July 23, 2011

Ethiopia Awards Ogaden Gas Fields to Chinese Company

Filed under: Ethiopia — ethiopiantimes @ 10:02 pm
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July 23, 2011 – The Ministry of Mines yesterday awarded the Calub and Hilala natural gas fields and eight exploration blocks found in the Ogaden basin to a Chinese oil and gas company, PetroTrans Company, according to the Ethiopian Reporter.

Sikinesh Ejigu, minister of Mines and chairman of PetroTrans, Mr. John Chin, signed a petroleum development agreement and four exploration and production sharing agreements at the Sheraton Addis. The petroleum development agreement will enable PetroTrans to develop the natural gas reserves in the Calub and Hilala localities found in the Somali Regional State. The gas fields, which have an estimated reserve of four TCF (trillion cubic feet), are found 1200 km south east of Addis Ababa.

The gas fields as well as all the exploration blocks were previously held by the Malaysian oil and gas giant Petronas. The ministry floated all Petronas’s concessions in Ethiopia except the Gambella block, found in west Ethiopia near the Sudanese border. An independent petroleum expert told The Reporter that all the blocks held by Petronas are promising for oil and gas discovery.

PetroTrans Company Ltd. Was established in 1997. Founded by Mr. John Chin, it has been mainly involved in the Upstream Oil & Gas Industry, as well as Oil & Gas financing and leasing.

Following the withdrawal of Petronas from Ethiopia, the Ministry of Mines last March invited seven companies to bid for Calub and Hilala gas fields and the eight exploration blocks deemed promising for oil and gas discovery. The total area of the exploration blocks is 93,000 while the Calub and Hilala gasfileds cover 283

The seven local and international oil companies shortlisted by the ministry bought the bid document and four of them submitted their technical and financial proposals to the ministry. The companies that returned the bid documents were PetroTrans, South West Energy Ltd, an Ethiopian oil and gas company, Cobramar of Seychelles and National Oil Company (NOC), a local petroleum which has a chain of fuel stations across the nation. NOC was established by the Ethiopian-born Saudi billionaire, Sheik Mohammed Hussien Ali Alamoudi.

The ministry said the best proposals were submitted by PetroTrans. According to the ministry, the company will pay the Ethiopian government an upfront payment of USD 130 million and will invest up to four billion dollars on the gas development project. “When you compare the proposals of PetroTrans with the proposals offered by the other companies it is incomparable. PetroTrans’s proposal by far exceeds that of the others,” Sinkenesh said at the signing ceremony.

John Chin said that his company is committed to develop the proven gas reserves and discover new oil and gas reserves. “We have discovered oil in Sudan, Chad and Nigeria. We want to do the same here,” he told The Reporter. He said ten years ago his company built a 600-km oil pipeline from Port Sudan to Khartoum in less than ten months. “Two years ago we built 8300 kms of pipeline in China in less than two years. Once we get into a commitment we are very serious and we do it quickly,” He said. The company hopes to finalise the project within 30 months. “A study has to be undertaken to determine where to build the gas treatment plant. We also have to conduct a survey to identify the route of the pipeline,” Chin said.

PetroTrans has been working with two renowned Chinese oil companies – SinoPec International and CNPC. The gas pipeline construction work will be given to either of the two, a company executive told The Reporter.

PetroTrans will pay to the government 35 percent income tax and a five percent royalty fee. The Ethiopian government will have a five percent stake in the project.

Source: Reporter


  1. On behalf of GETCO Somaliland is a private company envisaged the development of Natural Gas, Hydrocarbon and Industrial Minerals Development in Somaliland, we advocate and work hardly to alleviate poverty in Somaliland, Somalia and Somali Region of Zone five. having head the news about the emergence of Oil exportation via Somaliland is another opportunity to the region. Somaliland is the leading ally of Ethiopia and Berbera corridor is very important to the region to jointly develop gas refinery in Berbera which links both Ethiopia and Somaliland. The refinery will give an opportunity to both Somalilanders and citizen from Somali region of Zone five to have an equal opportunity of Employment.
    I would like to comment on that Cobole and Hail gas has to be exported via Berbera port and the pipeline will go through, Kaam Haashim, Barwaaqo and Baligubadle which is the historic base of former Somali National Movement Base, These communities – Arab Shiekh Isxaaq has strong ties with Somali Zone five and reside both Sides (Ethiopia and Somaliland). Therefore, it is greater success for President Meles Zenewe and and would like to congratulate him for allevaiting poverty from Somalis as well sisters and brothers of Ethiopian Nations. The other opportunities is that Southern Sudan is supposed to be the first country to recognize Somaliland and its Oil piplines will go through Ethiopia via Berbera port, so that, Berbera is now preparing to be constructed to oil refineries – (one for Ethiopia and one for Southern Sudan). Thirdly Southern Sudan is planning to invest a rail way connecting to the region.

