Ethiopia 11-16-2011 A Hong Kong based Ethiopian company, South West Energy, is to sign a petroleum production sharing agreement with the Ethiopian Ministry of Mines. The Ministry is prepared to sign the agreement upon approval from the Cabinet said Sinknesh Ejigu Minister of Mines.
South West Energy presented an inquiry to the MoM to undertake exploratory activities in the Gambella Basin in August 2010. The Petroleum Licensing and Administration Department of the MoM reviewed the proposal from SWE and negotiated terms in the absence of other interested parties.
The committee decided to contract with South West after negotiating on production share, royalty payment, signing and production bonuses, training fees, and evaluating the company’s financial status.
The Gambella Basin is the only remaining concession leftover from the Malaysian Petronas Carigali concession. The Malaysian based company halted exploratory works in Ethiopia 2009 after investing 350 million US dollars.
All the concessions, with the exception of the Gambella Basin, were acquired at auction by Petro Trans, a Chinese company based in Hong Kong.
South West unsuccessfully attempted to deal a transfer of concession rights from Petronas and took part in the auction that awarded the concession to Petro Trans.
There are a number of international companies, which have entered into agreement of Petroleum Production Sharing Agreement (PPSA) lasting up to 25 years, undertaking petroleum exploration.
Source: Addis Fortune
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