Tuesday, July 31, 2012

Ethiopia Revokes PetroTrans Accord Over Lack of Investment

By William Davison

July 30 (Bloomberg)
 -- Ethiopia’s government revoked PetroTrans Co. of China’s production-sharing agreement because of a lack of investment, Mines Minister Sinknesh Ejigu said. “They did not fulfill their obligations,” she said in a phone interview today from the capital, Addis Ababa. “We want to realize the project on the ground, not on paper.”
The agreement for work in the eastern Somali region of Ethiopia was signed in July 2011, Sinknesh said. The government was expecting investment of as much as $5 billion by PetroTrans over the course of the project, she said.
No oil has been found in Ethiopia, which relies on exports of coffee and other agricultural commodities to generate most of its foreign-exchange earnings. The Somalia-bordering region, where PetroTrans operated the Calub and Hilala fields, has 4 trillion cubic feet (113 billion cubic meters) of natural gas, according to SouthWest Energy, an Addis Ababa-based company.
SouthWest, which is registered in Hong Kong, said it may strike oil next year in the three blocks it’s exploring.
PetroTrans, which took over blocks sold by Petronas Nasional Bhd of Malaysia in October 2010, said in an e-mail it will comment later today.
The government gave PetroTrans adequate notice of its decision, Sinknesh

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