    Comment by Ahmed Osman — August 15, 2011 @ 7:34 am | Reply

  2. if the pipeline from haud and the pipeline from south sudan goes through Berbera in somaliland ,then , the countries will benefit to share the wealth. But what about if kenya offers more insentives to Ethiopian government say lets not strength somalis.what about if kenya offers ogadens to kismayo area through united states and the governments in the region and return kenya will get the pipeline through lemou port and baffer zone from Al-shabab .what you about that idea?.

    Comment by Adam — December 4, 2011 @ 5:18 pm | Reply

  3. This is Adam again .I just want to say, we all need to cooperate and share our resources ,but , I believe ,the somali people are too weak and too fractured to enter an agreement with two functioning neighboring governments who have the backing of western powers,and who donot have the best interest of somali people in heart.I afraid, they may be taking advantage of our weakness. I may add , also , Iam proud the accomplishments of somaliland has achieved so far .I hope, the rest of somalis will study seriously,what makes them stable,then, go from there.if kenya and Ethiopia are democratic and give the somalis live under governments more freedom, then, we can enter agreement with them.

    Comment by Adam — December 4, 2011 @ 5:51 pm | Reply

  4. Regional Political Prediction:

    ~As regional political analysis and predictions, it is very important to understand by the Somalis their political, economical and social interests by having a good relationships to the Neighboring countries. I would like to remind you that, Kenya is supposed to establish self-autonomous region in Bay, Bakool, Gedo and Kismayo regions under the leadeship of ASANIA administration. This is more dangerous to southern Somalis and might increase fragmentation, but it is very important to support the TFI to establish a functioning government.

    We know that Somalis its selves are the problem creators, for instance, the dream of building gas and oil refinery drilled from Ethiopian Zone five (not ogaden region) will have many obsticles, because, the Ogaden region has various rebel groups against Jigjiga administration and at the same time, JIGJIGA administration is not committed to to accomplish such long terms economic vision in which the 80 million Ethiopia populations are willing to shift from agricultural based economy to natural resource based economy.

    The Somali populations in Zone five are not only OGADEN but the predominant populations with large number of intellectual, entrepreneurs and have close relationships in Eithiopian adminstration are characterized the DIR & HAWIYE community. The DIR tribal alliance are mainly composed on the following bigger clans who occupy in both Somaliland & Djibouti countries, (ISAK, ESSE, GURGURE, GADABURSI, GARE, AKISHO, JARSO & GURGURE). The DIR and HAWIYE are mainly settled and controlled in Diredawa and JIGJIGA towns.

    I would like to emphasise that the bilateral agreements cannot be fulfilled until Ethiopia is closely investigating the OGADEN region who their major vision and dream is centred on to secade from the rest parts of Ethiopia. A good example, can be taken the inter-clan conflict between ISAK clan and OGADEN militia men who are claiming that ISAK has occupied their original terrotorty and to foster their secessionist spirit from rest parts of Ethiopian Federal Government.

    OGADEN has genealogical or parental lineage with Put land state and do believe that JIG JIGA administration and Punt land are the masterminds behinds the ignition of all conflicts between ISAK clan under DIR tribe and OGADEN tribes men. The second point worth to be mentioned is that the JIGA-JIGA administration led by ILAY is currently planning to support a rebel group from Dhulbahante clan residing in Buuhoodle district which is under the jurisdiction and administration of Somali land Republic.

    Therefore, it is more advisable, if president Melez-SANAWI and the rest of Eithiopian community, especially intellectuals to be more vigilant the tactics of the current Somali region president who is playing double card and he immediatly started a war against Somali land community inside Ethiopia and at the same time, fueling to establish rebel group in Buuhoodle district who are striving to undermine the development of Somali land.

    One must have understand that neither Ethiopia nor Kenya are the enemies of Somali populations and the Islam but their have the right to defend their internal security and confront all forms potential threat that might possibly undermine their socio-economic & political stability of their governments.

    Somaliland administration is committed to double its efforts of improving the bileral relationships between Somali land and IGAD member states by accelerating the process of de-jure state to have mutual long-term economical relationships. Ethiopia, Kenya and South-Sudan are the key stakeholders in which Somali land Government is going to intensify their ties

    Comment by Ahmed Osman — February 1, 2012 @ 7:45 pm | Reply

  5. Wtf. Iidoor is always iidoor. Counting on ogaden natural resources. U need to get alone with them if u wanna have a chance of working at their future oilfields. Be a hatter and you will starve.

    Comment by OG(original gangster) — July 16, 2012 @ 12:20 pm | Reply

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