the country, evidence of crude could help the government curb energy imports and diversify an economy that relied on coffee for about a quarter of export earnings in 2011.

“We are importing every drop of oil and gas,” Ethiopian Mines Minister Sinknesh Ejigu said last week. “We want to change this game.” Licenses won by Tullow and Africa Oil in Kenya and Ethiopia cover an area almost as large as the North Sea.

Only 11 wells have been drilled there so far, compared with more than 2,400 wells in the sea. While gas has been found in eastern Ethiopia, the partners are focusing on the western Omo region in the hope it will prove the extension of the petroleum system from Kenya. Read more from Bloomberg »

Related topics:
Ethiopian rebels warn Canadian firm against exploring oil in the country’s east 

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