Ethiopia: Ministry, Foreign Company Sign 50 Million U.S. Dollars Petroleum Exploration Agreement
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The Daily Monitor (Addis Ababa)
8 August 2008
Posted to the web 8 August 2008
Fikremariam Tesfaye
Addis Ababa
The Ministry of Mines and Energy (MoME) and Falcon Petroleum Limited, a company from Cyprus, signed an agreement enabling the later explore and develop petroleum in the Abay Basin, around Wollo, in the Amhara regional state.
Alemayehu Tegenu, Minister of MoME and Radhawan Sadik Hadi, Deputy Managing Director of the company signed the agreement which grants 50 million USD for initial phase of the project on Thursday at the Sheraton Hotel Addis Ababa.
"The ministry has granted Falcon Petroleum Limited, an exclusive right that enables the company to engage in exploration and development within the license area for the period specified in the agreement and will have the right to extend as per the agreement", said a statement from the ministry which highlighted the main elements of the agreement.
According to the agreement, covering an of 25,875 square km, the initial term of exploration period will be four years with possible extension twice each for two years. The development and production period shall be 25 years with possible extension of 10 years, the Minister said.
Accordingly the company shall give preference to the employment of Ethiopian qualified nationals.
Alemayehu also said, "Today's event marks an extension of the exploration in areas other than the historical Ogaden basin which in itself contributes to our mind set as such petroleum opportunities could exist in volcanic terrains and we will continue working in a similar manner to attract oil companies to explore other parts of the country." To date, exploration agreement have been acquired which collectively covers more than 70% of the surface coverage of the country, and this is a significant success following which Ethiopia is foreseen to be one of petroleum producing country in East Africa, he added.
Falcon petroleum Ltd is a company registered in Cyprus and is involved in petroleum exploration in different parts of the world. In accordance with the petroleum agreement signed, Falcon Petroleum Ltd shall have exclusive right in the area to undertake petroleum exploration and development.
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This agreement encourages other companies to engage in petroleum exploration on the surrounding areas of the basin, the statement added.
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