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Horn Of Africa Is On Tullow Radar
UK explorer ties up with SWE as it targets finds in ‘last frontier’
Tullow Oil is teaming up with Hong Kong-registered SouthWest Energy (SWE) to explore the Horn of Africa in a move to secure a frontline position in what the industry has recognized as one of the last remaining untapped frontiers.
London, UK, December 12, 2009 – This is the UK independent’s next big thing, said a senior executive close to the deal.
Despite having its hands full developing mammoth finds in the Ghanaian deep and the Ugandan Rift Valley, Tullow last week decided to reach out to Ethiopian explorer SWE with a view to “building a strategic partnership in the Horn of Africa”.
The duo will initially carry out a joint regional study ahead of a “joint regional exploration campaign”, which it is understood will consider a range of opportunities beyond Ethiopia — both onshore and offshore — and potentially including the Somali territories.
SWE already has assets in Ethiopia’s Somali-speaking Region V in the Ogaden basin and Tullow has agreed to farm in to all these blocks ahead of an upcoming seismic campaign although the exact equity element remains undecided.
SWE has completed geochemical analyses of Ogaden licences 9, 9a and 13 and is evaluating tenders for a 15,000-kilometre 2D seismic job for Block 9 to be awarded in January and likely to take six months.
Geochemical analysis yielded “very positive indications of oil” and it is understood the need for 3D seismic will be considered based on first phase results.
SWE also expects to sign a formal production sharing agreement “very soon” for the 65,000-square kilometer Jimma basin acreage on Ethiopia’s western plateau.
Extensive oil shales have just been confirmed on Jimma following completion of a joint study carried out with Addis Ababa’s Ministry of Mines and Energy.
It is now likely the duo will jointly bid on fresh acreage offered under Ethiopia’s new licensing exercise launched last month in which 14 licenses will be up for grabs over the next three years.
Bilateral discussions are preferred over a formal round.
Eleven companies currently hold Ogaden acreage onshore Ethiopia including Pexco Exploration and Titan Resources, but the main players remain Petronas and Africa Oil Corporation, which recently acquired Lundin Petroleum’s assets and those of Dubai-based Black Marlin.
The rebel Ogaden National Liberation Front (ONLF) has regularly threatened to attack foreign and local companies engaged in oil and gas exploration.
However, operations are now heavily guarded and no serious incidents have been recorded since an attack on Sinopec drilling subsidiary Zhongyuan Petroleum Exploration Bureau claimed 74 lives in April 2007 when ONLF fighters overran the Abole exploration site in Degehabur.
Read the full story and more in today's edition of Upstream