Ethiopia to Extend Tullow Exploration Permit as Data Studied

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By William Davison Oct 15, 2014
bloomberg
tulowEthiopia will grant Tullow Oil Plc (TLW) an extension to its exploration license after the company reported “encouraging” results in its search so far, Mines Minister Tolesa Shagi said.
“We will definitely grant them because they’ve done so much and we appreciate whatever they’ve tried to do,” Tolesa said in a phone interview yesterday from the capital, Addis Ababa. “We try to assist them as much as possible.”
Tullow, based in London, requested more time to analyze data from drilling and seismic surveys in southern Ethiopia, the company said yesterday in an e-mailed response to questions. Two out of four wells drilled by Tullow and partners Africa Oil Corp. (AOI) and Marathon Oil Corp. (MRO)in the past two years show they may contain petroleum deposits, it said.
“The hydrocarbon shows in the South Omo basin wells are indicative of a working petroleum system and therefore the acreage in southern Ethiopia remains prospective,” it said. “We are currently examining the substantial volume of drilling and seismic data collected to decide our future exploration plans.”
The size of the concession in southern Ethiopia is 5.4 million acres (2.2 million hectares) , according to Marathon Oil’s website. Tullow is focusing on East Africa’s Tertiary Rift that extends into Ethiopia. It struck oil on the same formation across the border in neighboring Kenya in 2012.

Gas Deposits

While no oil or gas is produced by Ethiopia, there are an estimated 4 trillion cubic feet of natural-gas deposits in its eastern Somali region, where a unit of China Poly Group Corp. is working.
Tullow is moving almost all of its staff out of Ethiopia after no oil was found in the country, the Addis Ababa-based Reporter newspaper said Oct. 11, citing Operations Manager Nick Woodall-Mason. No more work would be done during the remainder of the exploration license, it said. The companies hope to get a two-year extension to the license that expires in January.
While staff in Ethiopia will be reduced during a drilling break, “suggestions that Tullow will leave only a skeleton staff in Ethiopia for the next two years are incorrect,” the company said yesterday.
To contact the reporter on this story: William Davison in Addis Ababa atwdavison3@bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.netPaul Richardson, Karl Maier

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