Sweden's Lundin Petroleum AB says its exploration in S. Ethiopia would lead to discoveries of oil and natural gas

Ethiopia’s Ogaden region, which is inhabited largely by ethnic Somalis, has been plagued by civil war.

The Ogaden National Liberation Front (ONLF), which has long sought independence for the region, attacked an oil installation operated by a Chinese company in April 2007, killing dozens of people and prompting a harsh crackdown from the Ethiopian government.

The ONLF following the signing of the PSCs with Ethiopia advised the Swedish company to stop its exploratory activities in Ogaden.

Source: Sudan Tribune 10 October 2008 - Swedish oil operator says confident in Ethiopia’s exploration - copy:

October 9, 2008 (ADDIS ABABA) — Swedish oil explorer, Lundin Petroleum AB, showed on Thursday confidence on its exploration in southern Ethiopia saying it would lead to discoveries of oil as well as natural gas.

The Ethiopian government and the Swedish oil operator signed a Production Sharing Contract (PSC) on November 7 2006. Lundin’s first PSC cover Blocks 2, 6, 7 and 8 located in the onshore Ogaden Basin.

"We feel that this basin has not only proven gas potential but also light oil," James Phillips, Lundin Petroleum’s vice president of exploration for Africa and the Middle East, said at the Africa Upstream 2008 oil conference in Cape Town.

The Swedish oil operator agreed this week to transfer 15 of its interest in Ogaden to New Age, a South African energy firm. The farmout covers Lundin blocks in southern and northern Ethiopia.

Lundin Petroleum said it holds a 100 pct in the contract area for the duration of the exploration period but the Ethiopian Government has an option to participate with up to a 10 pct interest following any commercial discovery.

Lundin is among a handful of companies that are exploring for gas and oil in Ethiopia, the Swedish firm has also another contract with Addis Ababa with a 50 percent interest, covering the Adigala Area, northern Ethiopia.

Ethiopia’s Ogaden region, which is inhabited largely by ethnic Somalis, has been plagued by civil war.

The Ogaden National Liberation Front, which has long sought independence for the region, attacked an oil installation operated by a Chinese company in April 2007, killing dozens of people and prompting a harsh crackdown from the Ethiopian government.

The ONLF following the signing of the PSCs with Ethiopia advised the Swedish company to stop its exploratory activities in Ogaden.

Lundin also has operations in several other African nations, including Sudan, Kenya, and Tunisia, where it holds a stake in the Oudna energy development. The company said also mulling to expand in Congo Brazzaville and other African markets. (ST)